Big snow, Marriott help VR beat the Street |

Big snow, Marriott help VR beat the Street

Ten feet of early-season snow, $10 million in slashed salaries and expenses and robust real estate and lodging revenues should combine for an unexpectedly merry Christmas for Vail Resorts’ stockholders.The company Nov. 11 announced lower-than-expected losses in the normally weak first quarter of its fiscal year $24.8 million compared to $26.1 million last year, or 71 cents a share versus 75 cents a share last year.Analysts and investors seemed to be impressed Dec. 12, driving the stock up 19 cents a share to close at $16.96 up from an October all-time low of $12.23 a share.The quarter ending Oct. 31 is usually tepid for the company, reflecting off-season lulls in resort visitors. The ski company in October was calling for a loss of between 85 and 95 cents a share.But the company’s lodging revenues for the first quarter jumped $11.5 million, or 40 percent, to $40.1 million, and real estate revenues rose from $15 million to $39.4 million.VR CEO Adam Aron says the renovated Marriott in Lionshead sold $7.5 million in condo inventory in a matter of days, and that three penthouse condos atop the re-skinned luxury hotel closed for in excess of $900 a square foot unheard of prices in the generally lower-rent Lionshead area.”We’re talking about nosebleed territory here and there doesn’t seem to be any end to it,” Aron says. “The affluent market doesn’t seem to be affected by the recent economic downturn.”In October, the company cut 50 jobs, including company president Andy Daly, and another 50 unfilled positions in a move to save about $10 million a year.Coupled with abundant early snow, particularly before Thanksgiving, the cuts and increased revenue Aron says all four of VR’s Colorado resorts have experienced a 30 percent increase in snowriders so far this season have put the company in an unexpectedly good position.But Aron warns that the United Airlines bankruptcy and the threat of war in Iraq could put the brakes on in a hurry.&quotIndeed, while early season signs are highly encouraging, we have only completed less than 10 percent of the 2002-2003 ski season, and we still have to contend with the impacts, if any, of difficulties in the U.S. airline industry, a weak national economy, and the possibility of war,” Aron says. “It is much too early to declare victory as we look at Vail Resorts’ fiscal 2003, but we are certainly off to a good start.&quotBookings for VR’s lodging properties for the Christmas season are up 15 percent over last season, Aron says, adding that for the fourth year in a row the company had record season pass sales a likely contributor to record opening days at both Vail and Beaver Creek.Even United’s downfall could have a silver lining for the ski and real estate company, Aron says. “If they lower their costs and fares into Denver, it will actually be better for Vail Resorts in the long term.”

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