Boundless optimism: Vail boss to buy new condo
VAIL – How bright is Vail Resorts’ future? The company’s chairman is going to spend his own money, and lots of it, in the new, improved Lionshead.Vail Resorts’ boss Adam Aron Friday hosted a conference call to discuss the company’s earnings in the first quarter of the firm’s 2005 fiscal year, which ended Oct. 31. During that call, Aron told reporters he will essentially be first in line to buy a new, multi-million dollar condominium at the new Arrabelle at Vail Square complex in Lionshead.”I’m buying this at full price, with no discount,” Aron said. When the condos are ready for occupancy, probably in mid-2007, Aron will sell his home in Beaver Creek and move to Vail.Aron’s new place will be one of 70 luxury condominiums built at a new Rock Resorts hotel and condo complex at Lionshead, now called “Arrabelle at Vail Square.”Aron also used his new home to deflect a question about continued rumors Vail Resorts might be for sale.”We do not comment about rumors,” Aron said. “But I will tell you that our stock value has moved from about $11 per share at the beginning of the Iraq war to about $23 now. And I just said I’m buying a multi-million dollar condo that won’t be ready for two-and-a-half years.”
That said, Vail Resorts did lose money in the first quarter of 2005. But, Aron said, that was expected.”There’s not a lot of skiing going on in August and September,” he said. “We exceeded our internal expectations.” But the company did take a hit, especially as it took a loss of $800,000 on financing the Ritz-Carlton Bachelor Gulch.That loss alone had about a penny-per-share impact on the company’s stock. Overall, the company’s stock lost about 89 cents per share of value on the company’s $31.5 million quarterly loss.But a big part of that loss was recouped when Vail Resorts sold its 49 percent interest in the Ritz-Carlton earlier this week. The $13 million sale price will put about $9 million on the plus column of the company’s second quarter ledger. With what Aron called an “acceptable” first quarter, Aron said the resort company is primed for a strong showing in December through March of the fiscal year.Airline bookings are up 6 percent, and bed reservations are up about the same, Aron said. Season pass sales at all the company’s resorts have brought in about $50 million so far.
And, unlike a lot of companies on the New York Stock Exchange, Vail Resorts’ success still depends a lot on the weather. Aron made a point of telling reporters, many of whom represented East Coast financial journals, about the several feet of snow that’s fallen on the company’s ski slopes.He also had to answer a quick geography question.Asked about the effects on the company of the Thanksgiving Day avalanche in Glenwood Canyon, Aron had to explain that the highway closure was to the west of airports in both Denver and Eagle County.”It might as well have been in Timbuktu,” Aron said.Vail’s diversification came in for some questions as well. After acquiring Rock Resorts and several other lodging properties over the past few years, Vail Resorts has sold its interest in the Ritz-Carlton, and, Aron said, the company may sell as many as three more hotels over the next 16 months or so.”We’re moving to more managed, and fewer owned properties,” Aron said. “Prices of hotels seem to be sizzling right now.”
Another revenue source seems to be the willingness of people to pay for what Vail Resorts has to offer. Aron said top-price lift tickets have jumped from $2 to $4 at all the company’s ski areas.”We haven’t’ been shy about offering premium prices for a premium product,” Aron said. “We’re confident consumers will continue to see the value in what we offer.”Staff Writer Scott N. Miller can be reached at 949-0555, ext. 613, or email@example.com.Vail Daily, Vail Colorado