Economy matters more than snow
May 21, 2011
VAIL – The economy is more important than snow levels in driving winter business, Vail Resorts said in a report to its investors.
“Visitation is influenced by the economy, not snowfall,” the ski company reported just before the end of the 2010-11 season, its snowiest season in history. “Investments in snowmaking and higher season-pass sales have helped mitigate the impact.”
The company’s report compares snowfall with skier numbers for its four Colorado resorts – Vail, Beaver Creek, Breckenridge and Keystone – from 1999-2000 through 2009-10, the depths of the recession.
Skier numbers depend far less on snow than they used to, Vail Resorts Chief Executive Officer Rob Katz and Chief Financial Officer Jeff Jones said during the presentation to investors last month.
It’s still a ski company
The report also quantifies the obvious; Vail Resorts really is a ski company.
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The company reported $868.6 million in total revenue for fiscal year 2010. The company splits that between resort revenue and real estate.
Of that, $807.6 million was resort revenue (lift tickets, lodging, retail/rental, dining, ski school and “other”); $61 million came from real estate in 2010.
Lift tickets accounted for 35 percent of the ski company’s revenue in 2010. More than one-third of that shows up before most of the ski season has occurred, the report says.
“The business model mitigates impact of weather,” Katz said during the investor meeting. “Season-pass business generates consistent and predictable revenue.”
The company said its resorts attract upper-end clientele and that they enjoy high guest retention, which enables what it calls “premium pricing.”
“(A) very limited set of high-end destination ski resorts exist in North America,” Katz said. “Our resorts are irreplaceable. We own six of the best mountain resorts in North America.”
Average household income exceeds $200,000 across Vail Resorts properties and exceeds $300,000 at Beaver Creek, the report says.
Across the rest of the ski industry, only 19 percent of skiers report household income at or above $200,000.
“Vail Resorts performed well in the recession,” Jones told investors.
It just keeps getting better
When this season ended on April 24, Vail Resorts released a rosy report:
• Lift ticket sales were up 8 percent over 2010-11.
• Skier numbers were up 3.9 percent.
• Revenues were up: Ski school was up 8.4 percent, dining was up 9 percent, and rental and retail were up 8.3 percent compared with 2010-11.
“It was especially good to see the rate of growth in lift-ticket and ancillary revenue continue to outpace skier visits due to price increases across our lift-ticket and season-pass products, together with increased spending per visit,” Katz said.
A late Easter (April 24) had a “negative impact,” Katz said.
Easter next year is April 8, “a much earlier and favorable date,” Katz said.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or firstname.lastname@example.org.