Vail: Good signs for next ski season
VAIL, Colorado – The struggling economy meant fewer out-of-state visitors and lower earnings this ski season, Vail Resorts said Thursday.
Profits dipped to $61.6 million, or $1.68 per share, for February through April, down 29.4 percent from the previous year. CEO Rob Katz made the announcements in a conference call with Wall Street analysts Thursday. The company managed to beat expectations of analysts, who predicted a profit of $1.56 per share.
A bright spot accompanied the news of sliding profits. Season pass sales for next winter are up 37 percent, Katz said.
“We are extremely pleased with the significant increase in advance spring pass sales for the upcoming 2009-2010 ski season compared to the previous year, particularly given the more difficult economic environment this year versus last spring,” Katz said.
Skier numbers were actually up for both Vail and Beaver Creek this past winter, while visits to the company’s other ski resorts – Breckenridge, Keystone and Heavenly – dropped significantly.
This year, the company saw fewer out-of-state skiers, who are valued as big spenders in areas such as ski school, dining, ski rentals and retail. For the quarter, ski school revenue was down 21.3 percent, dining was down 20.1 percent and rental-retail was down 19 percent.
Cost-saving measures over the last year have included cuts in employee wages and benefits as well as layoffs. As the economy picks up, the company will start looking at wage increases for employees, Katz said.
He thanked the company’s employees for their work during “one of the most difficult business climates in the last century.”
“Economic corrections can definitely change the landscape and produce winners, survivors and stragglers,” Katz said. “While our current year financial performance is not something we can trumpet, we’re confident that we have positioned the company very well for the future.”
Jerry Jones, a former executive with Vail Resorts who now runs a real estate company in Avon, said, despite the decreasing profits, Vail Resorts probably did better than its competitors. The drop in out-of-state visitors was almost completely due to the economy, Jones said.
“It had nothing to do with snow, had nothing to do with perceived value of Vail,” Jones said.
Vail Resorts responded well to the economic downturn with the discounted, unrestricted, six-resort Epic Season Pass – even if it was introduced before the severity of the downturn became apparent, Jones said. The company sold 59,100 Epic Passes last year.
“I think the Epic Pass was a real gutsy move on their part, to put that pass out there, and I don’t think anyone perceived the downside of the business side this time last year,” Jones said.
Jones predicted that Vail Resorts – and the rest of the ski industry – is in for a tough year again next season.
“Unfortunately, we’re looking at a similar season coming up, if not worse,” Jones said. “But if they can keep skier days up with the Epic Pass, they’ve come a long way toward a successful season.”
In its hotel division, Vail Resorts saw revenue increase by 3 percent, largely due to the acquisition of shuttle company Colorado Mountain Express. Without that company, the hotel division would have lost 15.9 percent. Daily rates dropped and the “booking window” – the period of time between the booking and the stay – shortened.
On the real estate side, revenue dropped to $9.4 million, down from $54.5 million last year. Just one Arrabelle at Vail Square unit closed this year, compared to 17 last year.
Broomfield-based Vail Resorts, trading as MTN on the New York Stock Exchange, closed at $28.62 per share, down 27 cents.
Staff Writer Edward Stoner can be reached at 970-748-2929 or firstname.lastname@example.org.
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More base areas open means more space for guests to disperse upon, even if those base area openings don’t translate into more actual terrain openings.