Vail Resorts analysts expect reduced visitation, higher spending at Colorado ski resorts during holiday week | VailDaily.com
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Vail Resorts analysts expect reduced visitation, higher spending at Colorado ski resorts during holiday week

Timing of school breaks will likely play a role in reducing late December visitation while bolstering early January

Pete's Express as seen from the lift exiting the station Monday on its first day of operation for the 2022-23 season. Improved staffing and plentiful natural snowfall contributed to a much earlier opening for the lift this season as compared to last season.
John LaConte/Vail Daily

Vail Mountain visitation during the upcoming holiday week could be quite the opposite of last season, if predictions hold true.

Part of the reason is something local parents won’t be surprised to hear — the fact that kids are still in school on the Thursday before the Sunday on which Christmas falls.

It’s a much different story than last season, when Christmas fell on a Saturday and many public school students received vacation time for the entire week ahead of the holiday.



In the investment world, that’s called a positive holiday shift, or a visitation bump based on where the holiday falls on the calendar. The inverse effect is a negative holiday shift, which is what we’re seeing this season, Vail Resorts analyst Patrick Scholes pointed out in a report released Thursday.

“In addition to a holiday shift, we see new competitive supply from short-term rentals, the re-opening of international markets such as Europe, the Caribbean, and Canada combined with favorable FX for American travelers, and the return of cruising as a value-priced vacation alternative are putting some pressure on domestic resort hotel occupancy,” wrote Scholes and Gregory J. Miller with Truist Securities. “To be clear, this is not just for U.S. ski resorts, but also for popular U.S. resorts such as beach resorts that saw outsized performance two years into Covid.”

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Recently released data from DestiMetrics, a company that collects future booking and pricing data for hotels at Western U.S. ski resorts, shows that shifts in school breaks this year vs. last year mean that there are roughly 38% fewer households with K-12 children available to travel prior to the holiday week.

“That is reflected in the deep YOY decline in occupancy between December 15 and 24,” DestiMetrics writes. “And while that’s problematic — and difficult to overcome — more concerning is the peak week of December 25 to 31, which was extremely busy last year but had trouble filling in this year — with extreme room rates playing a role.”

The higher room rates at hotels were noted as a positive in Thursday’s report from Truist Securities, which pointed out that hotels attracting higher spending guests “bodes well for on-mountain spend per visitor and lodging segment profitability.”



The reduced availability for travel in late December has also created a corresponding uptick in travel for early January, something ski resorts are likely to see. That, along with an improved guest experience over last season, could get 2023 off to a positive start for ski resorts.

2023 optimism

An interesting side note from Truist Securities’ Thursday report was the fact that the firm increased its price target for Vail Mountain. Investment firms set price-target numbers based on how much those firms expect companies’ stocks will be trading at in the future. Truist, in 2022, was one of the more negative companies on Vail Resorts’ stock.

In January of 2022, some firms had price targets above $350 per share for Vail Resorts, which had hit $370 in November of 2021. Truist Securities predicted $322 in early January, but reduced to $302 in February and was down to $278 by March. Truists’ December increase on MTN from $270 to $292 shows an optimistic outlook on the stock, which was trading at $242 when the price target was issued on Thursday. Deutsche Bank, as of Thursday, had a price target of $289, Jefferies investment bank had a price target of $232, and Stifel Nicolaus had a price target of $261 for Vail Resorts.

From Truists’ Thursday report:

“Investors who follow our research may recall that we were highly critical of MTN last season as in our view and that of many others, MTN was caught flat-footed by labor shortages in light of Epic pass sales up 76% y/y. As we noted in our research earlier this year, ‘Realistically, despite MTN’s assurances, it will not be until early-mid December, once the ski season gets underway, that we will get a good indication if MTN’s resorts will be properly staffed. Until then it is mostly wait & see if MTN can execute on its commitment to be much better prepared for the ski season.'”

Truist reported that as of mid-December, at Vail Resorts’ Colorado resorts, “staffing and service levels, both on-slope and F&B, have significantly improved from last season though are not fully back.”

A freshly groomed run on Vail Mountain’s Golden Peak competition arena on Monday.
John LaConte/Vail Daily

Lessons and grooming were listed among the elements not back to full-service levels, Truist noted.

“The good news for MTN is that lessons have seen sizable price increases and many popular dates, especially for children, sold out quickly in October,” Truist noted. “The bad news is that MTN likely left money on the table due to not having enough available instructors.”

In conducting on-mountain analysis of Vail Mountain, researchers likely found fewer lift line issues and more open restaurants this year. Locally, the fact that sales are down 12% on the full Epic Pass — that’s the one that gives guests unlimited access to Vail Mountain and Beaver Creek — is likely to play a role in reduced visitation to the Eagle County ski areas this season. Despite the slight bump in January, hotel reservations at western U.S. ski resorts are down for the rest of the season, as well, DestiMetrics reports.

But all of that actually creates a favorable environment for pass sales for next season, Truist noted.

“With full-season EPIC pass sales down 12% y/y, part of which we attribute to poor experiences by skiers/boarders at MTN’s resorts last season, some of the damage from last season’s issues has been done,” Thursday’s report pointed out. “Going forward, assuming the y/y improvements are maintained throughout the season, we could envision less attrition on the full Epic pass next ski season.”


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