Vail Resorts freezes hiring full-timers
There have been broad hints that the company’s performance over the last year has been beneath expectations, and concerns that the coming season could be challenging.
Last week the company announced managers would not receive bonuses for the summer and winter season. It did, however, offer employees a 2 percent merit raise for the coming season. The raise is 1 percent less than last year’s raise, which was frozen in October and reinstated in February when business improved. The company also is reworking its budgets to reduce an additional 2 to 4 percent of its expenses, CEO Adam Aron said.
“I think we have a winter ahead of us that could be a challenging one,” Aron said Friday. “We have a recession, an airline crisis, a possible war. That doesn’t sound real good for the us in the ski industry. We are trying to prudently manage our business in the face of a lot of uncertainty.”
A memorandum to company managers from the company’s president, Andy Daly, stated, “In support of Adam’s letter last week relative to our need to aggressively manage our costs, effective Sept. 23, we are implementing a hiring freeze for all full-time, year-round positions. This hiring freeze includes both replacement and/or new positions.”
Aron’s company-wide memorandum expressed concern the prospect of war, more terrorism and a lingering recession will continue to impact the travel and tourism business.
“The economy is very weak,” he wrote. “Many in the U.S. travel industry are actually discussing wage reductions with their employers or worse, are facing the threat of big bankruptcies that threaten tens of thousand of travel industry managers and workers. Fortunately Vail Resorts is still a strong company.”
Avon-based Vail Resorts has as many as 14,000 seasonal employees at Vail, Beaver Creek, Keystone and Breckenridge and nearly 1,500 more at its recently acquired Heavenly Valley resort at Lake Tahoe. It has 3,100 full-time, year-round employees.
Promotions, the memo states, must be approved of in advance.
In an earlier interview, Aron said in the wake of the Sept.11, 2001, terrorist attacks in New York and Washington D.C, the company had two bad quarters and one very good one. He indicated the final quarter may not offset the performance of the final two quarters, however.
“We’ve still got to hire 9,000 employees between now and Christmas. We’re still going to run our business,” Aron said.
Reservations activity in the next eight weeks will determine when the hiring freeze thaws, Aron said.
The company is expected to release its fourth quarter report next month.
Vail Resorts stock is publicly traded (MTN-NYSE). It traded at $14.35 at market close Friday.
Cliff Thompson can be reached at 949-0555 ext 450 or firstname.lastname@example.org.