Vail Resorts’ next steps after CEO’s admission company has ‘fallen short’
Town hall meetings, an investors conference and reopening of Broomfield office are all set to occur over next two months
Vail Resorts made a sweeping announcement this week, targeting everyone from the first-year workers at the company’s 40 ski areas, to the corporate officers in Broomfield, to the analysts who cover the company on Wall Street: We can do better.
It started with a letter to employees on Monday from CEO Kirsten Lynch, in which Lynch conceded the company has fallen short on creating an optimal employee experience for workers at the company.
“We cannot create an Experience of a Lifetime for our guests without first creating an Experience of a Lifetime for you — unfortunately, we have fallen short on that,” Lynch told employees in the letter.
Addressing staffing issues will require “a pivotal shift in our company’s direction” which starts with “an incremental annual $175 million investment in our employees,” Lynch said in the letter.
In addition to the widely-reported minimum wage increase to $20 per hour for workers on what the company calls its “frontline,” Vail Resorts’ many corporate office workers in Broomfield were also enticed to stick with the company with an option for “flexible remote work,” Lynch said.
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“When our Broomfield office reopens on May 16, corporate employees will not be required to work in the office a specific number of days, nor need to be based in Colorado,” Lynch said. “This allows corporate employees to live and work in any of the states in which Vail Resorts currently operates.”
Salaried employees’ merit raises will double, on average, Lynch added, from an average of 3 percent to an average of 6 percent.
Workers will have a chance to discuss company changes in town hall meetings in late March and early April, Lynch told employees.
Career advancement and housing
Lynch also detailed a plan to help employees seek career transitions from front-line workers to flexible remote workers through something Vail Resorts calls “Seasonal Frontline Leadership Development programming,” which it will launch during the winter of 2022-23.
“If you come for a season, we want you to have the opportunity to build a career,” Lynch said.
Using Vail Mountain Chief Operating Officer Beth Howard as an example, Lynch said being part of Vail Resorts allows employees to grow within their mountain resort, or move across mountain resorts and the company for new opportunities.
Howard arrived in Vail from Iowa in 1985, when she lived in Benchmark Condominiums in Avon for $400 per month, she told the Vail Daily after taking over the COO role in 2019. She moved from food and beverage at Vail and Beaver Creek to Northstar in California as GM before moving back to Beaver Creek, and then to Vail.
“In the past two years, over 600 employees have moved from one mountain resort to another for new career growth opportunities,” Lynch said.
But also in recent years, rent in mountain communities has become a lot more expensive than the $400 per month Howard paid in 1985, something Lynch addressed.
“Affordable housing in our mountain communities is essential for so many of our employees,” Lynch said. “We know this has become harder for you as those mountain communities have grown. We plan to aggressively pursue building new affordable housing on the land we own, and pursue company leases in existing affordable housing developments, so we can make housing more accessible and affordable for our employees.”
In another look forward, Lynch said Vail Resorts is “actively working on several key projects” and will share more information on housing soon.
Food and beverage ‘absolutely critical’
Following Lynch’s letter to employees, the Vail Resorts CEO addressed investors in the company’s second quarter earnings call on Monday afternoon, where again the admission was made that the company “had some issues early season with the guest experience driven primarily by being short staffed,” Lynch said.
At Stevens Pass resort, passholder discounts have already been issued for next season, but aside from that offering, Lynch declined to comment on Vail Resorts’ plans for 2022-23 season pass offerings.
Vail Mountain did not reach full lift service this season, with the Mongolia Platter still not running, and dining options like the the new “Trails End Treats” trailer in Golden Peak have not been able to keep up with hours advertised. Lessons have been difficult to book, even for guests willing to pay top dollar.
Getting to full staff makes sense not only from a guest experience standpoint, Vail Resorts CFO Michael Barkin told investors, but from an earnings standpoint, as well.
“We actually believe that we’ll be able to generate more incremental revenue than we were able to in fiscal 2022, in our ancillary businesses, when those businesses are fully staffed again,” Barkin said.
Lynch said next year, food and beverage will be a focus.
“Getting fully staffed in our food and beverage outlets is absolutely critical to capturing the revenue and growth for the company,” Lynch said.
Investors will hear more about the company next week as Vail Resorts will host its investor conference on March 22.
“We expect the focus will be on 1) 2022/23 Epic Pass pricing, 2) increases in hourly wage rates, and 3) MTN’s response to negative press regarding overcrowding and the guest experience,” wrote Jeff Stantial with Stifel Investment Services.