Vail Resorts posts first-quarter losses
BROOMFIELD, Colorado – Vail Resorts’ fiscal year usually starts out poorly. That leaves plenty of room for growth.
Company president Rob Katz Wednesday used a call with industry analysts and reporters that the company lost $55.7 million in the quarter ended Oct. 31 of this year. That period covers August, September and October, typically slower months in the resort business. This year’s losses were about $12 million more than last year, which Katz attributed to Vail Resorts’ 2010 acquisition of Northstar at Tahoe and losses associated with operation of that property.
First quarter results in real estate sales were also lower this quarter than the first quarter in fiscal 2011, Katz said. That’s primarily because of a one-time sale of fractional units at the Ritz Carlton Residences in Vail last year. Aside from that, Katz said real estate sales were strong for the company. Sales in the fiscal year through Dec. 4 were more than $16 million, and the company’s 2012 outlook predicted real estate revenue of $35 to $45 million for the fiscal year.
Katz said he was also pleased about the company’s ski pass sales, which are up 5 percent in number of passes and 13 percent in revenue over the same period last year.
Passes this season come with some restrictions at some resorts, particularly over holiday weekends.
Participate in The Longevity Project
Responding to a question, Katz said those restrictions get some guests to buy “higher margin products” such as single-day tickets. Those restrictions may expand to holidays including the Martin Luther King Jr. birthday holiday, which Katz said is starting to rival Presidents’ Weekend for destination guests.
“We want to make room for the destination customer” during those times, Katz said.
Putting more effort into destination business is part of a company strategy intended to increase revenue, not necessarily unit sales.
That focus on revenue is part of the reason Jeff Jones, the company’s chief financial officer, said the company is expecting growth of between 8 and 12 percent in fiscal 2012.
That growth will be driven by amenities such as new chairlifts at Vail and Northstar, new on-mountain and mountainside restaurants and better sales from the company’s retail arm, Katz said.
Looking into the rest of the fiscal year and beyond, Katz said lodging reservations – about half of which have come in so far – are up over last season. International markets are playing increasing roles in the company’s operations, with Mexico, Australia and Canada among the strongest sources of guests. Katz said Brazil is becoming increasingly important as a market, too.
Katz was also enthusiastic about the success of the company’s EpixMix social media program. This year’s addition to EpicMix is on-mountain photographers who will take photos of guests and provide free uploads to those guests’ Facebook pages. High-resolution photos will be sold for about $20 each.
But, Katz said, one of the biggest growth possibilities in the future is a recently passed federal law that makes it easier for resort operators to get U.S. Forest Service permission for summertime amenities at ski areas.
Katz wouldn’t talk about the company’s strategy for summer amenities, saying that Vail Resorts would work with the Forest Service and local communities to determine a direction.
“This is the biggest expansion of recreational opportunities in decades,” he said.