Vail Resorts to raise minimum wage to $20 per hour
Amid rising visitation, profits, company aims to invest in staffing
Vail Resorts on Monday announced the company will be increasing its minimum wage to $20 per hour for the 2022/2023 North American ski season.
The new base pay will apply at all the company’s U.S. resorts. Canadian resorts will also increase base pay to 20 Canadian dollars per hour. Those in skilled positions — including ski patrol, drivers and others — will start at $21 per hour. Vail Resorts CEO Kirsten Lynch said salaried employees will see wage increases beyond the current rate of inflation.
The company made the announcement in a press release on Monday in advance of the company’s 2022 second quarter earnings call.
The goal is to get company staffing back to normal levels, Lynch said in a conference call discussing the company’s financial performance in the second quarter of its fiscal year. The company expects to spend $175 million for employee raises and other initiatives. That also includes increasing the company’s human resources staffing by about 50%. That’s a roughly $4 million cost.
Responding to an analyst’s question, Lynch said the wage increase is more about returning to normal staffing than adding new people.
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Part of that return to normal operations — marked by the 2019-2020 season before company shut down its resorts in March of 2020 — will be a return to normal levels of visitation. That’s particularly important at Whistler Blackcomb. That and other Canadian resorts were particularly hard hit by COVID-related travel restrictions.
Omicron and staffing
Vail Resorts’ staffing took a hard hit early this season, particularly around the Christmas holidays. Lynch said staffing was already short during that time, and then was affected even more by a spike in cases of COVID-19 driven by the omicron variant. That spike put roughly 10% of the company’s staff on the sick list.
For the season to date through March 6, Vail Resorts is reporting a 2.8% increase in skier visits compared to the company’s 2020 fiscal year. Lift revenue increased more than 10%.
On the other hand, the company’s other lines of business — particularly in food and beverage, still lag behind the 2020 fiscal year numbers. Declines were also seen in ski school and rental revenue.
On the other hand, lodging occupancy has increased since the Christmas holidays, and the average daily rate has also increased.
Vail Resorts puts a lot of emphasis on pass sales, which provide revenue stability in a seasonal business. The company in March of 2021 announced a 20% price cut in Epic Pass prices, which took prices back to 20215-2016 levels.
Use of passes of all kinds this season is up to 69% of all visitors. But those discounted passes haven’t affected peak-period visitation, Lynch said.
It’s weekday growth
The growth — nearly 10% — has come on weekdays, with weekends and holiday visitation essentially flat. That’s “an outcome we’ve wanted to achieve,” Lynch said.
Vail Resorts Chief Financial Officer Michael Barkin said more weekday visits, from both day and destination skiers, is a “great utilization of capacity.”
To further boost capacity, the company is planning a capital improvement plan worth between $327 million and $337 million. Those projects include 20 new or replacement lifts across 14 resorts, including lifts at Vail and Keystone.
Given the popularity of the company’s winter resorts, Barkin said Vail Resorts is updating its guidance for the rest of this fiscal year, which ends July 31. That update includes the expectation that lodging will outperform previous guidance. The updated guidance assumes “normal conditions and operations,” with no associated COVID restrictions, including at the company’s Australian resorts.
Lynch acknowledged that this season has been “challenging,” from early season conditions to negative press reports around the company’s universe. But, she added, the company is focused on “giving confidence to out customers … We feel confident in our strategies.”
For the full release, go to investors.vailresorts.com.
$175 million: Vail Resorts’ anticipated spending on wage increases and beefing up its human resources department
$223.4 million: Net income attributable to Vail Resorts for its second fiscal quarter of 2022.
2.8%: Increase in skier visits season to date compared to the 2020 fiscal year.
$1.91: Announced quarterly per-share dividend for shares held as of March 30.
Source: Vail Resorts