Vail Resorts to replace Sun Up lift at Vail
By the numbers
2: Units sold at both Vail’s Ritz-Carlton Residences and One Ski Hill Place at Breckenridge.
500,000: Expected ski pass sales for the 2015/2016 ski season.
13 percent: Growth in pass sales from the 2014/2105 ski season.
125.58: Vail Resorts’ Dec. 7 final stock price, up 3.58.
tBROOMFIELD — As long as Vail has been a public company, it has reported losses in its first fiscal quarter, which runs from August through October. Those losses eased this year, due to skiing in Australia, pass sales and strong summer business.
The company’s first-quarter earnings call, led by company CEO Rob Katz and Chief Financial Officer Michael Barkin, reported a loss of $46.5 million, compared to a loss of $70.5 million for the same period last year. Those losses are based on earnings before interest, taxes, depreciation and amortization, also known as EBITDA.
The lower first-quarter loss came amid other strong news for the company. Katz said the company’s Perisher resort in Australia has helped fuel pass sales there. Revenue from the resort also exceeded expectations. Katz said Australia is now Vail Resorts’ strongest international market.
Given the strength of the U.S. dollar against other currencies, Katz said reservations from other international markets are “soft” at the moment, but said overall bookings at the company’s lodges are somewhat better than the same period last year. But, Katz added, the company recorded less than 50 percent of its ski season reservations by the end of the quarter, Oct. 31.
Support Local Journalism
Lodging reported increases in both occupancy and rate. That extended to summer business, particularly at the company’s Grand Tetons Lodge in Wyoming.
The strength of the company’s summer business points to “strong demand for travel spending in the western United States,” Katz said.
Summer business is poised to expand in 2016 as Vail Resorts rolls out most of the on-mountain amenities planned for the Epic Discovery program. Those amenities include mountain coasters, ziplines and other features expected to greatly increase summer visits.
PASS SALES STRONG
In addition to lodging and other resort revenue, Katz said ski pass sales have grown in both price and number sold. The growth of pass sales has been particularly strong in Colorado and Utah, Katz said. California sales are “in line with last year,” Katz said.
Overall, the company expects to sell about 500,000 passes worldwide.
The company’s real estate division also did well in the quarter, with the sale of two units each at the Ritz-Carlton Residences in Vail’s Lionshead Village and One Ski Hill Place in Breckenridge. The company also sold a parcel at Beaver Creek.
NEW LIFT PLANNED AT VAIL
While the first quarter earnings call isn’t known for big announcements about on-mountain improvements, Katz did provide the first information about some coming project at Vail and Breckenridge.
At Vail, the Sun Up Lift, currently a fixed-grip triple chair, will be replaced by a high-speed quad lift. That will speed access into the resort’s Sun Up Bowl and Blue Sky Basin. That also means that Vail will have high-speed lifts at all its major uphill routes, Katz said.
At Breckenridge, the company will build a new, 500-seat restaurant atop Peak 7.
Those improvements will be complete in time for the 2016-17 season.
VR BUYING ITS OWN STOCK
The company’s capital spending plan for the 2016 fiscal year will approach $100 million, Katz said.
Katz also talked about the company’s quarterly dividend — 62.25 cents per share for the quarter — as well as a stock repurchase program.
The company bought almost 378,000 shares of its own stock during the quarter, and Katz said the Vail Resorts board of directors has approved a total repurchase of 2.2 million shares for the 2016 fiscal year.
Shane Fleury, a financial adviser with the Vail Valley branch of Northwestern Mutual Wealth Management, said companies repurchase stock in order to make other outstanding shares more valuable.
“What they’re doing is reducing the number of pieces of the pie,” Fleury said. “That makes each remaining piece more valuable.”
And, Fleury said, a stock repurchase is essentially a tax-free dividend. Actual stock dividends are taxable income.
INVESTING IN EMPLOYEES
Responding to a question from Felicia Hendrix, an analyst with Barclays Capital, Katz said he and other company officials believe they can continue to meet financial and earnings targets even after last week’s announcements that the company had established a foundation for employees facing financial difficulties and that the company will commit $30 million to help build workforce housing at or near its resorts.
“Attracting employees is our number one concern in driving success,” Katz said. “It will require investments in wages, benefits and housing.”
For now, though, Katz said peak of the company’s earning season — the second and third quarters — is off to a good start. Early-season snow in Colorado is “outstanding,” he said, with good snow in Utah. And, after consecutive seasons of historic drought, resorts in the Lake Tahoe actually opened earlier than planned this season.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com or @scottnmiller.
Support Local Journalism
Readers around Vail, Beaver Creek and Eagle Valley make the Vail Daily’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Each donation will be used exclusively for the development and creation of increased news coverage.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
As Jason Varnish hung from a Vail chairlift in February, eventually dying of positional asphyxia, the lone lift operator yelled to witnesses that he was not able to reverse the lift without permission, according to a Sheriff’s Office incident report released Wednesday.