Vail Resorts Reported a Decrease in Skier Visits

Vail Resorts disclosed a 9.7 percent decline in total season-to-date skier visits, alongside a 2.2 percent year-over-year reduction in total net revenue for the three-month period ending Jan. 31, 2024. Responding to this underperformance, the company revised its fiscal guidance for 2024, although it anticipates a resurgence in performance this spring, buoyed by improved conditions out West and historical visitation trends.

Kirsten Lynch, CEO of Vail Resorts, attributed the second-quarter results to adverse conditions across all North American resorts. Western resorts experienced approximately 42 percent less snowfall compared to the prior year, while Eastern U.S. resorts faced limited natural snow and variable temperatures. Skier visits fell short of both previous years and company projections, affected by challenging conditions and shifting visitation patterns.

Revenue metrics for the season-to-date period as of March 3 showed a mixed picture. While total lift revenue increased by 2.6 percent and ski school revenue rose by 5.5 percent, dining revenue saw a slight decrease of 0.5 percent. However, rental and retail revenue experienced a notable decline of 9.3 percent.

These figures mark an improvement over the preceding three-month period, which witnessed a 4.4 percent drop in dining revenue and a significant 14.9 percent decline in rental/retail revenue. Lodging revenue also decreased by 3 percent during that same period.

The declines can be partly attributed to reduced skier visits. Furthermore, the closure of certain leased operations and a reduction in inventory affected rental and retail revenue, while lodging revenue was impacted by decreased bookings.

To mitigate these challenges, the company reduced second-quarter operating expenses by 5.8 percent compared to the prior fiscal year, employing disciplined cost management and reducing labor hours. However, the constrained early-season weather delayed resort openings and limited available terrain, contributing to the overall decline in total net revenue.

Consequently, Vail Resorts adjusted its fiscal 2024 guidance, projecting net income between $270 million and $325 million, down from the previous range of $316 million to $394 million. Resort-reported EBITDA is expected to be between $849 million and $885 million, down from the previous range of $912 million to $968 million.

Despite the revised guidance, Lynch remains optimistic about the spring outlook, anticipating improved performance driven by pre-committed guests, historical guest behavior patterns, improving conditions, and positive lodging booking trends for the Spring Break period.

Vail Resorts’ 2024-25 Epic Pass suite went on sale last week. Lynch noted that on average, pass prices have increased 8 percent over the prior season’s launch price. Crans-Montana has been added to the pass this year.

The company expects to close on its acquisition of the Swiss resort this spring, said Lynch, who added that the acquisition was part of Vail Resorts’ “growth strategy of expanding its resort network in Europe, creating even more value for pass holders and guests around the world.”

Ski the world!

Source: SAM