Vail Resorts posts gains for 2018 fiscal year, despite Colorado snow shortage

Sep 29, 2018

Scott Miller - Vail Daily

BROOMFIELD — Vail Resorts in its 2018 fiscal year posted gains in lift revenue and other areas, despite a snow-short winter in Colorado.

In a Friday, Sept. 28, call with analysts and investors, Vail Resorts CEO Rob Katz noted that fiscal 2018 net revenue increased 6.9 percent in the company's Mountain Division over fiscal 2017.

In addition, ski school revenue increased 6.8 percent, with a 7.2 percent increase in retail and rental revenue.

Katz said those increases were driven in large part by the company's acquisition of the resort in Stowe, Vermont.

In the lodging segment of the company, year-over-year revenue per available room increased 2.4 percent.

Vail Resorts is bringing four new resorts into the company's portfolio for the 2018-19 winter season: Crested Butte, Mount Sunapee in New Hampshire and Okemo in Vermont and, in a separate deal, Stevens Pass in Washington. All four resorts will honor Vail Resorts' various Epic passes.

As with the acquisition of Stowe in 2017, Whistler Blackcomb in 2016 and Park City in 2014, the company expects a boost in pass sales, skier visits and other mountain revenue from the latest additions. But, Katz said, it's too early to speculate what that impact could be.

ATTRACTING NEW GUESTS

Katz said pass sales grew in the company's 2018 fiscal year, which runs Aug. 1 to July 31. Katz noted the success of the company's Epic Pass aimed at military families. Katz said that pass is starting to bring new customers to the company.

Those passes, for active or retired military members and dependents, start at $129 per person for unlimited skiing at 18 Vail Resorts properties.

An earnings report in June didn't include much information about the pass. Now, Katz said, the company has "a lot more insight" into who's buying those passes and whether they're current or new customers.

And, Katz said, while the military pass is less expensive than other Epic products, those guests still buy meals, rent gear and take classes.

Responding to a question from industry analyst Felicia Hendrix, of Barclay's — the earnings calls are open to questions only from industry analysts — Katz said the company is working to attract other potential new guests. The Epic Schoolkids program offers four free days of skiing to students in kindergarten through fifth grade in Colorado, Utah and Canada.

Katz said "there's a lot more room in our industry" to attract new guests, especially from "minority populations." Those efforts need to be echoed throughout the ski industry, he added, to bring more new skiers and riders to the sport.

HIRING IN THIS MARKET

While many analysts' questions revolved around pass sales and revenue, Brad Boyer, of Stifel Nicolaus, asked how Vail Resorts is handling hiring in a nationally tight labor market.

"It's been a challenge," Katz said. He noted that the company is raising its wages by $1 per hour at many of its resorts and talked about the company's efforts to boost workforce housing efforts in the communities in which it operates.

For recruitment, Katz said Vail Resorts is using many of the techniques it uses to reach potential guests: online and social media advertising and data analytics. Katz said the goal is to provide a good experience for employees and encourage them to return.

"We talk about the company as a good place to work," he said.

Boyer also asked Katz if Vail Resorts has plans to expand into Europe.

Katz noted that the company already has partnerships with a number of European resorts, adding that Europe is the "biggest ski market in the world."

But, Katz said, there's a lot of complexity in the European ski industry.

"It's an opportunity," he said, adding, "We want to do it in the right way."

Katz was also asked about competition from Alterra Mountain Co.'s Ikon Pass and whether that pass has any influence on how Vail Resorts structures its prices.

"At the moment we're focused on our own metrics," Katz said, adding that a lot of factors go into how prices are set.

At the end of trading Friday, Vail Resorts' stock price was $274.42 per share, down $11.71 from the previous day's closing price.

Chris Dillmann | cdillmann@vaildaily.com

As part of Vail Resorts' quarterly earnings report, company CEO Rob Katz announced a project to expand snowmaking on Vail Mountain. Despite a snow-short winter last season, the company reported revenue gains across its mountain and lodging segments.

Vail Daily Business Editor Scott Miller can be reached at smiller@vaildaily.com and 970-748-2930.