Vail Resorts Reports Certain Ski Season Metrics for the Season-to-Date Period Ended January 7, 2024
- 2.6% increase in total lift ticket revenue
- 5.0% increase in ski school revenue
- Stability provided by the season pass program and investments in resorts and employees
- Recent improvement in conditions across resorts
- 16.2% decrease in total skier visits
- 5.8% decrease in dining revenue
- Expectation of Resort Reported EBITDA for fiscal 2024 to be in the lower half of the guidance range
Insights
The recent report from Vail Resorts, Inc. reflects a mixed performance in their North American operations, with a notable decrease in skier visits but an increase in lift ticket revenue. This dichotomy suggests that while fewer people are hitting the slopes, those who do are spending more—potentially due to the pricing strategy or value-added services. The resilience of lift ticket revenue amidst lower visitation rates underscores the effectiveness of Vail Resorts' season pass program, which encourages customer loyalty and provides a more predictable revenue stream.
Additionally, the reported increase in ski school revenue indicates a successful upsell of services, which could be attributed to the company's investments in enhancing guest experiences. Conversely, the decline in retail/rental revenue is a concern, potentially indicating less engagement with ancillary services which could impact future profitability if the trend continues.
The company's forward-looking statements regarding EBITDA expectations suggest cautious optimism, banking on the assumption of improved conditions and stable economic factors. This forward guidance is critical for investors as it provides a barometer for future financial health and operational performance.
Vail Resorts' report indicates a complex financial landscape. The 16.2% decrease in skier visits could raise concerns about customer retention and market appeal, especially in the Eastern U.S. and Tahoe regions, which experienced unfavorable weather conditions. However, the 2.6% increase in lift ticket revenue and the 5.0% increase in ski school revenue suggest that Vail Resorts has effectively leveraged its season pass program to mitigate the impact of reduced visitation. This strategy of advance commitment sales is a hedge against variable seasonal factors and highlights the importance of diverse revenue streams in the leisure and hospitality industry.
The company's expectation of EBITDA to be in the lower half of the guidance range reflects the uncertainty inherent in the leisure industry, which is subject to weather variability and economic conditions. The reliance on normal weather patterns and a stable economic environment for the remainder of the fiscal year indicates potential vulnerability to external factors. Investors should note these risks when considering the company's future performance.
The performance of Vail Resorts is indicative of broader economic trends affecting consumer discretionary spending. The decline in visitation yet increase in certain revenue streams suggests that while volume is down, the consumer spending per visit remains robust. This could be reflective of a larger demographic trend where consumers opt for fewer but higher-quality experiences, a pattern that can be observed across different sectors of the economy.
The report also hints at the impact of macroeconomic factors on the company's operations. Vail Resorts' reliance on normal weather conditions and a stable economic environment for the remainder of the ski season implies that shifts in these areas could have significant repercussions. This is particularly relevant given the current concerns about economic fluctuations and climate change, both of which could influence consumer behavior and operational efficiency in the ski industry.
Furthermore, the company's emphasis on its season pass program as a stabilizing force suggests a strategic move towards building customer loyalty and recurring revenue, which could be a defensive maneuver in an uncertain economic climate.
- Season-to-date total skier visits were down
16.2% compared to the prior year season-to-date period. - Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up
2.6% compared to the prior year season-to-date period. - Season-to-date ski school revenue was up
5.0% and dining revenue was down5.8% compared to the prior year season-to-date period. Retail/rental revenue for North American resort and ski area store locations was down13.3% compared to the prior year season-to-date period.
Commenting on the ski season-to-date, Kirsten Lynch, Chief Executive Officer said, "Given the challenging conditions to start the 2023/2024 North American ski season, we are pleased with our season-to-date results and the guest service delivered at our resorts, highlighting the stability provided by our season pass program and the investments we have made in our resorts and employees. Through the holiday period ended January 7, 2024, conditions across our North American resorts were below average in all regions compared to the strong early season conditions in the prior year period, leading to a decline in both local and destination skier visitation. The unfavorable conditions impacted all of our North American resorts, and particularly our
Lynch continued, "As a result of the challenging conditions through the holiday period, season-to-date guest visitation and revenue was below our expectations in
Basis of Presentation
The reported ski season metrics include growth for season pass revenue based on estimated fiscal 2024 North American season pass revenue compared to fiscal 2023 North American season pass revenue. The metrics include all North American destination mountain resorts and regional ski areas, and are adjusted to eliminate the impact of foreign currency by applying current period exchange rates to the prior period for Whistler Blackcomb's results.
About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts is a network of the best destination and close-to-home ski resorts in the world including Vail Mountain,
Forward-Looking Statements
Certain statements discussed in this press release, other than statements of historical information, are forward-looking statements within the meaning of the federal securities laws, including the statements regarding expected fiscal 2024 performance (including the assumptions related thereto), including our expected Resort Reported EBITDA; our expectations regarding weather and economic conditions, and their potential impacts on the business; and our expectations regarding the performance of our ancillary lines of business. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include but are not limited to the economy generally, and our business and results of operations, including the ultimate amount of refunds that we would be required to refund to our pass product holders for qualifying circumstances under our Epic Coverage program; prolonged weakness in general economic conditions, including adverse effects on the overall travel and leisure related industries; risks associated with the effects of high or prolonged inflation, rising interest rates and financial institution disruptions; unfavorable weather conditions or the impact of natural disasters or other unexpected events; the willingness or ability of our guests to travel due to terrorism, the uncertainty of military conflicts or public health emergencies, and the cost and availability of travel options and changing consumer preferences, discretionary spending habits or willingness to travel; risks related to travel and airline disruptions, and other adverse impacts on the ability of our guests to travel; risks related to interruptions or disruptions of our information technology systems, data security or cyberattacks; risks related to our reliance on information technology, including our failure to maintain the integrity of our customer or employee data and our ability to adapt to technological developments or industry trends; our ability to acquire, develop and implement relevant technology offerings for customers and partners, including effectively implementing our My Epic application; the seasonality of our business combined with adverse events that may occur during our peak operating periods; competition in our mountain and lodging businesses or with other recreational and leisure activities; risks related to the high fixed cost structure of our business; our ability to fund resort capital expenditures; risks related to a disruption in our water supply that would impact our snowmaking capabilities and operations; our reliance on government permits or approvals for our use of public land or to make operational and capital improvements; risks related to federal, state, local and foreign government laws, rules and regulations, including environmental and health and safety laws and regulations; risks related to changes in security and privacy laws and regulations which could increase our operating costs and adversely affect our ability to market our products, properties and services effectively; potential failure to adapt to technological developments or industry trends regarding information technology; risks related to our workforce, including increased labor costs, loss of key personnel and our ability to maintain adequate staffing, including hiring and retaining a sufficient seasonal workforce; a deterioration in the quality or reputation of our brands, including our ability to protect our intellectual property and the risk of accidents at our mountain resorts; risks related to scrutiny and changing expectations regarding our environmental, social and governance practices and reporting; our ability to successfully integrate acquired businesses, including their integration into our internal controls and infrastructure; our ability to successfully navigate new markets, including
All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All guidance and forward-looking statements in this press release are made as of the date hereof and we do not undertake any obligation to update any forecast or forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by law.
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SOURCE Vail Resorts, Inc.
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