Vail Resorts 3rd Quarter Reflects Good, Bad Weather

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SAM Magazine—Broomfield, Colo., Mar. 17, 2014—Reflecting its diversified holdings across Colorado, Utah, and California, where this winter's weather has been both favorable and not, Vail Resorts saw net income decline 2.1 percent, to $59.1 million, for the second quarter of fiscal 2014 ended Jan. 31, 2014. Visit growth of 11.9 percent at its Colorado resorts was offset by a 27.7 percent decline at its Tahoe resorts during the period.

"Overall, we are very pleased with our performance in the second quarter of fiscal 2014,” said CEO Rob Katz. “Despite the very challenging conditions in Tahoe, where total snowfall was down 73 percent as of January 31, 2014 compared to the prior year, we have seen overall growth in visitation of 9.1 percent and increased guest spending.”

Of Tahoe, Katz said, “Our Tahoe resorts only had 33 percent of trails open as of January 31, 2014, compared to 95 percent of trails open at the same point last season, and compared to 65 percent of trails open even during the very challenging 2011-12 ski season.”

Overall, total lift revenue increased by 11.2 percent, and total mountain revenue increased by 8.3 percent compared to the prior year, largely due to acquisitions. “Our mountain performance includes the results of Canyons, which were in line with our previous public estimates, and the results of our urban ski areas, whose performance was quite strong and also in line with our expectations," Katz said.

Lodging revenue was a particular high point, posting a 21.3 percent rise compared to the prior year. Revenue per available room increased 12.4 percent. The figures include the addition of Canyons; and reflect VR's minimal lodging holdings in Tahoe.

VR plans to invest $85 million in winter-related capital projects for calendar year 2014—including $50 million in maintenance—and $5 million in summer-related projects. Notable improvements include a combination gondola/six-pack at Beaver Creek to replace the mainstay Centennial quad, and a six-pack to replace the workhorse Colorado quad at Breckenridge.

Katz said VR expects to maintain its future winter-related annual capital expenditures in Colorado and California at approximately $85 million total/$50 million annual maintenance. “These levels would exclude the investment we plan to make in our Epic Discovery and summer-related projects, which we expect will total approximately $85 million in the upcoming years,” Katz said, “and significant one-time capital improvements associated with acquisitions, including Canyons."

VR also released ski season-to-date metrics for the season-to-date, through Mar. 9, compared to the previous year for the same period, adjusted as if Canyons were part of the company in both years, but excluding the Midwest areas. Skier visits were up a marginal 0.2 percent; that reflects growth of 7.1 percent in Colorado and Utah, and a decline of 20.4 percent in Tahoe. Lift revenue, including an allocated portion of season's pass revenue, was up 4.9 percent.