Vail Reports First Quarter Loss
SAM Magazine—Broomfield, Colo., Dec. 4, 2012 —Vail Resorts (VR) reported a loss of $60.6 million for the quarter ended October 31, 2012, compared to a loss of $55.7 million in the same quarter a year ago. Revenues were flat at $166.4 million for the period, a traditionally slow time for the company’s resorts.
“We observed improving trends in our summer business in both our mountain and lodging operations,” said CEO Rob Katz. Dining revenues increased $0.7 million, or 12.9 percent, with Kirkwood contributing $0.4 million. Revenue per available room increased 7.8 percent, although the average daily rate decreased 2.6 percent at VR’s owned hotels and managed condominiums compared to the same period in the prior year. Activities revenue also increased.
Retail/rental revenues decreased by 0.9, primarily due to lower sales at pre-ski season sales events at VR’s network of Specialty Sports Venture retail shops compared to the prior year's record pre-season sales events.
On a positive note, unit sales of season passes through November were up about 5 percent, and pass revenues were up 8 percent, adjusted as if Kirkwood were owned in both periods. Revenue from these sales is recognized over the course of the next two fiscal quarters.
"We are very pleased with the results of our pass sales effort this year, particularly given the challenging weather last season and the record performance we had in passes last year,” Katz said. He added, “The total growth of the program is slightly below our expectations, as we believe that the amount of sales that we pulled forward to earlier selling periods was somewhat larger than expected, and that weather was still a concern for those purchasers who delayed their purchasing decisions. Sales in Tahoe and international markets continued to show the most strength.”
Lodging bookings for the winter season are slightly down, with strength at Keystone, which has shown strong early bookings driven by its new "Kids Ski Free" program. Based on historical averages, less than 50 percent of VR bookings for the winter season have been made by this time.
Commenting on fiscal 2013 guidance, Katz continued, "In September, we issued guidance of 27 to 32 percent growth in resort reported EBITDA. Based on some of the most recent booking trends we are currently seeing, we believe that it will be more difficult to achieve that guidance than we anticipated in September.” He said the company will update its guidance when it releases its early season metrics in mid-January.