Vail Resorts Profit Snapshot: 2 Things to Watch Out For

Vail Hotels (NYSE: MTN) investors are gearing up for a potentially volatile trading week. The ski resort giant will report its fiscal results for the fourth quarter and the year after markets close on Thursday, September 23.

And while Vail’s management will share tax data from a seasonally low period for most of the company’s properties, management will also answer a few big questions about the company this week, including seasonal subscription sales. and guest bookings before the biggest months of the year. .

Let’s dive into the heart of the matter and take a look at two things that are worth watching.

Image source: Getty Images.

1. Season Pass Trends

Vail’s latest report in early June contained encouraging signs of an epic rebound underway in the resort industry. Season ticket sales for the coming winter are up 33% from two years ago before the pandemic hit. We will have an update on this basic growth trend on Thursday.

Two big question marks cloud this bullish sales outlook. The first is pricing. Average seasonal pass prices dropped significantly in the third quarter, and the company offered more discounts in a sale in early September. This week’s report will show how much Vail has had to cut prices to convince vacationers to sign up for its passes at a time when COVID-19 restrictions were increasing.

Its Whistler Blackcomb complex in Canada, for example, has not been easily accessible to American visitors due to border restrictions. We’ll find out this week if Vail’s pricing strategy overcomes such challenges and paves the way for a busy holiday season for its restaurants, ski schools and hospitality services.

2. The new perspective

Vail’s initial outlook for the coming season predicted a net profit of between $ 93 million and $ 139 million, up from $ 109 million last year and $ 323 million in 2019. However, there were several important assumptions associated with it. such outlook, especially normal weather conditions, no. increased travel or capacity restrictions related to COVID-19 outbreaks and stable vacation demand throughout the fall season.

Vail will not have more clarity this week on the impact of winter weather on his plans to reopen the mountains which will begin in October. But there is a lot of recent data on seasonal membership trends and resort bookings. Look for new CEO Kristen Lynch (currently chief marketing officer), who will officially take the leadership role on November 1, to comment on these factors as Vail updates her outlook.

This will likely be an unusually volatile time for shareholders, as there is a wide range of possible operating results in late 2021 and early 2022. On the bright side, Vail could see a huge growth spurt. supported by a booming economy and strong demand from abroad. activities and other optional services. Yet that rebound could be complicated by the resurgence of the COVID-19 pandemic that threatens to make travel and resort stays more difficult for guests.

Thursday’s report will give investors big clues as to the path Vail Resorts is on as it prepares to welcome skiers to its Colorado properties in late October. But it won’t be until the start of the holiday season (around mid-November) that shareholders will have a good idea of ​​the extent of the rebound in Vail’s growth after the pandemic shutdowns in 2020 and early 2021.

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Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Vail Resorts. The Motley Fool has a disclosure policy.

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