Vail Resorts rebounds with record revenue, 2022 profit

Vail Resorts rebounded from two years of pandemic-reduced performance to post its best year ever in 2022.

On Wednesday, the company reported more than $2.5 billion in net revenue and $836.9 million in revenue from its ski and hotel operations, setting an all-time record for the largest resort operator in the world. ‘North America.

Vail Resorts also reported a record 17.3 million skier visits for the 2021-22 ski season, accounting for 28% of ski resort traffic nationwide. Four of the company’s ski areas have been the busiest resorts in the country in 2021-22, with Breckenridge having the highest number of skier visits in the United States, followed by Vail Ski Area, Park City Mountain Resort in Utah, and Keystone. The company’s Beaver Creek Ski Area ranked 10th most visited ski area last season. Vail Resorts does not publish visitation counts for individual resorts.

Wednesday’s earnings release marks a rebound from the early weeks of the 2021-22 ski season, when the company struggled to open the pitch amid a labor shortage, which was particularly acute in mountain communities. Home prices in mountain communities rooted in resorts have more than doubled since the start of the pandemic, causing a housing shortage for workers.

Vail Resorts chief Kirsten Lynch told investors and analysts on a conference call Wednesday that housing “is a crisis in our mountain communities,” while detailing the progress of worker housing projects in her resorts in Utah and British Columbia. She said her company’s “main goal and priority” is to partner with mountain communities to create housing for its workers.

That’s not happening at its flagship Vail ski area, where the company is embroiled in a legal battle with the city of Vail over plans to build housing for 165 workers on a parcel where the city wants to protect a herd of bighorn sheep. Vail Resorts filed a lawsuit in Eagle County District Court challenging the legality of Vail City Council’s emergency ordinance blocking all permits on the parcel. The city last week offered the company $12 million for the package and asked Vail Resorts to respond early next week.

Vail Resorts’ 2022 fiscal year — which ended July 31 — was buoyed by a record end to the ski season. The company reported $372.6 million in net income in February, March and April of this year, around $80 million more than the same critical three-month period in 2019. The summer was also good, with record traffic at the company’s three Australian stations and a rebound in the number of visitors in warm weather. at its North American resorts.

In December, Vail Resorts announced that it had sold 2.1 million of its Epic Passes for the 2021-22 ski season, an increase of 700,000 season and one-day passes from the previous season. Last season, more than 72% of skiers at the company’s 37 North American ski resorts used one of these packages purchased before the start of the season. It’s a major pillar of Vail Resorts’ business strategy: Selling more advanced lift tickets and packages before the lifts start running for the season removes the resort industry’s historic struggle with the unstable flow of income based on snowfall.

After seeing a 50% annual increase in sales of the Epic Pass and a more limited Epic Local Pass for the 2021-22 season, the company reported a 10% drop in those passes for the 2022-23 season. . But sales of the Epic Day Pass have been robust. On Wednesday, the company reported that pass sales were ahead of the previous season by 6% in units and 7% in dollars.

Lynch said the drop in season tickets among his frequent skiers was expected. She said the company was “heavily penetrated” in the more dedicated skier market.

“We expect the majority of growth to continue to come from Epic Day Tickets as we convert low and lower frequency visitors into pass-through products,” she told investors and analysts.

Vail Resorts planned to spend up to $337 million on capital renovations this year, including 18 new chairlifts. That record spending dropped about $10 million when planning officials in Park City, Utah revoked the company’s permit to upgrade two chairs at its Park City Mountain Resort. Then the company was forced to delay the completion of a new chairlift at its Keystone ski area after White River National Forest officials discovered crews had carved out a road in alpine terrain beyond its authorized limit. Lynch told investors that “a construction issue” pushed the opening of Keystone’s new Bergman Bowl chair to the 2023-24 ski season and noted that delays in Keystone and Park City would cost the company about 20 million additional dollars.

Vail Resorts has $1.1 billion in cash in the bank. When an analyst asked how the company would prioritize possible uses of that largesse, CFO Michael Barkin said the focus would remain on investing “internally in the business as well as seeking strategic acquisitions. “. Last month, Vail Resorts reached a $156 million cash deal for a 55% stake in the Swiss resort town of Andermatt-Sedrun, marking the company’s first acquisition in Europe.

The company said it plans to spend up to $196 million on projects in 2023, including upgrades to Breckenridge’s Peak 8, a new high-speed quad chairlift in Attitash, New Hampshire, a new chair at Stevens Pass in Washington and the addition of 500 new parking spaces across four stations the company has not identified. Vail Resorts is retooling the two elevators it had planned to install in Park City to replace them in Whistler, British Columbia.

The company has not announced any plans or investments at its Crested Butte Mountain Resort. Since the company acquired the Crested Butte ski area in 2018, it has replaced two fixed handle chairs with higher capacity lifts. The 1,500-acre Gunnison County ski area hasn’t seen the level of investment that Vail Resorts has made in its much busier four resorts in Summit and Eagle counties.

The company announced new technology on Wednesday that would allow skiers to load their passes into their phones, eliminating the need for plastic cards slipped into pockets, but still offering hands-free swiping.

Last season, a labor shortage left Vail Resorts limping through the critical holiday period. The company has invested $175 million this year in its employees, raising its minimum wage to $20 an hour at all of its North American ski resorts and investing in housing, employee training and human resources. Lynch said the company was fully staffed at its stations this summer and was “on track for full staffing” for the 2022-23 season.

“We feel good about where we are in the process right now,” Lynch said.

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