Vail Resorts sees 14.6 percent drop in skier visits, but season pass sales keeps revenue stable

There’s a reason Vail Resorts sells its season passes in the spring, summer and fall. It’s insurance against a bad winter season such as this one.

There’s a reason Vail Resorts (NYSE:MTN) sells its season passes in the spring, summer and fall. It’s insurance against a bad winter season such as this one.

The Broomfield, Colo.-based owner of four ski resorts in that state and three in the Lake Tahoe Nevada/California region, reported skier visits down 14.6 percent due to a lack of snow for the three-month period ended Jan. 31, 2012, but its mountain revenue declined less than a percentage point in the quarter due to a 13.5 percent increase in season pass revenue sold earlier in the season. The company also benefited from a 9.1 percent increase in its effective ticket price, officials said.

Vail Resorts reported its latest quarterly mountain revenue at $315.9 million, versus $318.3 million a year ago. Overall, the company’s consolidated revenue for the quarter fell 5.5 percent to $373.3 million, including its weaker real estate and lodging sales.

Vail Resorts CEO Rob Katz said officials were pleased with the results, given “what many would consider a worst case weather scenario, which followed last season's record setting snowfall.”

Katz said snow conditions began to improve at its Colorado resorts in mid-January and continue to look good heading into spring break. Meanwhile, the Tahoe region, where Vail recently acquired Kirkwood Resort, continued to struggle until some recent snowfall in late February and early March.

Looking ahead to the offseason, Vail Resorts officials announced capital plans valued at $75-$85 million, including $30 million in improvements at Northstar, plus a new 10-person, heated, Wi-Fi capable gondola at Vail Mountain through Vail Village, where almost half of its guests start their ski day.

The question ahead for investors is whether Vail will be able to rely on strong pass sales for next season. Just as last winter’s record snowfall excited skiers and snowboarders to buy passes early for this season, this winter’s lack of snowfall could hamper next season’s early pass sales.

--David Clucas



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