In its fiscal year earnings report, the company said pass sales through Sept. 22, 2023, for the upcoming season increased about 7% in units and approximately 11% in dollars compared to the same period last year.
“Advance commitment continues to be the foundation of our strategy, shifting guests from short-term, refundable lift ticket purchases to a nonrefundable commitment before the season starts, in exchange for greater value,” said Kirsten Lynch, CEO of Vail Resorts, in a release.
“We are pleased with the results of our season pass sales to date, which demonstrate the compelling value proposition of our pass products, our network of mountain resorts, and our commitment to continually investing in and delivering a strong guest experience.”
Pass Commitments Pay Off
For the company’s mountain segment, total lift revenue increased 8.4% to $1.42 billion for the fiscal year ended July 31, 2023 on pass and non-pass product revenue.
Vail Resorts operates 37 mountain resorts and regional ski areas including Vail, Beaver Creek, Breckenridge, Keystone, and Crested Butte in Colorado; Heavenly, Northstar, and Kirkwood in the Lake Tahoe area, and Stowe, Mount Snow, and Okemo in Vermont.
The company’s main pass product is the Epic pass.
According to Lynch, Vail’s results highlight the stability of the advance commitment from season pass products in a season with challenging conditions, including travel disruptions during the peak holiday period, abnormal weather conditions which significantly reduced operating days, terrain availability, and activity offerings across the company’s American resorts.
“This past season, approximately 75% of skier visitation at our North American resorts, excluding complimentary visits, was from pass product holders who committed in advance of the season, which compares to approximately 72% for the 2021/2022 North American ski season,” Lynch said.
The company reported strong pass sales in destination markets, including in the Northeast. It saw the strongest product growth in regional pass products and Epic Day Pass products for customers who are lower-frequency visitors.
“We continue to prioritize advance commitment as the best way for guests to access our mountain resorts,” Lynch said.
“Similar to prior seasons, lift ticket sales will be limited during the 2023/2024 season in order to prioritize guests committing in advance with season passes and to preserve the guest experience at each resort.”
Annual Revenue Up
Total company net revenue increased 14.4%, to $2.9 billion.
Net income for the fiscal year ended July 31 declined 23% to $268.1 million, compared to $347.9 million for fiscal 2022.
According to Vail, the income decrease is largely due to a large gain on disposal of fixed assets in fiscal 2022 and an increase in fiscal 2023 expense associated with a change in the estimated fair value of the contingent consideration liability related to its Park City resort lease.
“Given the significant weather-related challenges this past season, we are pleased with our overall results for the year, with strong growth in 2022/2023 North American ski season visitation and spending compared to the prior year, further supported by the stability created by our advance commitment products,” Lynch said.
Vail saw visitation growth because of the pass sales, the addition of Andermatt-Sedrun in Switzerland, the full-year impact of the Seven Springs Reports in Pennsylvania it acquired at the end of 2021, and record visitation and net revenue in March and April, according to the company.
Ancillary businesses such as ski schools, restaurants, and retail and rental shops posted better numbers post-COVID-19 as those areas returned to normal.
Vail posted a $128.5 million net loss for the quarter compared to a $109 million loss for the same period last year. Vail’s net loss widened to $128.5 million in the fourth quarter compared to a net loss of $109 million for the same period last year.
Lynch attributed the profit challenges to the company’s 2023 investments in employees, as well as below average snowfall and snowmaking temperatures that limited terrain availability during the Australian winter season.
Resort net revenue increased .9% to $269.6 million for the quarter compared to $267 million for the same period last year.
North American summer operations also underperformed expectations, which Lynch said was caused by lower demand for destination mountain travel as people had more options for travel coming off two years of pandemic restrictions.
Vail plans to invest about $180 million to $185 million in calendar year 2023 on lift, terrain, and food and beverage expansion projects.
The projects include:
- Completing the Bergman Bowl project at Keystone, which will increase the lift-served terrain by 555 acres.
- Replacing and expanding the capacity of chairlifts at Whistler Blackcomb, Stevens Pass, and Attitash resorts.
- Piloting a new gear membership program that allows members the ability to choose ski and snowboard gear, for the full season or for the day, and have it delivered to them with slopeside pick up and drop off.
- Introducing a way for visitors to store their passes on their phones to scan at the lifts via Bluetooth technology.
For fiscal 2024, Vail expects net income to be between $316 million and $394 million and EBITDA to be between $912 million and $968 million.
The guidance assumes the economic environment and weather conditions will be normal for the 2023/2024 North American and European ski season and the 2024 Australian ski season.
“As we head into fiscal year 2024, we are encouraged by the strength in advance commitment product sales and remain committed to delivering a strong guest experience while maintaining cost discipline,” Lynch said.
“We expect meaningful growth for fiscal 2024 relative to fiscal 2023 with strong resort EBITDA margin.”
Bart Schaneman can be reached at email@example.com.