Vail Resorts analysts expect reduced visitation, higher spending at Colorado ski resorts during holiday week |

Vail Resorts analysts expect reduced visitation, higher spending at Colorado ski resorts during holiday week

Timing of school breaks will likely play a role in reducing late December visitation while bolstering early January

John LaConte
Vail Daily
Pete's Express as seen on its first day of operation for the 2022-23 season. Improved staffing and plentiful natural snowfall contributed to a much earlier opening for the lift this season as compared to last season.
John LaConte/Vail Daily

Visitation at Vail Resorts properties, like Keystone and Breckenridge resorts, during the holiday week could be quite the opposite of last season if predictions hold true.

Part of the reason is something local parents won’t be surprised to hear — the fact that kids were still in school on the Thursday before the Sunday on which Christmas falls.

It’s a much different story than last season, when Christmas fell on a Saturday and many public school students received vacation time for the entire week ahead of the holiday.

In the investment world, that’s called a positive holiday shift, or a visitation bump based on where the holiday falls on the calendar. The inverse effect is a negative holiday shift, which is what we’re seeing this season, Vail Resorts analyst Patrick Scholes pointed out in a report released Thursday, Dec. 22.

“In addition to a holiday shift, we see new competitive supply from short-term rentals, the reopening of international markets such as Europe, the Caribbean, and Canada combined with favorable FX for American travelers, and the return of cruising as a value-priced vacation alternative are putting some pressure on domestic resort hotel occupancy,” wrote Scholes and Gregory J. Miller with Truist Securities. “To be clear, this is not just for U.S. ski resorts, but also for popular U.S. resorts such as beach resorts that saw outsized performance two years into COVID.”

Recently released data from DestiMetrics, a company that collects future booking and pricing data for hotels at Western U.S. ski resorts, shows that shifts in school breaks this year versus last year mean that there are roughly 38% fewer households with K-12 children available to travel prior to the holiday week.

“That is reflected in the deep (year-over-year) decline in occupancy between Dec. 15 and 24,” DestiMetrics writes. “And while that’s problematic — and difficult to overcome — more concerning is the peak week of Dec. 25 to 31, which was extremely busy last year but had trouble filling in this year — with extreme room rates playing a role.”

The higher room rates at hotels were noted as a positive in Thursday’s report from Truist Securities, which pointed out that hotels attracting higher spending guests “bodes well for on-mountain spend per visitor and lodging segment profitability.”

The reduced availability for travel in late December has also created a corresponding uptick in travel for early January, something ski resorts are likely to see. That, along with an improved guest experience over last season, could get 2023 off to a positive start for ski resorts.

2023 optimism 

An interesting side note from Truist Securities’ Thursday report was the fact that the firm increased its price target for Vail Resorts. Investment firms set price-target numbers based on how much those firms expect companies’ stocks will be trading at in the future. Truist, in 2022, was one of the more negative companies on Vail Resorts’ stock.

In January of 2022, some firms had price targets above $350 per share for Vail Resorts, which had hit $370 in November of 2021. Truist Securities predicted $322 in early January, but reduced to $302 in February and was down to $278 by March. Truists’ December increase on MTN from $270 to $292 shows an optimistic outlook on the stock, which was trading at $242 when the price target was issued on Thursday. Deutsche Bank, as of Thursday, had a price target of $289, Jefferies investment bank had a price target of $232 and Stifel Nicolaus had a price target of $261 for Vail Resorts.

From Truists’ Thursday report:

“Investors who follow our research may recall that we were highly critical of (Vail Resorts, which stock symbol is MTN) last season as in our view and that of many others, MTN was caught flat-footed by labor shortages in light of Epic pass sales up 76% (year over year). As we noted in our research earlier this year, ‘Realistically, despite MTN’s assurances, it will not be until early-mid December, once the ski season gets underway, that we will get a good indication if MTN’s resorts will be properly staffed. Until then it is mostly wait and see if MTN can execute on its commitment to be much better prepared for the ski season.’”

Truist reported that as of mid-December, at Vail Resorts’ Colorado resorts, “staffing and service levels, both on-slope and F&B, have significantly improved from last season though are not fully back.”

Lessons and grooming were listed among the elements not back to full-service levels, Truist noted.

“The good news for MTN is that lessons have seen sizable price increases and many popular dates, especially for children, sold out quickly in October,” Truist noted. “The bad news is that MTN likely left money on the table due to not having enough available instructors.”

Despite the slight bump in January, hotel reservations at western U.S. ski resorts are down for the rest of the season, as well, DestiMetrics reports. 

A freshly groomed run on Vail Mountain’s Golden Peak competition arena on Monday, Dec. 19.
John LaConte/Vail Daily

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