Vail Resorts announces big plans for Whistler during first quarter earnings call
BY THE NUMBERS
14 percent: Increase in season pass sales over the first quarter of the previous year.
8.5 percent: Increase in revenue per available room over the first quarter of the previous year.
$140.4 million: Cash on hand at the end of the quarter.
$225.50: Vail Resorts’ stock price at the close of the trading day Thursday, Dec. 7, up $4.32.
Sources: Vail Resorts, Yahoo Finance
BROOMFIELD — Vail Resorts President Rob Katz used the company’s quarterly earnings report to announce that Whistler Blackcomb resort will be a big part of next year’s capital improvement plan.
During the call, Katz announced that Vail Resorts will invest $52 million — $66 million in Canadian dollars — to build improvements including a new, 10-passenger gondola. New lifts will also include a six-seat chairlift and a new, high-speed quad at the resort. In all, the improvements will boost uphill lift capacity by 43 percent.
The gondola will be part of what the company calls the world’s first interconnection of three gondolas at one resort.
During the call, Katz said the company has plans for a total of $150 million in mountain improvements in its 2018 fiscal year. The full plan will be announced in March 2018.
“We remain committed to reinvesting in our resorts,” Katz said, adding that the company is working on “several signature investments” for the 2018-19 ski season.
Responding to a question from market analysts participating in the call, Katz said the announcement about Whistler allows the company to get an early start on marketing efforts.
Signs will go up at the resort this season, and guests will know there are improvements coming. That “drives a perception of quality,” Katz said. That, in turn, can help draw high-end guests to the resort.
While the company is putting a lot of money and effort into Whistler, Katz said the company has delayed plans for a water park — introduced before Vail Resorts bought the resort.
Katz said Whistler has lived up to expectations in drawing both domestic and international guests. But, Vail Resorts Chief Financial Officer Michael Barkin added, the continued retreat in value of the Canadian and Australian dollar against its U.S. counterpart is impacting the company’s guidance to investors.
THE USUAL LOSS
Talking about the start of the company’s fiscal year, Barkin said the company posted a net loss of $28.4 million in its first quarter. That compares to a loss of $62.2 million for the same period in the 2017 fiscal year.
That fiscal year is Aug. 1 to July 31. Resorts aren’t operating through much of the period, so it’s common for the company to post a loss during the quarter. The news was good enough that Katz said the company will pay a quarterly dividend of $1.05 per share to shareholders of record as of Wednesday, Dec. 27.
Katz and Barkin also had positive news about other parts of the company’s operations.
Resort net revenue for the quarter increased by $42 million over the first quarter of the previous year. A company release attributed much of that increase to revenue from Whistler, which wasn’t on the company’s books in the previous period, and growth at Perisher resort in Australia.
Lodging revenue also rose by 6.9 percent for the quarter compared with the previous period in 2016.
Katz said through Sunday, Dec. 3, the company’s season pass sales increased 14 percent in units and 20 percent in revenue over the same period in the previous year.
Overall, Vail Resorts expects to sell 740,000 passes for the 2017-18 season.
Katz said the company has seen strong pass sales growth in Northern California and the Pacific Northwest, as well as international markets including Australia, Great Britain and parts of Asia.
Part of the sales growth in the Pacific may be due to good seasonal conditions at Perisher. Katz called the September weather there “some of the best ever.”
Pass holders and others are finding good early conditions at Whistler and at Stowe in Vermont, Katz said. Colorado’s warm autumn has been more challenging.
Responding to a question about Vail’s Back Bowls from Bank of America analyst Sean Kelly, Katz said company officials aren’t terribly concerned yet.
“There’s plenty of time for us to get more natural snow (before Christmas),” Katz said. “We feel comfortable, we’ve been here before, but that’s the one thing we can’t control.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org and @scottnmiller.
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