Vail Resorts posts first-quarter loss
December 9, 2008
BROOMFIELD, Colo. ” Advance bookings for Vail Resorts Inc. are down sharply, and the resort operator plans to continue pushing ski vacation discounts to boost business, company executives said Tuesday.
The company posted a wider loss in the first quarter of fiscal 2009, compared with the prior year, when the resort operator benefited from a hefty one-time gain.
But the company is being pummeled by the economic downturn, with advance reservations down 23 percent, executives told investors Tuesday. By comparison, bookings fell just about 5 percent in the ski season after Sept. 11.
“This year will assuredly offer us a challenge,” CEO Rob Katz said Tuesday.
The company’s losses totaled $34.5 million, or 93 cents per share, compared with losses of $24.6 million, or 63 cents per share, a year ago. Vail Resorts noted that a gain of $11.9 million in a contract dispute credit was included in the prior year results.
Quarterly revenue jumped 56 percent to $152.8 million, from $97.9 million in the first quarter of fiscal 2008. Vail Resorts’ revenue was boosted by the timing of real estate transactions during the quarter.
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Analysts surveyed by Thomson Reuters forecast a loss of 83 cents per share on revenue of $138.9 million.
The Broomfield-based company operates four resorts in Colorado ” Breckenridge, Beaver Creek, Keystone, and Vail ” as well as Heavenly Mountain in California.
Katz and CFO Jeff Jones said the resort operator expects to continue pushing discounted vacation packages and season pass sales to revive business. But they said there were no plans to lower general lift ticket prices.
“We’re going to do what we can this year to make it easier for them to come,” Katz said, referring to discounted hotel-and-ski packages Vail Resorts has offered. But Katz added, “What you will not see us do is reduce the lead lift ticket price.”
Katz said season pass sales have improved, with about 204,000 sold for $91 million so far this year, compared with 173,000 passes for $70.5 million at this time last year.
He said the company has closed on 42 of 45 units in a Breckenridge real estate project and received final deposits on 384 reserved memberships in its new Vail Mountain Club.
Last week, the company announced it would lay off about 50 workers and eliminate nearly 100 vacant positions because of the downturn.
“If we have less people in a restaurant, we need less people to bus tables, less people to serve,” Jones told investors.
Executives said the resort operator would weather the downturn, and that heavy Colorado snows in the last couple weeks have helped business. But they left investors with no doubt Vail Resorts is taking a beating from the recession, and they couldn’t predict when things would improve.
“We’re looking at an overall economic picture that’s as volatile as anyone’s ever seen,” Jones said.
Vail Resorts shares were down 6 cents at $22.35 in midday trading.