Vail Resorts revenue tops $1.1 billion
September 30, 2015
BROOMFIELD — The 2015 fiscal year was a good one in the Vail Resorts universe, with increases in revenue, skier visits and more.
Company CEO Rob Katz and company executive vice president and chief financial officer Michael Barkin on Monday hosted a conference call to detail the company's fourth quarter performance and give an overview of the 2015 fiscal year.
That broad overview was impressive, with Katz reporting a 20.9 percent increase in pass revenue and the growth of summer business.
PERISHER BOOSTS PASS SALES
Pass sales continue to be an ever-bigger part of the resort company's revenue picture. Katz said an emphasis on early pass sales has been successful. The company has already sold more than half the passes it expects to move for the coming season.
Destination guests are a big marketing target for pass sales, Katz said. And Australia, home of the company's newest resort, Perisher, will be expected to account for even more of those sales in the future.
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Katz said the old Perisher season pass has become an Epic Pass, meaning those who buy for a season of skiing Down Under will also be able to use their passes at Vail Resorts' U.S. properties, as well as the international resorts the company partners with.
Katz said having that database of pass holders from Perisher gives the company a new group of people to contact, as well as a group that can come to the U.S. and essentially ski for free.
"We're way ahead of where we'd be without that acquisition," Katz said.
That strength is coming despite both a downturn in the Australian economy and a strong dollar, which makes U.S. visits more expensive.
In fact, Katz said, the company's Australian market is more robust than expected. Katz said pass sales have grown by 68 percent despite relatively weak snowfall at the resort.
Visitors from Mexico and other areas of Latin America are also continuing to visit despite currency fluctuations, Katz said.
The strong dollar has had the most impact in the Canadian and British markets, Katz said, adding that guests there may be more price-sensitive when traveling.
UTAH PASS SALES ALSO UP
Katz said Utah is another area of pass-sale growth for the company. For the coming season, Vail Resorts will unveil the results of a $50 million improvement program that has linked Park City Mountain Resort and Canyons Resort, creating the largest single ski area in the United States.
Even the Lake Tahoe area, which has been beset by crippling drought the past two seasons, has shown only "modest" declines, Katz said.
Responding to an analyst's question, Katz said the company's destination business was strong in Colorado and Utah but less so in the Tahoe area. Of that group, international guests account for about 15 percent of the total.
That destination business includes summer guests, a growing part of Vail Resorts' customer base. Katz said the summer Epic Discovery improvements at Vail, Breckenridge and Heavenly (California) will be completed in time for 2016, adding that the company will focus on summer at those resorts for now.
COMING YEAR LOOKS GOOD
Barkin said the company's analysis is predicting more growth for the 2016 fiscal year, due to factors including a stable and growing U.S. economy and normal snowfall. Lodging growth — in terms of both occupancy and rate — will be driven in part by the "lack of new supply" in mountain resorts.
That lack of new supply will probably apply to areas where Vail Resorts does business.
Asked by Barclay's analyst Anthony Powell about real estate, Katz said the company still has a few units left to sell at One Ski Hill Place in Breckenridge and the Ritz Carlton Residences in Vail. The company is having "conversations" about its remaining development parcels, Katz said, adding that from here on, real estate revenue will fund upgrades at existing resorts.
"I don't see (real estate) ever returning to where it was in the last cycle," Katz said.