Vail Resorts sees profits rise
Summit County correspondent
Aspen, CO Colorado
BROOMFIELD – Strong season pass sales, high real estate revenues and increased skier visits in Colorado propelled Vail Resorts to a solid second quarter, according to financial results released by the ski resort operator on Monday.
Vail Resorts, which owns Breckenridge, Keystone, Vail, Beaver Creek and Heavenly mountains, reported a 23-percent jump in net income – from $43.01 million to $53.02 million – for the second quarter, which ended on Jan. 31.
“We are very pleased with our strong performance in the second quarter, which clearly exceeded our expectations,” Vail Resorts chief executive officer Rob Katz said in a prepared statement.
Mountain revenue increased $25.8 million, or 10.5 percent, compared with the same quarter last year due in part to a 13.4-percent increase in lift revenues. Season pass sales were up 20 percent over 2006, despite a decrease in season pass skier visits because of harsh weather conditions in the Denver Metro area and sparse snowfall at Heavenly in California.
Overall, skier visits were up 1.3 percent in the second quarter, or 4.8 percent at the company’s four Colorado resorts, depicting an increase in destination skiers, Katz said.
Skier numbers at Keystone realized the biggest increase during the quarter, jumping 9.3 percent over the same quarter last year.
Katz credited Keystone’s success to investments in snowmaking and the hiring of chief operating officer Pat Campbell last year.
That success could translate into future real estate projects at the resort, Katz said during a Monday morning conference call regarding second quarter earnings.
“We are looking at a number of opportunities on the real estate side and I think certainly as time moves on we’ll be chatting about that with everyone,” he said.
For now, the company is planning on an expansion of the spa at the Keystone Lodge in which it will double the number of treatment rooms available and add locker rooms, a nail studio and a relaxation room, said Keystone spokesperson Amy Kemp.
That project is slated to be finished by the start of next ski season.
Also, negotiations are continuing for the proposed Marriott Grand Residences in the Hunki Dori parking lot, Kemp said.
Vail Resorts’ real estate segment significantly contributed to its second-quarter bottom line with $56.2 million in revenue compared with $9.7 million over the same period last year.
Sales of 18 Mountain Thunder townhomes in Breckenridge and eight Gore Creek Place units in Vail’s Lionshead Village contributed to those figures, said Jeff Jones, Vail Resorts’ chief financial officer.
Numerous real estate projects are ongoing at Vail Mountain and Breckenridge, including sales on the Crystal Peak Lodge condominiums, the first phase of the Peak 7 redevelopment.
Since Vail Resorts began selling the high-end units last December, the company has secured contracts for 41 of the 46 units at an average price of $958 per square foot. That’s double the average price for the Mountain Thunder townhomes in Breckenridge two years ago, Katz said.
Along the same lines, Vail Resorts closed on the $9.87 million sale of a 5.5-acre chunk of land at Peak 7 last December to Grand Timber Development Company for its planned high-end fractional ownership property at the new Peak 7 base.
Grand Timber partner Rob Millisor said his group plans to break ground on the first phase of the five-phase project on May 1. The 114, two-bedroom, lock-off timeshare units will sell for $20,000 to $150,000 per week depending on the season, Millisor said.
Vail Resorts has also entered into sales agreements for all 13 units of The Lodge at Vail Chalets at an average prices of $2,488 per square foot, and has sold 88 full memberships to the exclusive Vail Mountain Club – each with a $250,000 deposit – and 77 social memberships with a $100,000 deposit.
In the resort’s lodging segment, revenue increased by $700,000, or 2.2 percent, and resort revenue – a combination of the mountain and lodging segments – increased 9.5 percent in the second quarter.
During the morning conference call, Katz announced several capital projects that will move forward, including replacing snocats and rental equipment, issuing new uniforms at all five mountains, building a new gondola and ski school facility at Beaver Creek, replacing Vail’s Chair 10 and 14 with new high-speed lifts and installing a new high-speed lift at Heavenly.
Vail Resorts’ stock was up 3.33 points at the close of Monday’s trading day at 58.33 a share.
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