Vail Resorts to pay first-ever dividend
June 10, 2011
EAGLE COUNTY, Colo. – Vail Resorts shareholders will get a little bonus this quarter: The company’s first-ever dividend. And that piece of good news was just part of a bonanza of good news from the Broomfield-based company.
Despite losing a bit of lodging occupancy in the quarter – due largely to the long gap between spring break and Easter – just about everything was headed in the right direction for the company in the last quarter.
The company saw more skiers, and made more money, in the third quarter of its fiscal year – February through the end of April.
While Beaver Creek actually lost some skier visits – about 27,000 – that was more than made up for at Vail, which posted a new record 1.75 million skier visits, a 150,000-visit jump over the previous season. In all, Vail Resorts Colorado resorts saw a 4 percent increase in skier visits. Other resorts in the Rocky Mountain region posted average gains of 1 percent.
Vail Resorts CEO Rob Katz attributed the gains at Vail to improvements to the base villages and a new lift in the Back Bowls.
“Vail Mountain has once again set the standard for all mountain resorts and guests are clearly showing their approval,” Katz wrote in a statement.
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In a mid-day interview on CNBC, Katz added that the company’s efforts to provide guests with great experiences are paying off, too. The report notes that Vail Resorts earned its best-ever guest satisfaction survey scores in the recently-ended season.
The fact that guests seem to be having a good time, and are willing to put some extras into their vacations was reflected in the earnings statement’s report on “ancillary revenue” – ski school, dining and other additional sales resulted in more spending per visitor.
The company’s pass and lift ticket pricing strategies also resulted in an 8.3 percent increase in the company’s “effective ticket price,” the amount people paid to get on the hills. Even while that number rose, season passes, including the price-leader Epic Pass, now account for 35 percent of the company’s lift ticket revenue.
While great snow in the Rockies is widely credited with putting more skiers on more mountains this past season, Katz said the snow was something of a mixed bag, helping drive visits in some weeks and hampering access to the mountains in others.
While mountain operations, lodging and other sales grew significantly in the third quarter, real estate sales are returning more slowly.
While Katz pointed to four completed sales at the Ritz Carlton Residences and three closings at One Ski Hill Place in Breckenridge, the company’s inventory of “real estate held for sale and investment” decreased by more than $150 million from April of 2010 to the end of April this year.
Still, Katz said, real estate is still “an opportunity moving forward” for the company.
“We’re looking for the right mix,” he said.
Katz added that with the company in a good position with its debt load, Vail Resorts is also looking for acquisitions and partnerships.
“We only want to do the things that make sense,” Katz said, using Northstar at Tahoe as an example. Vail Resorts took control of that resort last year, just after it had posted record results the season before.
While Thursday’s earnings call was mostly a review of the company’s performance, Katz said the company is looking closely at spring sales of 2011-2012 season passes, as well as summer bookings to see what direction the travel economy might be headed.
He also said that the company is working on changes to its Epic Mix program, which became a social-media hit last season. While he didn’t go into details, Katz said those changes will “move the bar” on what social media can do for a resort company.