Vail Resorts reported a decline in skier visits for the second quarter of 2024 on “challenging conditions” at its North American resorts.
According to Kirsten Lynch, chief executive officer at Vail, the company’s western North American resorts saw approximately 42% lower snowfall through January compared to the same period in the prior year. Vail’s eastern U.S. resorts also experienced limited snow and variable temperatures.
Despite the impacts of the conditions, Vail reported EBITDA for the second quarter increased approximately 8% compared to the prior year, primarily driven by the stability created by its season pass program, Lynch said, during a conference call with investors.
“Given the unfavorable conditions across our North American resorts, we are pleased that our results for the quarter demonstrate the resiliency of our strategic business model and our network of resorts and loyal guests,” she added.
The unfavorable conditions resulted in a nearly 10% decrease in skier visits, leading the company to lower its guidance for 2024.
Mountain Segment
After the Martin Luther King Jr. holiday weekend, difficult conditions persisted until early March at Whistler Blackcomb and Vail’s Tahoe resorts, according to Lynch, and despite improving conditions at Vail’s Rockies and eastern U.S. resorts, visitation did not rebound as quickly as expected.
“We did, however, see during President’s Day weekend, the trend improved,” Lynch said. “Not all the way to our expectations. But the trends did improve over that President’s Day holiday.”
Although the resort saw fewer visitors, total lift revenue increased 1.8%, compared to the same period last year, to $603.5 million for the three months ended January 31, 2024.
That was driven by a rise in North American pass product revenue, which rose 8.3% due to an increase in pass product sales for the 2023/2024 North American ski season compared to the prior year.
Non-pass product lift revenue decreased 13.1% during the quarter, driven by fewer visitors across all regions because of limited natural snow and variable temperatures. Vail’s resorts in the eastern U.S. and Tahoe were hit particularly hard.
The poor weather at the beginning of the North American ski season caused delayed openings for a number of Vail’s resorts. As a result, the company expects to bring in about $14 million in pass product revenue during the three months ending April 30, 2024, that would have otherwise been seen during the previous quarter.
Bright Spots
Lynch added that while visitation declined, Vail’s ancillary businesses performed well, particularly its ski and ride school, dining, and rental businesses, which experienced strong growth in spending per visit compared to the prior year.
“The guests that are coming are still spending money on those ancillary businesses,” Lynch said. “That’s certainly a positive indicator for the business, that even with the challenging snow conditions and lower visitation that our overall EBITDA was up for the quarter.”
Ski school revenue increased $3.2 million, or 2.6%, primarily driven by increased revenue at its resorts in Colorado and Park City, which benefited from an increase in how much each guest spent per visit.
Looking Ahead
For the remainder of the season, Vail is expecting improved performance compared to the season-to-date period, according to Angela Korch, chief financial officer. That includes an expected shift in visitation patterns into March and April.
This is based on Vail’s “significant base” of pre-committed guests and historical behavior patterns, Korch said, and improvement in conditions across Vail’s western and eastern North American resorts.
For spring, conditions are “looking pretty good across the board,” Lynch said. In tracking consumer behavior, a higher percentage of pass holders than last year have not yet used their pass, which suggests a shift in visitation to later in the season.
“We’re making an assumption that at a normal historical level they will still visit whether or not there’s a broader trend going on,” Lynch said. “It’s really hard to say given the season’s not over yet.”
By The Numbers
Net income was $219.3 million for the second fiscal quarter of 2024, up 5.07% compared to the previous year’s quarter.
Season-to-date total skier visits decreased 9.7% and total lift revenue increased 2.6% through March 3, 2024, compared to the prior-year period.
Retail/rental revenue for North American resort and ski area store locations was down 9.3%.
The company updated its guidance for fiscal year 2024 and is now expecting net income to be between $270 million and $325 million.
“I don’t think I can emphasize enough (that) snowfall being down 43% is a significant impact on the ski industry,” Lynch said.
