Vail Resorts’ move to cut prices on its annual passes for the upcoming season has gone better than expected, the company reported on a recent earnings conference call.
Vail executives discussed the pass sales strategy and sales trends on the call, which we are catching up on.
This summer, the company cut prices on all of its annual passes by 20%. As a result, season pass sales in North America rose 42% in units and 17% in dollars compared to the same period last year.
The price cut attracted both new customers and led existing customers to trade up to more expensive passes.
“We saw strong unit growth from renewing pass holders and significantly stronger unit growth from new pass holders, which includes guests in our database who previously purchased lift tickets or passes, but did not buy a pass or a lift ticket in the previous season, as well as guests who are completely new to our database,” said incoming CEO Kirsten Lynch.
The overarching strategy of the price cut was to bring more people into the pass program to help the company achieve its long term goal of having 75% of revenue come from advance sales, Lynch said.
Like many other resort companies, Vail experienced pretty healthy demand last year when it came to skier and rider visits. U.S. visitations to its ski areas declined only 6% vs. 2019, the company said, with particular strength in Utah and Colorado.
The company’s Whistler Blackcomb Resort in Canada resort was hit hard by the Canadian border closure, with visits to resort down 51% for the year.
While skier visits held up in the U.S., other lines of business such as retail, ski school and food and beverage were negatively impacted because of COVID restrictions, which reduced capacity.
For example, dining revenue declined 44% for the year, while retail/rental revenue fell 15.7%.
Vail Resorts is expecting those businesses to bounce back this year as capacity limits ease and as it eliminates its advance reservation system.
The company, however, is putting certain rules in place to keep people safe and to allow it to return to normal operations including:
- Masks will be required inside but not outside or in lift lines.
- The company is requiring proof of vaccination for customers 12 and older to eat inside.
- Employees are also required to be vaccinated.
“At this point, we are planning to have full capacity at our resorts,” CEO Rob Katz said.
Annual Financial Results
Overall, the company said total revenue fell 2.7% to $1.9 billion for the year ended July 31. Net income increased 29.4% to $127.9 million.
Vail Resorts ended the year with $1.2 billion of cash and $613 million of availability on credit facilities.
Vail Resorts, a large snow industry retail customer, operates a wide range of well-known resorts and regional ski areas including Vail, Beaver Creek, Breckenridge, Keystone, Park City, Heavenly, Northstar, Whistler Blackcomb, and Stowe
