Despite a terrible start to winter, Vail Resorts is still making plenty of money.
The Denver-based owner of Park City Mountain reported Thursday that its revenue for the quarter ending Jan. 31 rose 58 percent to $235.7 million, compared to $149.2 million for the same period a year earlier.
Revenue from season-pass sales, the addition of Vermont’s venerable Stowe Mountain Resort to its financial ledger and federal corporate tax cuts boosted Vail’s bottom line, even though “historically low snowfall” across the West resulted in a 3.1 percent decline in visitation heading into February.
“Through Jan. 31,” Vail Resorts CEO Rob Katz said in a quarterly filing, “conditions across the western U.S. remained challenging, with season-to-date snowfall in Vail, Beaver Creek and Park City at the lowest levels recorded in over 30 years, while [Lake] Tahoe was more than 50 percent below the 20-year average.”
“Despite these difficult conditions, our results were generally in-line with our performance last year, which we believe reinforces the stability of our business model that is focused on advanced-purchase products, led by our season pass,” he added.
Now in its 10th year, the relatively low cost Epic Pass (next winter’s version will sell for $899) has “changed the landscape of the snow sports industry,” Katz said, “making skiing and snowboarding more accessible than it had ever been before” by giving buyers a choice to explore resorts from different parts of the world.
The pass also has assured the company of revenue upfront, which makes it easier to absorb declines in business when uncontrollable elements — such as limited snow — produce downturns such as this year’s 3.1 percent drop in visitation.
Because of those pass sales, Vail said its total lift revenue through the end of January still rose by $23.7 million, or 6.6 percent, to $382 million. That sum was boosted by visitation to the two newest resorts to join the Vail family — Stowe and Whistler/Blackcomb in British Columbia. International business at Whistler/Blackcomb was particularly brisk, Katz noted.
While ski school revenues held up despite fewer visitors, coming in 2 percent higher than a year ago, other income-producing segments of Vail’s operation did not.
Lodging revenues, primarily at the company’s Colorado resorts, fell 3.4 percent from a year earlier. Income from restaurants dipped by 0.8 percent, while retail sales and rentals dropped 6.3 percent, or almost $8 million.
Congressional passage in December of a federal tax cut bill, however, more than offset those shortfalls and figured prominently in making Vail’s quarter financially successful. Katz said Vail realized a one-time, net tax benefit of $64.6 million from the corporate tax cut, worth about $1.55 per share.
Shareholders will benefit from this revenue surplus. Vail’s board approved a 40 percent increase in the quarterly cash dividend shareholders will receive. It will go up from $1.05 per share to $1.47.
