Vail Resorts Inc. is accelerating construction of its Epic Discovery summer amenities at Heavenly Mountain Resort near Lake Tahoe after another disappointing winter.
The largest operator of ski resorts in North America said June 8 that it expects to invest $17 million on Epic Discovery projects in calendar 2015 after receiving approvals needed for zip line canopy tours, ropes courses, mountain biking trails and other summer amenities at Heavenly. In March, it had estimated its capital spending on Epic Discovery projects would only reach $10 million this year.
The company now plans to start construction on the Heavenly projects this summer in addition to a mountain coaster, canopy tours and summer tubing at its Vail Mountain Resort and various projects at its Breckenridge resort in Colorado. Together the projects are expected to result in approximately $6-to-$8 million of incremental Resort Reported EBITDA in calendar year 2016.
Most of the improvements were made possible in 2011 when Congress approved legislation allowing the U.S. Forest Service to permit certain outdoor recreation uses on lands it leased to winter resort operators.
MTN disclosed its more aggressive spending plans last week in its quarterly earnings report, which revealed the company's Retail/Rental revenue declined $2.7 million, or 3.7 percent, during the fiscal third quarter ended April 30 due primarily to lower sales at stores serving its three resorts in the snow-deprived Lake Tahoe region. The declines more than offset the gain in revenue from the company's acquisition in December 2014 of the Park City Mountain Resort in Utah.
Vail Resorts' Rental/Retail figures reflect results at Specialty Sports Ventures, which operates more than 185 outdoor specialty stores at or within a day's drive of its resorts in Colorado, Utah and the Lake Tahoe region.
Total lift revenue at the company's dozen U.S. ski resorts increased $33.3 million, or 13.2 percent, compared to the year earlier quarter thanks to an $18.3 million, or 21.0 percent, increase in season pass revenue, and a $15.0 million, or 9.1 percent, increase in lift revenue excluding season pass revenue. MTN estimated in March that it would experience a $37 million shortfall at its Tahoe resorts due to unseasonably warm and dry weather.
Despite the challenging conditions experienced in Tahoe throughout the season and in Utah during the fiscal third quarter, MTN this week reaffirmed guidance issued in March that calls for fiscal 2015 EBITDA to grow 27-to-30 percent to $340-to-$350 million.