Vail Resorts, Inc. reported EBITDA improved for the first quarter of fiscal 2023 ended October 31, primarily driven by demand and visitation at its Australian resorts. Pass product sales for the North American ski season increased approximately 6 percent in units and approximately 6 percent in sales dollars through December 5.
Vail Resorts also provided details on its calendar year 2023 capital plan and declared a dividend payable in January 2023.
Net loss attributable to Vail Resorts, Inc. was $137.0 million for the first quarter of fiscal 2023 compared to a net loss attributable to Vail Resorts, Inc. of $139.3 million in the same period in the prior year.
The Resort Reported an EBITDA loss of $96.5 million for the first quarter of fiscal 2023, compared to a Resort Reported EBITDA loss of $108.4 million for the first quarter of fiscal 2022. The increase it said is primarily due to the impact of COVID-19 and related limitations and restrictions on results in the prior year.
Pass product sales through December 5, 2022, for the upcoming 2022/23 North American ski season increased approximately 6 percent in units and approximately 6 percent in sales dollars as compared to the period in the prior year through December 6, 2021. Compared to sales for the 2019/20 North American ski season through December 9, 2019, pass product sales increased approximately 86 percent in units and approximately 53 percent in sales dollars. Pass product sales are adjusted to include pass sales for the recently acquired Seven Springs, Hidden Valley and Laurel Mountain resorts (“Seven Springs Resorts”) in all periods and to eliminate the impact of changes in foreign currency exchange rates by applying current U.S. dollar exchange rates to both current period and prior period sales for Whistler Blackcomb.
The company reaffirmed its guidance for fiscal year 2023 of $321 million to $396 million of net income attributable to Vail Resorts, Inc. and $893 million to $947 million of Resort Reported EBITDA.
The company declared a quarterly cash dividend of $1.91 per share of Vail Resorts common stock payable on January 10, 2023, to shareholders of record as of December 27, 2022.
Commenting on the company’s fiscal 2023 first quarter results, Kirsten Lynch, CEO, said, “Our first fiscal quarter historically operates at a loss, given that our North American and European mountain resorts are generally not open for ski season operations during the period. The quarter’s results are primarily driven by winter operating results from our Australian resorts and our North American resorts’ summer activities, dining, retail/rental and lodging operations, and administrative expenses. We are pleased with our results for the quarter, with Resort Reported EBITDA improving compared to the prior year period primarily driven by the strong demand and visitation at our Australian resorts. Our Australian resorts continued to experience record visitation, driven by strong demand following two years of COVID-19-related disruptions and supported by continued momentum in advance commitment pass product sales following the addition of Hotham and Falls Creek in April 2019. Our North American summer operations continued to recover following the COVID-19 pandemic.”
Moving on to season pass results, Lynch said, “We are pleased with the results of our season pass sales, which continue to demonstrate the strength of the guest experience, our network of mountain resorts, and commitment to continually investing in the guest experience. Pass product sales for the North American ski season increased approximately 6 percent in units and approximately 6 percent in sales dollars through December 5, 2022 as compared to the period in the prior year through December 6, 2021, including sales for the Seven Springs Resorts in both periods, and adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.74 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb sales.
“Our North American season pass program has grown dramatically over the past three years as we have focused on our core strategy of shifting guests from lift tickets into advance commitment to drive stability and long-term value for the business. Season pass units have grown approximately 86 percent in units and approximately 53 percent in sales dollars compared to sales for the 2019/2020 season through December 9, 2019, including sales for the Seven Springs Resorts in both periods and adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.74 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb sales. We expect to have approximately 2.3 million guests in advance commitment products this year, generating over $800 million of revenue and representing over 70 percent of all skier visits committed to our 40 North American and Australian resorts in advance of the season in a non-refundable pass, an increase of over 1.1 million guests in the program from the 2019/2020 season, including all pass products for our North American and Australian resorts.
“For the full pass sales season, the business achieved strong unit growth from renewing pass holders, especially guests in destination and international markets, including strong renewals among those that were new to our pass program last year. Our strongest growth occurred in destination markets, which represent the largest addressable market for conversion of guests into advance commitment and is a particularly attractive guest segment given the higher ancillary attachment. Our Epic Day Pass continues to be our highest growth product segment targeting the large market of lower frequency skiers into advance commitment and particularly destination guests with valuable ancillary spend. Our local markets also grew over the prior year in excess of our expectations and remain a critical foundation for our advanced commitment strategy and are our most developed and highly penetrated markets. Sales of Epic and Epic Local passes are consistent with our expectations and with the trend seen in our September results, with unit sales declining by 12 percent relative to the prior year and increasing 39 percent over the last two years and 55 percent over the last three years. This represents substantial growth in our highest-priced products and among our most penetrated high-frequency skier segment, and we expected this year’s performance as a result of the significant growth after last year’s price reset. We continue to expect that the majority of the future growth in advance commitment will come from the large and attractive addressable market of destination guests, primarily through transitioning lower frequency lift ticket guests into Epic Day Pass products and transitioning guests at our local and regional resorts into advance commitment.
“Pass sales dollars continue to benefit from the 7.5 percent initial price increase and subsequent incremental price increases relative to the 2021/22 season, offset by the mix impact from the growth of new pass holders purchasing Epic Day Pass products. This year, net migration among renewing pass holders is in line with our expectations of a 4 percent decline year-over-year following last year’s positive 10 percent net migration that resulted from pass holders trading up to higher value products with more access following the price reset. We proactively use the breadth of our product line and our data to retain guests in the advance commitment program by offering and, in certain cases, encouraging them to purchase lower-priced products to best suit their needs based on their prior behavior. We are very pleased that over the last three years we have maintained renewal rates among our unlimited pass holders, including Epic, Epic Local and unlimited regional passes, while growing these pass holders by almost 75 percent during that time period.
“As previously announced, we completed a multi-year extension of our pass partnership with Telluride Ski & Golf and are pleased to continue offering Epic Pass, Epic 4-7 Day Pass (with All Resort Access) and Epic Adaptive Pass guests access to Telluride. Starting next winter for the 2023/24 North American ski season, reservations will be required for pass holders skiing or riding at Telluride. Reservations will not be required for pass holders visiting Telluride in the 2022/2023 North American ski season, and more details will be provided in advance of next season.”
Lynch continued, “Heading into the 2022/23 North American ski season, we are pleased with our significant base of committed guests that provide meaningful stability for our company, especially during economic uncertainty. We have strong early season conditions at our resorts in the Rockies and West and typical seasonal variability at our resorts in the East. While our mountain resorts have not yet completed hiring for the winter season, we are on track to have the staff needed to achieve full operation of lifts and mountain terrain and deliver normal operations of important guest experiences such as our restaurants, lodging, ski and ride school, and rental and retail locations. Hiring is still ongoing and a top priority as our mountain resort teams focus on hiring for specific roles and continue hiring to manage staffing needs that occur throughout the season. Looking forward, we are pleased with lodging booking trends for the upcoming season, which are consistent with pre-COVID-19 levels. We are also seeing lodging bookings that indicate visitation patterns may shift this year from the December holiday period into January through April.”
Photo courtesy Telluride