Vail Resorts, Inc. financial results continued to be heavily impacted by COVID-19 during its second fiscal quarter ended January 31, but total visitation across the company’s North American destination mountain resorts and regional ski areas were only down approximately 5 percent versus the comparable period last year even as its Whistler Blackcomb property posted a 15 percent decline due to continued Canadian border closures to foreign visitors.
“The strong visitation for the quarter highlights the underlying resiliency of our business, the loyalty of our guests and the strong appeal of skiing in guest’s leisure travel plans,” said company Chairman and CEO Robert Katz. “As we moved past the peak holiday period, constrained by capacity limitations driven by COVID-19 and below-average snow conditions, we saw improved results in January, particularly with lift ticket sales.”
Still, total net revenue decreased 26.0 percent to $684.6 million for the quarter ended January 31.
In the Mountain segment, total lift revenue decreased 11.1 percent to $430.8 million, compared to the prior year, primarily due to limitations and restrictions on Vail’s North American operations as COVID-19 restrictions resulted in a decrease in non-pass visitation. Ski school revenue decreased $46.4 million, or 45.1 percent, dining revenue decreased $43.9 million, or 58.0 percent, and retail/rental revenue decreased $43.6 million, or 32.6 percent, all primarily due to COVID-19-related limitations and restrictions for the company’s North American resorts.
Lodging segment net revenue, excluding payroll cost reimbursements, for the 2021 fiscal second quarter decreased $34.6 million, or 45.8 percent, from the comp period in the prior year, primarily due to the operational restrictions and limitations of its North American lodging properties as a result of COVID-19.
“While visitation trends improved throughout the quarter, our ancillary lines of business continued to be negatively impacted by COVID-19-related capacity constraints and limitations, particularly in food and beverage and ski school,” explained Katz. “We experienced strong results in the quarter from both our local and destination guests with local visitation up slightly compared to the same period in the prior year and destination visitation proving more stable than we expected.” Katz said destination guests, including international visitors, modestly declined, comprising 53 percent of overall U.S. destination mountain resort skier visits, excluding complimentary access, compared to 57 percent of visits in the comp period in the prior year. International visitation was said to have “decreased significantly” due to COVID-19 travel issues.
The situation with foreign guests was quite different at the company’s Whistler Blackcomb resort in Canada. Guests from the U.S. with destination guests, including international visitors, declined to 15 percent of Whistler Blackcomb visits in fiscal Q2, excluding complimentary access, compared to 48 percent in the comparable period in the prior year.
Its season pass unit sales grew 20 percent for the fiscal year 2021, which Katz said created a “strong baseline demand heading into the season across our local and destination audience and will be one of the most important drivers of our performance and relative stability for the season.” For the fiscal 2021 second quarter, 71 percent of visitations came from season pass-holders compared to 59 percent of visitations in the prior-year comp period.
Net income attributable to Vail Resorts was $147.8 million, or $3.62 per diluted share, for the fiscal 2021 second quarter, compared to $206.4 million, or $5.04 per diluted share in the prior-year quarter. Resort reported EBITDA was $276.1 million in the second fiscal quarter, compared to resort reported EBITDA of $378.3 million in the prior-year comparable quarter, primarily due to the negative impact of COVID-19. Resort reported EBITDA margin for the fiscal 2021 second quarter was 40.3 percent compared to the prior-year period of 40.9 percent.
The Mountain segment reported EBITDA decreased $89.5 million, or 24.0 percent, in fiscal Q2, which includes $5.5 million of stock-based compensation expense for the quarter compared to $4.6 million in the prior-year comp period.
Lodging reported EBITDA decreased $12.8 million, or 242.2 percent, for the fiscal second quarter compared to the prior-year quarter, which includes $1.0 million of stock-based compensation expense for the 2021 quarter compared to $0.9 million in the 2021 fiscal Q2 period.
Turning to the company’s season-to-date metrics for the period from the beginning of the 2020/21 ski season through March 7, season-to-date total skier visits were down 8.2 percent compared to the prior-year season-to-date period through March 8, 2020. Season-to-date total lift revenue was down 8.9 percent compared to the prior year’s season-to-date period. Both periods include an allocated portion of season pass revenue for each applicable period. Season-to-date ski school revenues decreased 43.2 percent. Dining revenue decreased 56.9 percent, and resort retail and rental revenue decreased 31.6 percent compared to the prior-year season-to-date period.
Company CFO Michael Barkin said results continued to improve in January and February as Vail Resorts “expanded capacity with more open terrain as conditions improved and have certain COVID-19-related restrictions eased.”
Looking ahead, Barkin said the company expects net income attributable to Vail Resorts to be between $204 million and $247 million for the 9 months ending April 30. Resort Reported EBITDA is expected to be between $560 million and $600 million, assuming current regulations, health and safety precautions and the levels of demand and normal conditions persist through the spring, consistent with current levels. He did not provide full-year guidance for fiscal 2021 and as it continues to evaluate the potential economic and operational impacts of COVID-19 on fiscal 2021 fourth-quarter results, particularly for its three resorts in Australia and their primary summer operations in North America, which they currently anticipate opening around its normal opening dates with certain capacity constraints associated with COVID-19.
Katz closed his prepared remarks on the conference call with analysts by outlining an approximately $5 million increase in Vail’s core capital plan based on its updated outlook and expectations to invest approximately $115 million to $120 million, excluding one-time items associated with the integration of $5 million and $12 million of reimbursable investments in real estate-related capital.
“As previously announced, the calendar year 2021 capital plan includes several signature investments which were previously deferred from the calendar year 2020 as a result of COVID-19 and are subject to regulatory approvals,” Katz said. “In Colorado, we are moving forward with the 250-acre lift-served terrain expansion in the signature McCoy park area of Beaver Creek, further differentiating the resort’s high-end family-focused experience. We also plan to add a new four-person high-speed lift at Breckenridge to serve the popular Peak 7, replace the Peru lift at Keystone with a six-person high-speed chairlift and replace the Peachtree lift at Crested Butte with a new three-person fixed-grip lift. At Okemo, we plan to complete a transformational investment, including upgrading the Quantum lift from a four-person to a six-person high-speed chair lift and relocating the existing four-person Quantum lift to replace the Green Ridge three-person fixed-grip chairlift. These investments will greatly improve uphill capacity, further, enhance the guest experience and complete our $35 million capital plan for Triple Peaks.”
Photo courtesy Vail Resorts
