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Vail Reports Earnings and What it Says About Park City

On Monday, Vail Resorts reported a loss of $70 million in the last quarter of its 2015 Fiscal year. The loss was more than stock analysts expected and the stock dropped 4% in Monday trading. However, its revenues surged 20% to over $162 million during the quarter. In looking historically at the financials, a 4th quarter loss isn’t out of the ordinary, and in fact it was less than the 2014 loss. Vail still says they are on target to meet analyst estimates for the fiscal 2016 year, with earnings in excess of $400 million.

On a conference call, Vail CEO Robert Katz answered a number of questions about the company’s financials. As always it provides a little insight into our local Park City market. Here are a few select questions and answers:

Q: Consumer softening in spending seems to be occurring in lodging. Is Vail seeing this?
A: They are not seeing any softening in the consumer. They had a strong summer. Other parts of the industry struggle with supply side (i.e. too many competitors adding too many hotels), but they say not much supply has been added to mountain resorts in the places they operate.

Q: What sort of mix of local versus destination guests does Vail expect?
A: Last year Utah and Colorado was strong for Vail destination visitors.International customers represent 12%-15% of total destination visitors to resorts. Vail expects much of upcoming Utah market growth based on destination visitors.

Q: What sort of season pass penetration is Vail seeing in Utah?
A: Vail does not provide market specific information. That said, Utah season pass penetration is much less than Colorado, due to maturity of Colorado market. Vail sees potential opportunity to sell more passes in Utah but that potential is not as great as the potential to increase passes in other parts of the world.

Q: What does Vail real estate look like moving forward?
A: Still have a handful of units to sell. Inventory is starting to move. Development land parcels are starting to be sold. Great thing about real estate is that as developers develop land around resorts that enables the resort to add restaurants, retail space, and ticketing options near these new developments.

Q: Will Vail expand the Epic Discovery program to other areas (Epic Discovery is a summer focused program where they use their own land and when applicable rent forest service land in the summer to provide a summer experience for guests. It is not currently in Utah.)?
A: In Utah they are focused on combining the resorts. Once that is completed they will look at other opportunities, that could include Epic Discovery, to bolster revenues.


It’s always interesting to listen the question and answer portion of investor conference calls. While, it is very rah-rah, you do learn little tidbits of information. Here are some of the more interesting things I found:

  • I was interested to see that they haven’t seen consumer softening. That bodes well for the winter season.
  • There was lots of talk of currency rates and the impact of a strong dollar on international visitors to the U.S. Since the dollar is strong, it costs people more to come to the US and therefore they tend to vacation at home instead of come here. Vail acknowledged that this was going to be a challenge. It could also mean that Park City’s international visitors could be down a bit.
  • The talk of plans to expand summer offerings are interesting. I’d guess it will be a couple of years until they feel they have integrated PCMR and Canyons… but then I would expect a huge push for summer here from Vail (not that summer isn’t already trending up in Park city).
  • Their talk of supply in mountain resorts is interesting. Effectively they said that new resorts aren’t being built, so that isn’t putting price pressure on Vail. Yet, I wonder what happens i our market when (if) that Deer Valley Jordanelle expansion starts.
  • Every time I hear Vail’s CEO I’m impressed. It’s like the US Army… they don’t seem to do anything without a plan. It made me think of our transportation issues. I wonder if they consider transportation problems an issue in Park City, and more importantly to them, a threat to their earnings . If so, what is their plan?

If you’d like to listen to the investor conference call, it is available here.


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