Are you holding off on buying your pass?

[Pequenita]

this Ikon deal seems reasonable, the clincher for me is if they close during the season. Am I reading the details correctly if you use the pass and then they have to close Steamboat I get a partial refund? If that's the case, I'm in. Dont forget you can still do a portion down and pay at no interest.

That's how I'm reading it, and I think it's to match the Vail product. I don't have the info in front of me, so it could be credit vs. refund.

My earlier frustration with Ikon was that if you only use your pass at one Alterra resort local to you, for 10 days in December, and then your local resort closed on January 15 for the rest of the season, but another Alterra resort in another state remained open, Ikon was going to say "Sorry, bud, you could have chosen by December 10 to defer your credit to next year or you could have gone skiing at this other resort that was open all season." And sure, you would have paid for your pass in ski days in December, but you didn't buy a pass that was valid until January 15; you bought a pass valid through the ski season. When it comes to closures, the multi-resort pass is not great for consumers.

I'll hop off my soapbox now.

 

[BTaylor]

I'm surprised. As of September 20, Epic Pass sales for the upcoming ski season are running 18% AHEAD of last year's Pass purchases.

From today's The Colorado Sun: "...skiers are buying the company’s Epic Pass for the coming season. Pass sales are up 18% compared to the prior year through Sept. 20. Revenue from pass sales is down 4%, though, as a result of credits to skiers whose season was cut short. Without deducting those credits, pass sales revenue through Sept. 20 would be up 24% compared to last year."

Coronavirus has cost Vail Resorts more than $200 million. So far.

Vail Resorts lost $203 million in ski and lodging earnings in the fiscal year that ended in July, a rare downturn for the ski resort operator hit hard by the COVID-19 pandemic. The company reported $503.3 million in resort earnings for its fiscal 2020, a 29% decline from the previous year. The...

coloradosun.com

 

[Tricia]

I'm surprised. As of September 20, Epic Pass sales for the upcoming ski season are running 18% AHEAD of last year's Pass purchases.

From today's The Colorado Sun: "...skiers are buying the company’s Epic Pass for the coming season. Pass sales are up 18% compared to the prior year through Sept. 20. Revenue from pass sales is down 4%, though, as a result of credits to skiers whose season was cut short. Without deducting those credits, pass sales revenue through Sept. 20 would be up 24% compared to last year."

Coronavirus has cost Vail Resorts more than $200 million. So far.

Vail Resorts lost $203 million in ski and lodging earnings in the fiscal year that ended in July, a rare downturn for the ski resort operator hit hard by the COVID-19 pandemic. The company reported $503.3 million in resort earnings for its fiscal 2020, a 29% decline from the previous year. The...

coloradosun.com

That's interesting.
Based on recent correspondence with a media relations person at VR I wouldn't have guessed that.

 

[dovski]

That's interesting.
Based on recent correspondence with a media relations person at VR I wouldn't have guessed that.

I think the combination of credits, discounts, the ability to defer a seasons and Covid insurance of sorts all combined with the fact that having an Epic pass may guarantee you ski days at resorts that are going to reservation only is likely driving some of this. Simply put if you want to be able book a ski vacation and ensure you get access to the hill during that vacation you need to buy a pass.

 

[Andy Mink]

I wonder if

I think the combination of credits, discounts, the ability to defer a seasons and Covid insurance of sorts all combined with the fact that having an Epic pass may guarantee you ski days at resorts that are going to reservation only is likely driving some of this. Simply put if you want to be able book a ski vacation and ensure you get access to the hill during that vacation you need to buy a pass.

I wonder if people being able to work remotely is driving any pass sales. I know folks from the Bay Area are spending more time at Tahoe. That would be N*, Heavenly, and Kirkwood in that area.

 

[raytseng]

It's judgement day and a referendum on 10years of epicpass retention business development.
You've got to choose now either if you're in, or your locked out. Before you could always put it off and say I'll pay for window tickets (if the price is right) or walk away to a different resort and I have choices and dignity as a valued ski patron.
Now vail is confirming its a sellers market and their product is what a million skiers want, even if they put restrictions on it.

I don't think the bayarea people working remotely materially is the cause for the good numbers. Since the breakeven for tahoe value pass is so low around 4 to 5days, the people who can afford skiing as a leisure activity would have already been passholders after the "2 weekend trips a season" threshold gets crossed.
The migration to the tahoe area I suspect they must have been passholders already. I don't see people who are casual dayticket skiers as the ones who have suddenly decided to move to a mtn town. Maybe a few, but not 18,000 new passholders. And northstar that's so dependent on castlepeak parking and a gondola, its going to be a likely disaster there, so really its just south lake as a draw.

So I'd weight most of the gain just on the most straightforward capacity limits means no more window tickets, so you need to be a passholder somewhere to give best chance at access, take it or leave it

 

[fatbob]

Wonder if the later deadline for full discount with Epic and lack of clarity over Ikon's reservation policy ( plus the shaft from places like JH) encouraged a fair number of Ikon defectors.

I'm still surprised at numbers going up as they must have made almost no international sales. Maybe Vancouverites have piled in on Whistler knowing they'll have a largely tourist free resort this year.

 

[Seldomski]

After convincing myself I wasn't going to go skiing this season, we got epic passes at the last moment (for credit from last year). I found myself struggling to determine another vacation venue that would be as fun and enjoyable with social distancing being standard. We'll miss après ski part, but we can't enjoy similar experiences like that at home anyway now, so... With work from home becoming normal and vaccine distribution likely not happening until May 2021, we are thinking it will be 'acceptable' to simply work from the mountains a week or two and sneak in skiing where we can.

Normally we would travel to ski with some friends or the ski club. Ski club is no go this season. We'll limit number of friends we travel with or meet at the resort.

If we return to work as normal during ski season, then we could probably also have a normal ski season, so it's win-win?

 

[jmeb]

A lot more here in the "Season Pass" section about what may be driving the changes, straight from Vail:

Vail Resorts Reports Fiscal 2020 Fourth Quarter and Full Year Results and Provides Preliminary Season Pass Sales Results | Vail Resorts, Inc.

The Investor Relations website contains information about Vail Resorts, Inc.'s business for stockholders, potential investors, and financial analysts.

investors.vailresorts.com

 

[dovski]

A lot more here in the "Season Pass" section about what may be driving the changes, straight from Vail:

Vail Resorts Reports Fiscal 2020 Fourth Quarter and Full Year Results and Provides Preliminary Season Pass Sales Results | Vail Resorts, Inc.

The Investor Relations website contains information about Vail Resorts, Inc.'s business for stockholders, potential investors, and financial analysts.

investors.vailresorts.com

What is interesting about this is that it confirms what we likely already knew, while Vail owns and operates ski resorts they do not actually make their $$ off skiing. Real estate, retail and hospitality are the real income drivers. For all intents and purposes Vail could give away passes and in a good year still turn a massive profit from all the other things they offer. The lack of tourism and people traveling to Vail resorts for vacations is the real impact of covid, not the lack of skiers or Epic pass sales. Will be interesting to see how this year plays out with all the restrictions in place.

 

[dbostedo]

What is interesting about this is that it confirms what we likely already knew, while Vail owns and operates ski resorts they do not actually make their $$ off skiing. Real estate, retail and hospitality are the real income drivers. For all intents and purposes Vail could give away passes and in a good year still turn a massive profit from all the other things they offer. The lack of tourism and people traveling to Vail resorts for vacations is the real impact of covid, not the lack of skiers or Epic pass sales. Will be interesting to see how this year plays out with all the restrictions in place.

How so? Looking at this revenue table:



It seems to show that Lift revenue (I assume passes and lift tickets) are more than 50% of total revenue.

 

[Pat AKA mustski]

I'm surprised. As of September 20, Epic Pass sales for the upcoming ski season are running 18% AHEAD of last year's Pass purchases.

This doesn't surprise me actually. From what I have seen this summer, any outdoor activities have been a huge draw during this pandemic. People feel fairly safe when outside.

So I'd weight most of the gain just on the most straightforward capacity limits means no more window tickets, so you need to be a passholder somewhere to give best chance at access, take it or leave it

Absolutely. As soon as resorts began to announce their plans for limited ticket sales, no walk up sales, and possible reservations, anyone still on the fence made the jump to a pass. Our decision was never pass or no pass; it was always how many and which passes. I want to ski.

 

[dovski]

How so? Looking at this revenue table:

View attachment 110968

It seems to show that Lift revenue (I assume passes and lift tickets) are more than 50% of total revenue.

These numbers do not make a ton of sense to me when you compare the 3 month period vs the 12 month. The proportional break down of passes vs other stuff is not consistent. In theory it should be since they are driving most of their lift revenue through pass sales which should be amortized over 12 months.

 

[dbostedo]

These numbers do not make a ton of sense to me when you compare the 3 month period vs the 12 month. The proportional break down of passes vs other stuff is not consistent. In theory it should be since they are driving most of their lift revenue through pass sales which should be amortized over 12 months.

Well the three month period in question would be May, June, and July of this year. So things are bound to be wonky compared to 2019. And that probably makes them weird in terms of what percent of the full year (August 2019 though July 2020) they comprise.

As far as amortizing... yeah, I would have expected they'd find a way to amortize pass revenue over the whole year, but apparently they don't. It could be actual revenue when incurred. Although I'm still surprised that only ~3.5% of their lift revenue in the 2019 columns came in May/June/July. I know that's a slow time, but they have pass sales going on then, and some usage. I wonder if they take all the pass sale revenue in big chunks quarterly and it doesn't show in the 3-month numbers or something?

 

[raytseng]

I didnt look into it deeply but they are taking a charge from the pass credits and not booking this new pass income since it might have to be refunded, so the 3month pass revenue numbers are all wacky and not reflective of the sales

the amortization of the pass revenue, i think theyd have to do that over the days the pass is active, not over full calendar year. So itd be heavily weighted to US ski season.

 

[dbostedo]

One more thing, @dovski ... I just realized that that was the revenue table only for the "Mountain Operations". There is a separate one for "Lodging Operations". It's about $314M in 2019, compared to $1956M in Mountain ops.

 

[ForeverSki]

These numbers do not make a ton of sense to me when you compare the 3 month period vs the 12 month. The proportional break down of passes vs other stuff is not consistent. In theory it should be since they are driving most of their lift revenue through pass sales which should be amortized over 12 months.

I’d expect pass product revenues to be amortized over the year based on historical skier visits. That is, I’d expect revenue to be recognized some in early season, the most in prime season, then some again in late season. As Vail has properties in Australia, I’d expect revenue recognition to take historical skier visits there as well. That would correspond to the principle of revenue reflecting as closely as possible to the true nature of the business. Anyone curious enough to look up their 10Qs & 10Ks?

 

[ForeverSki]

My guess is not too far off from the mark. Here’s MTN’s latest 10K filing: “The Company records deferred revenue primarily related to the sale of pass products. Deferred revenue is generally recognized throughout the ski season as the Company’s performance obligations are satisfied as control of the service (e.g. access to ski areas throughout the ski season) is transferred to the customer. Transfer of control is based on an estimated number of pass product holder visits relative to total expected visits. Total expected visits are estimated based on historical data, and the Company believes this estimate provides a faithful depiction of its customers’ pass product usage. When sufficient historical data to determine usage patterns is not available, such as in the case of new product offerings, deferred revenue is recognized on a straight-line basis throughout the ski season until sufficient historical usage patterns are available.”

 

[dbostedo]

My guess is not too far off from the mark. Here’s MTN’s latest 10K filing: “The Company records deferred revenue primarily related to the sale of pass products. Deferred revenue is generally recognized throughout the ski season as the Company’s performance obligations are satisfied as control of the service (e.g. access to ski areas throughout the ski season) is transferred to the customer. Transfer of control is based on an estimated number of pass product holder visits relative to total expected visits. Total expected visits are estimated based on historical data, and the Company believes this estimate provides a faithful depiction of its customers’ pass product usage. When sufficient historical data to determine usage patterns is not available, such as in the case of new product offerings, deferred revenue is recognized on a straight-line basis throughout the ski season until sufficient historical usage patterns are available.”

So they amortize based on usage of the passes.... which would be very low during the 3 month period in question, even accounting for southern hemisphere passes.

 

[raytseng]

small correction

What is interesting about this is that it matches what they have in their investor presentations for the last 10 years.

For me the bigger confirmation on the pass units, is more that the pandemic didn't fully explode the economy (yet) or at least touch the finances of the ski-set crowd. Those that can afford skiing as a a leisure activity still can afford to buy epicpasses and plan to go skiing and this crowd isn't all on Unemployment or Furlough.

They way they have the delayed pass purchase and pass installment plan marketting to the common man; I had in my mind those financing options are featured because there's a core number of skibums/gig economy workers /vanlifers that have to scrape together their pennies together all summer long to be able afford their skipasses and are eating their ketchup soup saltine crackers for lunch; who should decide to skip 2020 because it's too financially risky and has so many new pass restrictions and save their pennies.
But turns out that really isn't the case, and most if not all skipeople are well off, and can still quickly find the $600-$1000 in their couches.