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Wasatchman

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I remember suprisingly reading from the previous filing, they lose money when the very early season snowfall is up, as they then need to open up rather then staying "closed due to conditions", (i.e. the "money hold"). Obviously, this shows the ratio btwn passholders and daypass varies within the season. Of course, if they aren't aubstantially open and have a good product by holidays, it goes the other way. So a fine line to max profits.

Interesting point. But I don't think that factor is at play here, because Vail said the holiday period was "in-line" with expectations. Given the snow, the additional business during the holidays should have more than picked up for the cost shortfall early season by opening early - at least historically. We're off to a decent start with snow, and yet Vail is already lowering the full year outlook. Lowering the full year earnings outlook despite the snow suggests it's not early season costs related to snow.

Vail's argument that last year's poor conditions kept people away early season does have some merit, but I still can't help but wonder if there are other factors at work here such as additional competition from IKON pass and perhaps slowing economy?

I am enjoying the discussion.
 

Plai

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The 2018 stock market was depressing, that may factor in as well as a foreboding about the future.
+1 and the slowing economy.

I see a lot of younger aren't as happy as a year before. The older are more set and are ready to ride this out in style.
 
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Wasatchman

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How come you think that partner resorts will drop out of the Ikon Pass for next season? I'm not questioning this idea, I'm genuinely curious about why you believe that this could happen.

Pure speculation on my part. AltaBird was partnered with IKON before it was announced that Alterra purchased Solitude. So I am speculating AltaBird will not want to partner with a direct competitor going forward. Secondly, I don't see financially how IKONcan afford to pay for this many partner resorts. But again, speculation on my part as I don't have any inside knowledge leading me to believe this.
 

James

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Probably their computer system doesn't know what's going on. Possibly it's the millenium bug they never fixed.
 

tball

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Missing an earnings forecast, or guidance, is often followed by a higher cost of capital and less access to additional capital, particularly in a non-mainstream industry which ski resort ownership is. It often not only affects the co. that missed but others in the industry, particularly those with similar business plans. That effect is likely here though not certain, although if the stock price retains today’s loss it approaches certainty.

In any event capital raising windows are finite. If it does play out that way and Vail needs capital their source may be asset sales and they would face pressure to underproject and withhold funds for cap. improvements. This is good news if you don’t like Vail, Ikon ot their form of ownership. It opens the door for other types of owners to acquire.
I hope the terrain expansion and lift construction party doesn't come to an end. It's been good times.
 

HardDaysNight

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I don’t think there can be any doubt that the Ikon pass has affected sales of the Epic. If one were visiting Utah for example (as opposed to living in Park City), one would certainly get the Ikon. It seemed to me that the crowds were not as ferocious at PCMR even during the peak days as in seasons past. Hopefully that trend accelerates!
 

RJS

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Pure speculation on my part. AltaBird was partnered with IKON before it was announced that Alterra purchased Solitude. So I am speculating AltaBird will not want to partner with a direct competitor going forward. Secondly, I don't see financially how IKONcan afford to pay for this many partner resorts. But again, speculation on my part as I don't have any inside knowledge leading me to believe this.

That makes sense. I'm curious to know how the partner agreements are structured. If I remember correctly, Sugarbush made it seem like they get very little money from Alterra for being on the pass, the prime benefit for them is the increased exposure of being on the pass. On the total opposite end of the spectrum, for the Epic Pass, Telluride gets money from Vail each time someone visits Telluride on the Epic, and the money is equivalent to a slightly discounted day ticket. Given the reputations of Alta and Snowbird, I would be kind of surprised if their deal was structured like Sugarbush's and not like Telluride's, but who knows?

I don’t think there can be any doubt that the Ikon pass has affected sales of the Epic. If one were visiting Utah for example (as opposed to living in Park City), one would certainly get the Ikon. It seemed to me that the crowds were not as ferocious at PCMR even during the peak days as in seasons past. Hopefully that trend accelerates!

This is why I have been speculating (with no information to back this up) that Vail would love to buy Brighton from Boyne if the opportunity presents itself. They could connect PCMR to Brighton and have a foothold in the Cottonwoods (and easy access for people living in the valley), an even larger mega-resort, and finally, they could claim Brighton's snowfall as the snowfall for the whole PCMR/Brighton mega-resort.
 

cantunamunch

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And another factor may be that the general economy might be weakening. There seems to be some signs that there could be a general economic softening noting a lot of retailers had a ho hum Christmas, soft iphone sales, housing market in some major cities is weakening, etc.

Yep.

The first issue in talking of future pass partnerships should be whether any pass partnership provides a buffer against general economy malaise.
 
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Wasatchman

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This is why I have been speculating (with no information to back this up) that Vail would love to buy Brighton from Boyne if the opportunity presents itself. They could connect PCMR to Brighton and have a foothold in the Cottonwoods (and easy access for people living in the valley), an even larger mega-resort, and finally, they could claim Brighton's snowfall as the snowfall for the whole PCMR/Brighton mega-resort.

Might make even more sense for Alterra to buy Brighton at this point as it is right next to Solitude and it would be relatively easy to combine them. In fact, I know that Royal Street Corporation (owner of Deer Valley/Solitude before being purchased by Alterra) was interested in purchasing Brighton. But I heard a big obstacle was that Och-Ziff (who owned Brighton ) was only interested in selling Brighton as part of all their ski resort assets (which was recently purchased by Boyne).

As you say, it is possible to provide a connection to Park City (although in Alterra's case it would be connected to Deer Valley). This connection has been talked about a lot via the One Wasatch initiative, but doesn't really seem like this has gained all that much traction especially recently. Even as a skier, I am very much against providing a gondola connection between PCMR/Deer Valley and Big Cottonwood Canyon (Brighton/Solitude) for environmental reasons.

And then there is the whole part whether Boyne would ever sell Brighton as a standalone resort (similar to the situation with Och-Ziff). Brighton is one of the crown jewels in Boyne's portfolio, so I'm speculating but it seems like it would be hard to just buy Brighton without having to buy some or all of the other Boyne properties.
 

Lorenzzo

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I hope the terrain expansion and lift construction party doesn't come to an end. It's been good times.
If they can prove it's accretive the question then becomes can and will they retain earnings or sell some of their properties to internally finance the good times, if necessary. It's likely they would. If it can't be proven the good times are accretive they're on thin ice. It probably is accretive if they're currently engaged, they've been under pressure for a while.
 

Mike King

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If they can prove it's accretive the question then becomes can and will they retain earnings or sell some of their properties to internally finance the good times, if necessary. It's likely they would. If it can't be proven the good times are accretive they're on thin ice. It probably is accretive if they're currently engaged, they've been under pressure for a while.
I think that's part of the story, but the bigger ones have to do with the sensitivity of the business to the business cycle and the health of the ski industry overall. If lenders see the business as not likely to achieve a return on and of capital, it's unlikely that they will extend financing that might be used to provide improvements at existing resorts or for acquisition of new resorts. If debt is not available on favorable terms, then the question turns to equity. Equity is more expensive than debt. And if public equity can't be raised, then there will likely be some sort of reorganization -- take the company private, break it up, change strategy, etc. Not there yet, but we will see as the markets change over the next couple of years.
 

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Well, it's not so bad. From the release:

However, despite the good conditions, our destination guest visitation was much lower than anticipated in the pre-holiday period, particularly December 1st through December 21st. We believe this was driven by destination guests' concerns from two prior years of poor pre-holiday conditions at our U.S. resorts and we did not see the pickup in short-term bookings we had expected.........
Katz continued, "Primarily as a result of missing our expectations in the pre-holiday period, we now expect full year Resort Reported EBITDA guidance to be slightly below the low end of the guidance range we issued on September 28, 2018.

http://investors.vailresorts.com/ne...rts-certain-ski-season-metrics-season-date-19
 

LKLA

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It's a good bet they aren't talking about underlying reasons so since they didn't mention it, it's entirely possible.

Reasons are:

1 Alterra - The IKON pass is clearly taking business and will likely do so to an even higher degree next season.

2 Conditions - Subpar conditions for two seasons in a row; one season does not a trend make, two seasons...

3 Value - Vail’s customers are increasingly hesitant to book trips that cost thousands of dollars if they fear sub-par conditions.

4 Reality - Nothing grows forever. Vail has had a great run but it was due for a slow-down / pause.
 

Lorenzzo

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Reasons are:

1 Alterra - The IKON pass is clearly taking business and will likely do so to an even higher degree next season.

2 Conditions - Subpar conditions for two seasons in a row; one season does not a trend make, two seasons...

3 Value - Vail’s customers are increasingly hesitant to book trips that cost thousands of dollars if they fear sub-par conditions.

4 Reality - Nothing grows forever. Vail has had a great run but it was due for a slow-down / pause.
IMO it’s really #4. They were a growth engine.
 

Plai

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Reasons are:

1 Alterra - The IKON pass is clearly taking business and will likely do so to an even higher degree next season.
Does anyone have numbers or like statement from Alterra to support this?
 

LKLA

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Does anyone have numbers or like statement from Alterra to support this?

Why would there be disclosure of numbers or a statement, more so from a private company like Alterra?! That would seem like the last thing Alterra would want to do. Vail's results speak for themselves.
 

fatbob

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1 It might be verging on the political but you guys definitely have an economic storm on its way and spending like a baller might have fallen off personal priority lists
2 There was probably significant pent up demand for a competitive product v Epic among destination skiers. As Ikon scratched that itch switching rates I suspect were high
3 VR probably aren't stitching together as competitive fly-stay-ski packages as some of the the other "peer resorts".

Plus the bad Colorado season hangover of course, once bitten twice shy and all of that. All the Vail properties I skied around Xmas 2017 flat out sucked but I saw no sign of dumped window ticket prices or extra "freebies" to cushion the blow. Maybe they reap what they sow.
 

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