Colorado Vail Resorts Reports Record Decline in First Four Months of Year

[Mike King]

from the Colorado Sun.

Vail Resorts lost $140 million after coronavirus forced its ski areas to close. That’s actually better than expected.

Cost cutting by Vail Resorts after it closed its 34 North American ski areas on March 14 lessened the financial blow of the coronavirus. Slashing plans for capital upgrades, suspending cash dividends to shareholders, reducing salaries and furloughing hourly workers helped Vail Resorts lose only...

coloradosun.com

 

[Wilhelmson]

Its worth listening to the earnings call q&a

 

[Ken_R]

They still made $152.2 million NET over the third quarter ...

While the people that work for them to make that happen got screwed...
Mod edit

 

[Tricia]

We're hearing more rumblings about some massive cutbacks at all of Vail Resorts. Stay tuned.

 

[Ken_R]

We're hearing more rumblings about some massive cutbacks at all of Vail Resorts. Stay tuned.

Yep. even though I dont like what they are doing being a publicly traded company Vail top execs and board members have a fiduciary duty to shareholders to maximize both profits and investors returns.
Mod edit

 

[Mike King]

Yep. even though I dont like what they are doing being a publicly traded company Vail top execs and board members have a fiduciary duty to shareholders to maximize both profits and investors returns.

Well, VR also generally has quarters where it operates at a loss. They have a ton of debt. They have to pay all of their employees as well as paying back the folk who lent them money to do things like build lifts, lodges, improve hotels, provide transport to their destinations, etc. for all of the evils you might ascribe to VR, they’ve also provided huge benefits. The cost of passes is far less than it was 25 years ago and you can ski on that pass at many more mountains. Facilities have greatly expanded. Think that would’ve happened if the government made all of the decisions? Look at the state of our national parks if you think so.

Capitalism is a way of aggregating the preferences of individuals to allocate resources to their highest and most valued use. It encourages innovation. , which is certainly what Vail has done. Are there excesses of capitalism? Sure, but it has proven to be preferable to its alternatives.

 

[Tricia]

The story from Summit Daily a few days ago has a broader view of the ski industry overall.

Ski industry lost $2 billion because of COVID-19 pandemic, trade group reports

ASPEN — The U.S. ski industry lost at least $2 billion last winter because of the economic collapse from the COVID-19 crisis, a national trade association announced Wednesday. The Denver-based National Ski Areas Association said...

www.summitdaily.com

One of the things we talked about in a discussion around the dinner table a few nights ago is that, even though the ski industry lost money from lack of traffic, the ski resorts also didn't have to lay out money for operating expenses, (with the exception of salaried employees).
I don't see a big impact on resort operations taking a hit as much as retail. See Pugski's article here

Exclusive: - Where Ski Retail Is Headed in the New Normal

Retailers are heading into this next season with a tremendous amount of uncertainty. Covid-19 has changed everything in our life, our livelihood, our passion ... aka the ski industry. There will be a new normal, but it will be far from any...

www.pugski.com

 

[Wasatchman]

Will be interesting. Ski areas may not have been hit as hard as retailers, but I am sure there was plenty of pain. Operating a seasonal business dependent on the whims of mother nature is hard enough, but then to lose part of it to the virus hurts. Those multi-pass products from Vail/Alterra assume a chunk of money being generated in food, beverage, lodging, ancillary services which suffered greatly. The horrors, it is so tough Vail shareholders not getting a dividend for the foreseeable future. So it's plenty tough, but yeah, the poor retailers in particular took it on the chin.

If there is a silver lining, perhaps it is that it will slow down the Vail/Alterra machine from completely taking over the industry. And struggling local hills may get a boost as people ski closer to home.

 

[Ski&ride]

One of the things we talked about in a discussion around the dinner table a few nights ago is that, even though the ski industry lost money from lack of traffic, the ski resorts also didn't have to lay out money for operating expenses, (with the exception of salaried employees).

Yep!

My condominium came out ahead the last 3 months. Several big savings due to thing being closed down. Subtract the extra expense of buying masks for its workers, installing Plexiglas on several key locations, extra cleaning supplies. It‘s a net saving!

My Mom’s condo also came out ahead. A good 1/3 of its residents decamped to their second homes, or moved to the suburb staying with relatives. Electricity use was way down, garbage volume down (included in common charges). Again, despite the additional cost of cleaning supplies, there’s a surplus. So all staffs (porters, doormen, security) now gets complimentary lunch, and subsidy on their commute cost.

 

[Tricia]

garbage volume down

Funny you should say that, becuase we were stuck at home and started doing home improvement projects we were killing our recycle and trash can capacity in a day or two after pick up.
Two weeks ago we were allowed to set extra bags out for the first time in a few months, and we had 8 bags of additional yard waste to put out.
And recycle stuff.... between the box the front door came in, and plant containers, and booze bottles and, and and and....
We had full recycle bins far quicker than the recycle was picked up.

 

[Quandary]

They still made $152.2 million NET over the third quarter ...

While the people that work for them to make that happen got screwed... Capitalism at its best.

It is likely many if not most were seasonal employees who would move on after ski season in any event, the full timers were likely furloughed, receive unemployment and the extra $600/wk. Many of whom may very well be better off financially not working.
Mod edit

 

[mikel]

This one paragraph from the SD has prompted some spirited discussion around the fire pit (unfortunately no fire in the pit).

"It’s unknown how the pandemic will affect the 2020-21 season. Arapahoe Basin Ski Area reopened May 27 with permission from Gov. Jared Polis. It was the only ski area in Colorado to do so. Polis said skiing is relatively safe during the pandemic because physical distancing is easy to maintain."

Since this thread is about lost revenue I won't side track it by breaking down each sentence. I will say this. General belief is the last sentence must only be Gov. Polis personal feelings. There was opportunity for A Basin to not be the only place to reopen but requests were denied.

 

[Tricia]

Moderator note:
There have been a few socialism and capitalism flags being waved which seemed to be creating some undertones that can take us down a rabbit hole.

Please leave out such lables and keep this topic civil.

 

[Wilhelmson]

Some larger employers had to reduce staff hours in order to qualify for government programs, so in general its not safe to assume that a business is out to make a buck at the expense of employees.

Without thinking i cut my hair with a #1 buzzer. Client already said he hopes its not a health issue. Hopefully no one assumes worse.

 

[Ken_R]

from the Colorado Sun.

Vail Resorts lost $140 million after coronavirus forced its ski areas to close. That’s actually better than expected.

Cost cutting by Vail Resorts after it closed its 34 North American ski areas on March 14 lessened the financial blow of the coronavirus. Slashing plans for capital upgrades, suspending cash dividends to shareholders, reducing salaries and furloughing hourly workers helped Vail Resorts lose only...

coloradosun.com

Part of a general industry trend even before covid.

 

[Tim Hodgson]

Consider this contrasting observation from the jet skiing industry, from this post (names removed):

"I will say this, not in their (a competitor retail company) defense, but just so you know.... We have been crazy busy. I have done more business in the 2nd quarter this year than I have in years past for the WHOLE year. I am having troubles keeping items on the shelves, and lead times on incoming parts have been slow. I try very hard to communicate, but I will say I too have not been perfect. (Hard to make out going calls, when my phone rings constantly all day long.)

Trust me, it is a great thing to be so busy, but it is overwhelming, and difficult. "

Another post: "(Other company) is in the same boat. He's slow at responding because he's swamped. I guess a lot of people have time to work on their skis now."

Try to find a vintage stand up or sit down jet ski on craigslist and you will be surprized that there aren't many and the prices for the ones you find will be astronomically high.

IMHO, there is a pent up demand for outdoor physical activity. So, much so that IMHO this coming ski season could be one of the busiest.

I have no info from my employer, this is just me speculating based upon my view of what is happening as the Covid shutdowns are lifted or ignored.

If there is a silver lining, perhaps it is that it will slow down the Vail/Alterra machine from completely taking over the industry. And struggling local hills may get a boost as people ski closer to home.

Wasatchman, just my perspective. I have 23 seasons working as an part-time instructor at a small Tahoe Area ski resort. I remember one re-hire orientation meeting before Vail bought us where the CEO started the meeting by saying "Well the good news is that we are not declaring bankruptcy." EVERYTHING has improved at our resort since Vail bought us.

I believe that Vail is more likely to SAVE more small resorts like Vail saved ours than to hurt small resorts. Rob Katz' invention of the multi-resort pass is just one example of a ski-industry saving invention by Vail. No?

I am a glass half-full kinda guy. . . who is actively helping to fill the remainder.

 

[Mike King]

@Ken_R that cheddar piece doesn't describe Vail, Alterra, or Aspen. We were on track for one of our busiest seasons ever prior to the Pandemic.

 

[Ken_R]

@Ken_R that cheddar piece doesn't describe Vail, Alterra, or Aspen. We were on track for one of our busiest seasons ever prior to the Pandemic.

Thats what I was thinking from what I observed here in Colorado this past season and the 3-4 prior. VERY busy.

 

[David Chaus]

Also VERY busy at Crystal Mt.

Recall that Crystal decided to stop walk-up ticket sales on weekends and holidays, and stopped vehicles from driving up the 6 miles of Crystal Mt Blvd from Hwy 410, all due to parking lots being full. You could still buy day tickets in advance online. All of this the first season of Crystal being on the Ikon Pass (unlimited access).

Stevens, too, VERY busy, with full parking lots on weekends and requiring overflow parking a mile down the highway with shuttles back and forth. When that lot got full, the Cross-Country lot 5 miles down the highway was used.

OTOH during the weekdays..... crickets. Plenty of parking available very close to lifts, no lifts lines, feels empty.