Vail Resorts gave a window into the financial impact COVID-19 has wrought on the multi-national ski company in its most recently quarterly report.
For the fiscal quarter ending April 30, Whistler Blackcomb’s parent company reported its net revenue fell US$263.9 million, or 27.5 per cent, while net income fell $139.6 million compared to the same period last year.
Ski lift revenue, meanwhile, dropped $152.1 million, or 28.9 per cent, “primarily due to decreased visitation associated with the closure of our North American destination mountain resorts and regional ski areas due to COVID-19,” as well as a deferral of $121 million in pass product revenue.
“Our results for the quarter and for the full 2019/2020 North American ski season were significantly impacted by COVID-19 and the resulting closure of our North American mountain resorts beginning March 15, 2020 for the safety of our guests, employees and resort communities,” said company CEO Rob Katz in the investors call. "In addition, even before the closure and during the first two weeks of March, we experienced a negative change in performance that we believe was due to the impact of COVID-19 on traveler behaviour.”
The company has also offered credits to 2019/20 pass holders to apply toward next season, a move that has drawn some criticism from skiers hopeful they would receive a cash refund. Season pass holders will receive a minimum 20-per-cent credit towards next season, up to a maximum of 80 per cent, dependent on the number of days skied this winter. Credits have also been offered to Epic Day Pass, Edge Card and other “frequency-based” product buyers with unused days remaining. Credits are available until Sept. 7, 2020.
Its new Epic Coverage insurance program will also be in effect for 2020/21 pass holders, which would provide refunds in the event of certain resort closures, including COVID-19, and other personal events, such as injury and job loss.
"We continue to be confident in the long-term prospects of our business model that is built on the loyalty of our guests, the strong lineup of season pass products that provide access to our irreplaceable network of world-class resorts and the sophisticated marketing approach we use to communicate with and attract our guests,” Katz continued.
Among the other measures Vail Resorts took in response to the pandemic are: reducing its capital plan for 2020 by between $80 million to $85 million; furloughing the majority of its U.S. year-round hourly and some salaried staff; instituted a six-month salary reduction for all American salaried employees; eliminated the CEO’s full salary and cash compensation to the board of directors for six months; and suspended its 401(k) match for the same period.
Looking ahead to this summer, Katz noted the company plans to be operational for the North American summer and Australian ski season in late June or early July. Opening dates may vary by resort, and will be dependent on guidance from government and public health officials. Katz went on to say Vail Resorts expects to see lower visitation this summer, but “we are not able to fully assess that impact at this time and will not be issuing [financial] guidance for the fourth quarter or fiscal year,” as it usually would.
“We believe we have developed efficient operating plans to deliver a safe and enjoyable guest experience at our resorts this summer in North America and for the Australian ski season, with the ability to adjust as consumer demand and local guidelines and practices shift.”
To view the full investors report, visit investors.vailresorts.com.