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Vail Resorts’ net income down 67%

2020-21 season pass sales up 18% in units, down 4% in dollars
WB
Demand at Whistler Blackcomb through July fell below owner Vail Resorts' expectations as travel restrictions to Canada remained in place due to COVID-19. FILE PHOTO

In what should come as a surprise to no one in the wider ski industry, Vail Resorts continued to contend with the negative impacts of COVID-19 in its final quarterly report of the fiscal year.

For fiscal 2020, Whistler Blackcomb’s parent company reported a 67-per-cent drop in net income and a 40-per-cent fall in resort reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), from $706.7 million for fiscal 2019 to $503.3 million, due primarily to the pandemic.

“Our results for the full year were negatively impacted by COVID-19 and the resulting closure of our North American destination mountain resorts and regional ski areas beginning on March 15, 2020 for the safety of our guests, employees and resort communities,” said Vail Resorts’ CEO Rob Katz in the press call.

Introducing a new online booking system for passholders this winter, the Colorado-based company has seen its season pass sales through Sept. 18 increase approximately 18 per cent in units while decreasing roughly four per cent in sales dollars, compared to the same period last year. Sales dollars were notably reduced by the deferral of approximately US$118 million of pass product revenue and related deferred costs as a result of the credits offered to 2019-20 North American passholders to encourage renewal for this winter. Without factoring in the redeemed credits, sales dollars increased approximately 24 per cent compared to the same period last year.

Although its U.S. resort communities saw increasing demand from leisure travellers through July, demand at Whistler Blackcomb in the same month was unsurprisingly “below our expectations” with the border to the U.S. and international travel restrictions remaining in place.

"We were pleased with the visitation we saw this summer at our U.S. resort communities from leisure travelers. We believe this speaks to the current preference of travelers for outdoor experiences, locations they are familiar with and, for many, the option to drive to our resorts,” Katz continued. “As we approach the 2020-2021 North American ski season, we are committed to providing a comprehensive on-mountain experience, following our historical practice of opening as many lifts and as much terrain as soon as possible. We will be focused on the guest experience while also prioritizing the health and safety of our guests, employees and resort communities.”

Katz went on to say the company is “focused on disciplined cost management” given the continued declines in visitation anticipated for this ski season.

‘[W]e have continued to actively manage our cost structure, including but not limited to the implementation of cost reductions totaling over $70 million on an annualized basis as compared to our original operating expense expectations for fiscal 2020,” Katz explained.

Vail Resorts said it continues to maintain “significant liquidity” with US$360 million of cash on hand as of Aug. 31, and an additional $593 million available through its U.S. and Whistler Blackcomb revolving credit facilities.

To see the full earnings report, visit investors.vailresorts.com.



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