Broomfield, CO – Vail Resorts, Inc. on Monday reported results for the first quarter of fiscal 2014 ended October 31, 2013 that showed a widening financial loss due to the company’s acquisition of ski resorts in Utah and in the Midwest.
Resort Reported EBITDA loss, which includes the company’s Mountain and Lodging segments, was $66.5 million for the first fiscal quarter of 2014 versus a loss of $54.5 million in the same period in the prior year. This includes operating results of Mt. Brighton in Michigan, Afton Alps in Minnesota and Canyons Resort in Utah, ski resorts acquired by the company in fiscal 2013, which generated $7.6 million of negative EBITDA, including $2.7 million of costs related to the resorts’ integration and litigation over the lease to Powdr Corp. of land in Utah upon which the latter operates Park City Mountain Resort. Net loss attributable to Vail Resorts, Inc. was $73.4 million for the first fiscal quarter of 2014 compared to a net loss of $60.6 million in the same period in the prior year.
“Our first fiscal quarter is historically a loss quarter since our mountain resorts are not open for winter ski operations during the period. The quarter is driven primarily by our late summer mountain activities, dining, retail and lodging operations, and administrative expenses for our year-round employees,” explained Rob Katz, the company’s CEO. “Our Resort EBITDA loss for the quarter was consistent with our expectations and was higher than the prior year largely due to expenses from the acquisitions. Mountain net revenue in the quarter advanced 10.4% to $57.3 million, driven by growing summer visitation, resulting retail and rental activity and strong dining revenue as well as the impact of the acquisitions. Our Lodging segment revenue increased $4.7 million, or 9.0%, for the three months ended October 31, 2013 as compared to the same period in the prior year. Lodging revenue growth was partially offset by the negative impact of the government shutdown on Grand Teton Lodge Company that forced the park to close early.”
Katz nevertheless sounded an upbeat tone regarding the new ski and snowboard season in progress.
“Our 2013-2014 ski season is just underway and we are excited about the quality and variety of enhancements we are offering guests this year,” he said. “We look forward to welcoming new and returning skiers and riders to Canyons, marking our first season in Park City, Utah. Our urban ski areas in Minneapolis and Detroit are open and benefiting from significant improvements in facilities, snowmaking and lifts that will differentiate Afton Alps and Mount Brighton in their local markets. We are thrilled that our guests will have the opportunity to experience the new terrain at Peak 6 at Breckenridge, offering 23% more terrain for the resort, serviced by two new lifts including a high speed six-person chair. In addition, Vail is following up on the successful launch of Gondola One with an upgrade to Chair 4 from a four-person to a six-person chairlift and Beaver Creek guests will enjoy the new Talons on-mountain restaurant. Our continued focus on disciplined reinvestment allows us to offer our customers the outstanding mountain resort experiences that they expect from Vail Resorts.”
With its pioneering Epic Pass, Vail Resorts looks to season pass sales to drive lift revenue, and early numbers for 2013-14 look strong. Sales of season passes through December 7, 2013 for the 2013-14 ski season, including the company’s lesser-priced “4-Packs” were up approximately 13% in units and approximately 16% in sales dollars versus the comparable period in the prior year, including the company’s newly acquired ski resorts in both periods.
“This year’s season pass sales represent the largest percentage increase in the program since the introduction of the Epic Pass in 2008,” Katz trumpeted. “These season pass results continue to demonstrate a compelling value proposition to our loyal guests and the ongoing success of our effort to get our guests to commit to skiing and riding our resorts before the ski season begins. We continue to see strong growth in our large Colorado and Tahoe markets and also showed good growth for our first year with a presence in Utah. Once again, pass sales in Minneapolis and Detroit represented our best performing destination markets.”
Advance reservations at Vail Resorts-owned properties were trending in sync with increases seen across the western U.S. ski industry as a whole. Katz reported good momentum across the company’s properties on both occupancy and rate, particularly in Vail, Beaver Creek, Breckenridge and Canyons.