Vail Resorts has bounced back from two years of pandemic-pinched performance to post its best year ever in 2022.
The company on Wednesday reported more than $2.5 billion in net revenue and $836.9 million in earnings from its ski and hotel operations, setting a high mark for North America’s largest resort operator.
Vail Resorts also reported a record 17.3 million skier visits for the 2021-22 ski season, accounting for 28% of the nation’s ski resort traffic. Four of the company’s ski areas were the country’s busiest resorts in 2021-22, with Breckenridge posting the most skier visits in the U.S., followed by Vail ski area, Park City Mountain Resort in Utah and Keystone. The company’s Beaver Creek ski area ranked as the 10th most visited ski area last season. Vail Resorts does not release visitation numbers for individual resorts.
Wednesday’s earnings release marks a rebound from the early weeks of the 2021-22 ski season, when the company struggled to open terrain as it endured a labor shortage, which was particularly acute in mountain communities. Home prices in resort-anchored mountain communities have more than doubled since the start of the pandemic, triggering a shortage of housing for workers.
Vail Resorts chief Kirsten Lynch told investors and analysts in a conference call on Wednesday that housing “is a crisis in our mountain communities,” while detailing progress on worker housing projects at its resorts in Utah and British Columbia. She said her company’s “key focus and priority” is partnering with mountain communities to create housing for its workers.
That’s not happening at its flagship Vail ski area, where the company is locked in a legal battle with the Town of Vail over plans to build lodging for 165 workers on a parcel where the town wants to protect a bighorn sheep herd. Vail Resorts has filed a complaint in Eagle County District Court challenging the legality of the Vail Town Council’s emergency ordinance blocking all permits on the parcel. The town last week offered the company $12 million for the parcel and asked Vail Resorts to respond by early next week.
Vail Resorts’ fiscal year 2022 — which ended July 31 — was buoyed by a record-setting finish to the ski season. The company reported $372.6 million in net income in February, March and April this year, which is about $80 million more than the same span of three critical months in 2019. It had a good summer too, with record traffic at the company’s three Australian resorts and a rebound in warm-weather visitors at its North American resorts.
In December, Vail Resorts reported it had sold 2.1 million of its Epic Passes for the 2021-22 ski season, an increase of 700,000 season passes and one-day passes from the previous season. Last season, more than 72% of skiers at the company’s 37 North American ski areas used one of those passes purchased before the season started. That’s a major pillar of the Vail Resorts’ business strategy: selling more advanced lift tickets and passes before the lifts start turning for the season removes the resort industry’s historic struggle with the fickle flow of revenue based on snowfall.
After logging a 50% annual increase in the sales of the Epic Pass and more limited Epic Local Pass for the 2021-22 season, the company reported a 10% decline in those passes for the 2022-23 season. But sales of the Epic Day Pass have been robust. The company on Wednesday reported pass sales were pacing ahead of the previous season by 6% in units and 7% in dollars.
Lynch said the decline in season passes among its high-frequency skiers was expected. She said the company is “highly penetrated” into the market of more dedicated skiers.
“We expect the majority of growth will continue to come from Epic day tickets as we convert low and lower frequency visitors to pass products,” she told investors and analysts.
Vail Resorts planned to spend as much as $337 million on capital upgrades this year, which included 18 new chairlifts. That record spending fell by about $10 million when Park City, Utah, planning officials revoked the company’s permit to upgrade two chairs at its Park City Mountain Resort. Then the company was forced to delay completion of a new chairlift at its Keystone ski area after White River National Forest officials discovered crews had carved a road into alpine terrain beyond its permitted boundary. Lynch told the investors “a construction issue” pushed the opening of the new chair in Keystone’s Bergman Bowl to the 2023-24 ski season and noted the delays at Keystone and Park City would cost the company about an additional $20 million.
Vail Resorts has $1.1 billion in the bank. When an analyst asked how the company would be prioritizing possible uses for that cash, Chief Financial Officer Michael Barkin said the focus will remain on investing “internally in the business as well as finding strategic acquisitions.” Last month, Vail Resorts closed a $156 million cash deal for a 55% stake in Andermatt-Sedrun resort in Switzerland, marking the company’s first acquisition in Europe.
The company said it plans to spend as much as $196 million on projects in 2023, including upgrades at Breckenridge’s Peak 8, a new high-speed quad chairlift at New Hampshire’s Attitash, a new chair at Washington’s Stevens Pass and adding 500 new parking spots across four resorts the company did not identify. Vail Resorts is retooling the two lifts it had planned to install at Park City for replacements at Whistler in British Columbia.
The company did not announce any projects or investments at Crested Butte Mountain Resort. Since the company acquired the Crested Butte ski area in 2018, it has replaced two fixed-grip chairs with higher-capacity lifts. The 1,500-acre Gunnison County ski area has not seen the level of investment that Vail Resorts has directed at its four, much busier resorts in Summit and Eagle counties.
The company on Wednesday announced a new technology that would allow skiers to load their passes into their phones, eliminating the need for plastic cards tucked in pockets but still offering hands-free scanning.
Last season, a labor shortage left Vail Resorts limping through the critical holiday period. The company invested $175 million this year in its employees, increasing minimum wage at all its North American ski areas to $20 an hour and investing in housing, employee training and human resources. Lynch said the company was fully staffed at its resorts this summer and is “on track for full staffing” for the 2022-23 season.
“We are feeling good about where we are in the process right now,” Lynch said.