Vail's Third Quarter "Significantly Impacted" by COVID-19
COVID-19 cut the 2019-2020 ski season short by about a month and "significantly impacted" Vail Resorts' third quarter earnings, according to the ski company. Thursday, CEO Rob Katz told investors the company lost $140 million in the first four months of 2020. Net income was $152 million, down from $292 million the year before.
Vail operates 37 mountain resorts. 34 are in North America, including Park City Mountain, which is one of the largest employers in the Park City area. All of Vail's U.S. resorts shut down March 15th due to coronavirus concerns. When asked what the post-COVID-19 ski experience looks like, Katz said the company will find out this summer when they open their three properties in Australia.
“Our focus will be on those pinch points, certainly inside of our restaurants and lift lines, and certainly as people enter the resort, our job will be to make sure that we can maintain social distancing while still giving people a great experience,” Katz said.
He also mentioned the company is "rigorously" following traveler surveys, which show, despite a pandemic, skiing still has a devoted customer base.
“I think our takeaway from what we're seeing is what we would expect," Katz said. "It's another strength I think; not only of our company, but of the whole industry that there is an incredibly passionate committed base of skiers who see skiing and riding as a core part of what they do and every indication that we have so far would suggest that that's going to continue; exactly to what level, that remains to be seen.”
Traveler surveys also show skiers are scaling back on travel as long as coronavirus is around. Katz says that plays in Vail’s favor.
“There is no doubt that right now, at least consumer sentiment seems to be -- the shorter the distance, the better; so obviously, for our resorts, the fact that we're near so many major urban markets I think is a big positive. No doubt domestic travel; air travel, I think is in a much better spot than international travel, which again, I think bodes well for most of our resorts; And, I think another piece is that all of our resorts, for the most part are really located near major metropolitan airports as well.”
So, how are season passes going? It is hard to tell, said Katz, because Vail moved the deadline for purchasing passes to Labor Day.
“It really is tough to read anything into the information that we're seeing today versus what we might have seen last year because of the absence at this point now of two different deadlines," he said. "But given that we have not had deadlines; I think we're pleased with the enthusiasm, pleased with the engagement. And -- obviously, our message to pass holders at this point has been to give them more time because we think that the conversation about next season is best had when there is more information about next season.”
Vail is also giving consumers two refund options in the event of a COVID-19 closure next ski season. Skiers can choose a week of the season they are protecting. If the resort must close that week, they get a full refund. Or, if they choose the full season and there is a closure, Katz said pass holders will get a proportionate amount of the value of the pass back.
“We did that because obviously there are two types of skiers, and I think that was one of the challenges looking backwards to this past year; some skiers really do want to use the pass start to finish, other skiers are buying the pass just for a particular week of the season when they're going to come out," said Katz. "And so, we designed this coverage to really be flexible, to be able to provide both of those guests really the peace of mind to know that they are not at risk, one way or the other, as they go into next season."
Katz said the plan is to open the resorts for the 2020-2021 season, so visitors get the complete mountain experience. And he plans to keep the full terrain of the resorts open, COVID-19 and weather permitting, even if there is lower demand.
Click here to see the news release from Vail Resorts about third quarter earning results.