Vail Resorts see big drop in business

Vail Resorts' latest quarterly report offered more evidence of what a tough winter it was for the ski industry.

The publicly traded company reported Tuesday that its earnings for the quarter ending April 30 declined 29.4 percent from the same period a year earlier. Earnings fell to $61.6 million, or $1.68 per share, from $87.7 million, or $2.24 per share a year ago, based on a 21.3 percent drop in revenues to $333.5 million.

Rob Katz, CEO of Denver-based Vail Resorts Inc., blamed a recession-driven downturn in visits by destination skiers for red ink in nearly every segment of the company's operations. Vail Resorts has four operations in Colorado -- Vail, Beaver Creek, Keystone and Breckenridge resorts -- and Heavenly Valley in California.

Consequently, total skier visits for the season were down 5.3 percent and total lift ticket revenue fell 8.4 percent. The end of the season was particularly bad, with visits down 22 percent. Similarly, ski school revenue dropped 21 percent during February, March and April. Retail sales slid 19 percent. Dining revenue dropped 20 percent, based on 15 percent fewer food-and-beverage transactions and, Katz said, "an even greater decline in fine dining."

Vail's lodging sector also suffered, with quarterly earnings dropping 27 percent. Fewer destination visitors meant resort lodges were offering promotions and packages that resulted in a 7 percent decline in the average daily room rate.

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only positive news in the quarterly report was that Vail sold 12 percent more season passes last winter than in the winter of 2007-08. Because last winter's passes cost more, the resort recognized a 22 percent increase in season pass revenue. But that source of income was small, compared with the other, shrinking sectors.

None of Utah's 13 ski areas, all of which are privately held, release their skier numbers or any other financial data. That's why Vail's numbers are valuable, providing insight into the industry's general health.

Nathan Rafferty, president of Ski Utah, marketing arm of the state's industry, said previously he expects Utah's skier-day totals to be down about 6 percent from last year's fourth straight record total. Those numbers will be released later this summer.

But after a recent meeting of the National Ski Areas Association, Rafferty felt "the resorts that had the tougher times this year were those whose revenue was dependent on more things than lift tickets and lessons -- the resorts that own lodges, restaurants, stores." That applies to Vail more than any Utah resort.

A report presented at that conference by RRC Associates put total skier visits nationally last season at 57.1 million, down 5.5 percent from the previous winter's record, with projected visits to Utah, Colorado and New Mexico down 6.8 percent, to 16.45 million.

These numbers are fairly consistent with findings of the Denver-based Mountain Travel Research Program. It estimated destination ski resort communities across the West took in an estimated 25 percent less revenue this winter than a year earlier.

mikeg@sltrib.com