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Ski resort operations boost Intrawest’s third quarter results

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What began as a winter of uncertainty following Sept. 11 has become one of the best on record for Intrawest Corporation, parent company of Whistler-Blackcomb and eight other mountain resorts.

Intrawest announced this week that a strong performance in ski and resort operations in the third quarter, which ended March 31, drove income from continuing resort operations up 12.2 per cent, to $56.2 million US, compared with $50.1 million US in the same quarter of 2001.

"The strong earnings growth in the third quarter, despite the very challenging conditions in the leisure industry, reflects the high degree of customer commitment to our resorts and the strong competitive position we have established," Joe Houssian, Intrawest’s chairman, president and chief executive officer, said in a release.

Ski and resort operation revenue was $273.1 million in the third quarter, up from $267.9 million in the same quarter of fiscal 2001. Skier visits for the quarter increased 4.1 per cent over the previous year.

Cost cutting in the first and second quarters were also credited with contributing to the strong numbers in the third quarter.

Intrawest does not release results from its individual resorts but did state that strong visit growth at its western resorts was offset by a slight decline in the number of visits to its eastern resorts.

Skier visits at Whistler-Blackcomb are believed to be close to last year’s numbers. Intrawest chief financial officer Dan Jarvis said in a conference call the number of paid room nights at Whistler this winter declined by about two per cent from last year.

Following the terrorist attacks of Sept. 11 the ski industry in North America scrambled to maintain visitors. Reduced airline service and many people’s reluctance to fly forced some resorts, including Whistler, to refocus their marketing efforts toward regional, rather than destination, visitors.

In many instances the effort was successful, as the number of visitors declined only slightly. However, regional visitors generally don’t spend as much as destination visitors. Intrawest’s third quarter results bear this out, as revenue per visit to Intrawest resorts declined 2.2 per cent from last year "due largely to the increase in local and regional guests who typically generate less revenue per visit."

"We are pleased with the seven per cent growth in operating profit from ski and resort operations over the 2001 quarter, which was up in turn by 19 per cent over the same quarter in 2000," Jarvis said in the release.

Intrawest’s overall revenue for the quarter was $342.1 million US, compared to $339 million US in the same quarter of 2001. Basic earnings per share increased from $1.15 to $1.28.

However, revenue from warm weather resorts – Sandestin Golf and Beach Resort in Florida – was down slightly in the third quarter, to $12.8 million US from $13.2 million US last year.

Resort Reservations Network Inc., the company’s central reservations business, continued to experience strong growth with gross bookings increasing by 245 per cent on a fiscal year-to-date basis to $45.2 million US. The reservations business continues to expand its network to include additional destination resorts.

Resort Reservations Network is also believed to be on the verge of acquiring a Florida-based competitor. According to Business In Vancouver , Resort Reservations Network has won a bidding war to buy 800 Travel Systems Inc. for $2.4 million US.

800 Travel Systems has 250 employees and specializes in providing airline reservations through a toll-free centre and its Web site. In March 800 Travel Systems filed for Chapter 11 creditor protection.

Intrawest’s real estate revenue for the third quarter was down slightly from last year, to $64.2 million US from $65.5 million US. Sales for the quarter were lower than expected due to construction delays at the First Ascent project in Squaw Valley.

Currently the company has a record backlog of real estate contracts with total pre-sales of over $700 million, of which approximately $250 million is expected to close in the fourth quarter of fiscal 2002 and the balance is expected to close in fiscal 2003 and 2004.

Intrawest’s vacation ownership business posted an increase over the third quarter of 2001, with revenue of $16.5 million US compared to $13.2 million last year.

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