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Vail Resorts sees strong quarter despite poor snow season in U.S.

Lift revenue up 8%, pass sales up 19%



Vail Resorts posted strong third-quarter results in spite of poor weather at some of its U.S. properties to start the ski season.

For the fiscal period ending April 30, the Colorado-based ski giant saw its total net revenue increase 6.3 per cent, to US$844.5 million, compared to the same period last year.

Lift revenues grew by 7.9 per cent to $452.7 million, an increase company CEO Rob Katz attributed primarily to "strong season pass sales for the 2017/18 North American ski season and the inclusion of Stowe." Last summer, Vail Resorts closed a $41-million deal to acquire Stowe Mountain Resort, one of Vermont's best-known ski resorts.

Season pass sales for the 2018-19 ski season, excluding military pass products, increased approximately 12 per cent in units, and 19 per cent in sales dollars compared to the same period last year, ending May 30. The company reported that the Epic Pass, Vail Resorts' unlimited ski pass for its roster of ski properties, was the fastest growing pass product among all of its passes this year.

"Our spring pass sales included strong growth across nearly all markets, with continued strong performance among our destination guests in the U.S. and internationally," Katz said in a June 7 conference call.

"We had particularly strong pass sales in Whistler Blackcomb's regional market, with solid growth in Colorado and Tahoe, despite the challenging conditions experienced throughout the season in those regions."

Commenting on its largest resort, Katz said Whistler Blackcomb "experienced excellent conditions and achieved another season of record results."

This helped buoy the historically low snowfall that hit the western U.S. over the first half of the ski season. Katz said visitation "rebounded sharply" as conditions improved over the latter half of the season.

The ski executive credited the company's geographical diversity and its emphasis on advanced purchase products as key to "the resiliency of our business model."

Ski-school revenue increased $9.4 million, or 10.4 per cent, while dining revenue rose $5.1 million, or 7.7 per cent. Both increases were attributed to strong revenue at Whistler Blackcomb, its Colorado resorts, as well as incremental revenue from Stowe.

Retail-rental revenue grew by $2.1 million, or two per cent, primarily due to incremental revenue at Stowe and an increase in revenue at Whistler Blackcomb.

Operating expenses increased 6.9 per cent, or $23.5 million, largely attributed to the inclusion of incremental operating expenses from Stowe.

If there was one area where the company fell flat, it was in lodging, with its lodging revenues for the quarter declining 0.2 per cent.

Vail Resorts should have several new properties under its wing to start the 2018-19 ski season after agreeing this month to purchase Triple Peaks LLC, parent company of Okemo Mountain Resort in Vermont, Mount Sunapee Resort in New Hampshire, and Crested Butte Mountain resort in Colorado. The company also agreed to buy Stevens Pass Resort in Washington in a separate deal. Vail Resorts has committed to investing $35 million into the four resorts over the next two years, subject to the deals' approval.