In Historic Move, Vail Resorts Reduces All Pass Prices by 20 Percent Toward Goal of "Epic for Everyone"

[Pat AKA mustski]

If it came down to choosing to buy resorts in SoCal or Eastern US, then the larger population of the east and all its feeder resorts that Vail now owns for day skiers and Stowe for weekend ski trips and western resorts for ski weeks, makes sense.

Vail even bought Stevens for Seattle day skier visits and Whistler for Seattle weekend and ski week skiers; again, it makes sense.

The entire state of of WA has a population of 7.6 million. The SoCal area has 22 million, all within a 3 hour drive of Big Bear and many of them much closer than that. Mammoth is 6-7 hours from that. Do you think any of those people are buying the Epic pass? No. Because they get Squalpine, Mammoth, and BBMR all on the Ikon. When they choose luxury ski vacations, which resorts do you think they look at? Vail blew it on this one!

 

[Jwrags]

There is also the lodging factor. Vail resorts have on slope lodging at most of their big resorts. They are hoping to grab the one or two week a year skiers. There is a large demographic who view a ski week as a luxury vacation and they want on slope lodging and dinners out. There are big bucks in that demographic. If Epic can tempt them away from Ikon, it’s a big $$$$ win.

I’m not going to lie ... I enjoy that type of vacation more than any other. Vail resorts made a big mistake in ignoring SoCal. They lost a HUGE population to Ikon because they don’t have a local presence.

Based on lodging prices, if they gain one night of lodging for each discounted pass that more than makes up for the discount.

 

[Jwrags]

I wonder with the discount how many people will buy both passes. That is what I am considering. At that price it doesn't take very many days to more than pay for itself. Given the price of walk up tickets or even advance purchase tickets, 4-5 days will pay for itself at the destination resorts.

 

[raytseng]

I wonder with the discount how many people will buy both passes. That is what I am considering. At that price it doesn't take very many days to more than pay for itself. Given the price of walk up tickets or even advance purchase tickets, 4-5 days will pay for itself at the destination resorts.

It will be a percentage but I think you'll be surprised how many people will pick just 1 and fall into the psychology of overanalyzing or optimizing pass prices.

As you mentioned above in spending on the pass should be inconsequential compared to the total, and people ahould just get full epic or 2 passes. But look how many pass products there are to shave off $40 to $100 differences and consumers wringing their hands over which to buy.
The price is right on the screen with no distractions people gonna optimize and overanalyze their decision.

Then once they pick one pass, they aren't going to adjust and buy more they are already committed to their decision. You could make a support group and therapy for people who complain on blackout that they aren't allowed to ski, when 1)this was their decision preseason 2)they could buy out of it or 3) buy a dayticket at another resort, but somehow feel they arent allowed to do any of those things.

It is the same reason why there are people that drive around to save 5cents on gallon of gas, but will blow $10 on a beer at a bar or game.
The human brain will overanalyze if overfocused on pricing of a particular thing the more it is presented without distractions.

 

[newboots]

I am thinking of buying both. I have at least one trip to join where 4 of 6 days will be at Ikon resorts. I can use my 5 days at Windham and another at Killington. And I can buy a senior, Northeast, midweek Epic pass for $271, for Hunter, Okemo, and Wildcat, where additional trips are in the planning stage. However, depending on where (in this area) I'm living next winter, I might want a midweek at Thunder Ridge, too . . . now it's starting to add up!

 

[DanoT]

The entire state of of WA has a population of 7.6 million. The SoCal area has 22 million, all within a 3 hour drive of Big Bear and many of them much closer than that. Mammoth is 6-7 hours from that. Do you think any of those people are buying the Epic pass? No. Because they get Squalpine, Mammoth, and BBMR all on the Ikon. When they choose luxury ski vacations, which resorts do you think they look at? Vail blew it on this one!

22 million people in SoCal as a potential target market sounds impressive until you realize that if you concentrate on ski area acquisitions on the east coast you have a population that is 5x that of SoCal.

I do think that given its location and Black Diamond reputation, I do think that Kirkwood is an odd fit for Vail ownership.

As far as the Seattle market goes, it was very savvy to compete with Crystal/Ikon by having Steven's Pass and Whistler on the Epic pass. IMO. Crystal is superior to Stevens, but if you include access to WB, then it makes the Epic Pass very attractive.

 

[Wilhelmson]

Especially towards the end of this year people are going to want to travel, eat out, and do fun ski related stuff. Many haven't done much for the year or might not have skied or traveled at all. Add in a well timed stimulus and they can sell lots of discounted passes and make more money

We talk about skiing being too expensive but this opens up season passes to a huge new group of people.

 

[Mister Tea]

The nice thing about the mega passes is that they make the cost of lift tickets a small part of the overall ski budget. The thing is, airfare, lodging, ground transportation, gear, etc. remains expensive or at least the same as before.

For me the make or break decision is how much I'm willing to spend on those other things; getting both Ikon and Epic passes plus passes at my two local hills would get the lift ticket price down to less than $20/day. The question is how much I'm willing to spend to save so much money on lift tickets. (c:

 

[Eric@ict]

I'm glad they did it, it makes our vets passes very cheap. I do think they will make it up in the occupancy rates of their properties. If your going skiing, most want to be as close to the mountain as they can be. I hope it works out for them and they keep pass prices low.

 

[JoeSchmoe]

I'm glad they did it, it makes our vets passes very cheap. I do think they will make it up in the occupancy rates of their properties. If your going skiing, most want to be as close to the mountain as they can be. I hope it works out for them and they keep pass prices low.

Does anyone know how much Vail owns outside of the skiing operations at most mountains?

I always thought the real estate was all sold off during the 2000s boom. I guess they get their cut when you book lodging through their website instead of VRBO or Airbnb, but that wouldn't make up for the 20% cut (or would it?). How many people still book lodging through the resorts?

Same goes for the village restaurants... That's all private ownership I think. I'd expect the on mountain dining to still be under resort.

Someone here knows the answers.

 

[Eric@ict]

Does anyone know how much Vail owns outside of the skiing operations at most mountains?

I always thought the real estate was all sold off during the 2000s boom. I guess they get their cut when you book lodging through their website instead of VRBO or Airbnb, but that wouldn't make up for the 20% cut (or would it?). How many people still book lodging through the resorts?

Same goes for the village restaurants... That's all private ownership I think. I'd expect the on mountain dining to still be under resort.

Someone here knows the answers.

My brother was a manager for resort properties in Keystone and then moved to Broomfield when they bought all the rock resorts. They have a complete lodging and properties management division.

 

[dbostedo]

I believe lodging, though, is actually a fairly small percentage of their overall revenue. I tried to take a look at the 2019 finance reports, that break things down by category:

http://investors.vailresorts.com/static-files/1e93a8f9-2451-40d6-942f-b2c1411470c6

Looking at tables like these:





The mountain segment dwarfs the lodging segment... and the profit margins (shown elsewhere in the tables) show even more disparity. And for the mountain segment, it appears lift tickets and pass sales are by far the largest category.

I know there are some folks that have dug in and know this stuff better than I do... hopefully someone can add more info.

 

[Erik Timmerman]

Does anyone know how much Vail owns outside of the skiing operations at most mountains?

I always thought the real estate was all sold off during the 2000s boom. I guess they get their cut when you book lodging through their website instead of VRBO or Airbnb, but that wouldn't make up for the 20% cut (or would it?). How many people still book lodging through the resorts?

Same goes for the village restaurants... That's all private ownership I think. I'd expect the on mountain dining to still be under resort.

Someone here knows the answers.

at least at some resorts the answer is no they don’t own any of the real estate and they claim that is not their focus.

 

[Mister Tea]

I believe lodging, though, is actually a fairly small percentage of their overall revenue. I tried to take a look at the 2019 finance reports, that break things down by category:

http://investors.vailresorts.com/static-files/1e93a8f9-2451-40d6-942f-b2c1411470c6

Interesting figures. About $1 billion in lift tickets and another $1.3 billion in all the other stuff. Lift tickets form the bulk of their revenue, but still a bit less than half.

I'm not seeing a line item for real estate sales. I've always thought that was a big part of the business model (find some low cost land, put in some ski lifts and the adjacent land goes form pennies per acre to dollars per square foot), but what do I know. My hunch is that the real estate sales is a separate legal entity.

 

[DanoT]

Interesting figures. About $1 billion in lift tickets and another $1.3 billion in all the other stuff. Lift tickets form the bulk of their revenue, but still a bit less than half.

I'm not seeing a line item for real estate sales. I've always thought that was a big part of the business model (find some low cost land, put in some ski lifts and the adjacent land goes form pennies per acre to dollars per square foot), but what do I know. My hunch is that the real estate sales is a separate legal entity.

I believe that Vail looks at the long term big picture and real estate sales revenue is not long term. This means that once a resort reaches build out and there is no more land to develop, then you better be making a profit from passes, lift tickets, food and beverage, ski school etc. And this is, imo why real estate is not a big part of Vail's business model.

 

[dbostedo]

Interesting figures. About $1 billion in lift tickets and another $1.3 billion in all the other stuff. Lift tickets form the bulk of their revenue, but still a bit less than half.

I'm not seeing a line item for real estate sales. I've always thought that was a big part of the business model (find some low cost land, put in some ski lifts and the adjacent land goes form pennies per acre to dollars per square foot), but what do I know. My hunch is that the real estate sales is a separate legal entity.

There is a bunch of info on real estate in the linked financial report above. But it's investment, not really revenue generating, unless they sell it. Their revenue from real estate was only about $700K, and operations were ~$5.6M, so they "lost" a lot of money on their real estate holdings in 2019. Their real estate holdings appear to be valued at ~$101M. (There a lot of info in there though, and my quick look could be missing things.)

The real estate operations are all within Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary. But they do report on it in the reports.

 

[Eric@ict]

I believe that Vail looks at the long term big picture and real estate sales revenue is not long term. This means that once a resort reaches build out and there is no more land to develop, then you better be making a profit from passes, lift tickets, food and beverage, ski school etc. And this is, imo why real estate is not a big part of Vail's business model.

I think we are missing something. They own a lot of rooms and and those numbers do not line up.

 

[Eric@ict]

There is a bunch of info on real estate in the linked financial report above. But it's investment, not really revenue generating, unless they sell it. Their revenue from real estate was only about $700K, and operations were ~$5.6M, so they "lost" a lot of money on their real estate holdings in 2019. Their real estate holdings appear to be valued at ~$101M. (There a lot of info in there though, and my quick look could be missing things.)

The real estate operations are all within Vail Resorts Development Company (“VRDC”), a wholly-owned subsidiary. But they do report on it in the reports.

Fiscal 2019 compared to Fiscal 2018 Lodging Reported EBITDAfor Fiscal 2019 increased $3.1 million, or 12.4%, primarily due to the incremental operations of Triple Peaks. Revenue from managed condominium rooms increased $16.1 million, or 22.8%, primarily due to incremental revenue from Okemo and Crested Butte, as well as revenue from incremental managed Tahoe lodging properties that we did not manage in the prior year. Dining revenue increased $5.2 million, or 10.7%, primarily due to incremental revenue from our Okemo and Crested Butte lodging properties and an increase in dining revenue at our Park City lodging properties. Golf revenue increased $1.5 million, or 8.5%, primarily due to incremental revenue from our golf courses at Okemo, as well as higher revenue at our golf courses in Beaver Creek and at GTLC. Other revenue increased $7.0 million, or 14.8%, primarily due to an increase in allocated corporate 46 revenue, incremental revenue from our lodging properties at Okemo and Crested Butte, a business interruption insurance recovery related to a closed event facility in Breckenridge and increases in ancillary revenue.

That's an increase of $29.8m over 2018. Skiing is only part of the year. What and how to use those resources the rest of the year is a place to focus. When you look at the increases in %'s, they do jump out as line items to look at a little closer. Decrease passes cost and increase lodging, food, and other revenue. Not a seismic shift, but enough to cover the lights.

 

[dbostedo]

Fiscal 2019 compared to Fiscal 2018 Lodging Reported EBITDAfor Fiscal 2019 increased $3.1 million, or 12.4%, primarily due to the incremental operations of Triple Peaks. Revenue from managed condominium rooms increased $16.1 million, or 22.8%, primarily due to incremental revenue from Okemo and Crested Butte, as well as revenue from incremental managed Tahoe lodging properties that we did not manage in the prior year. Dining revenue increased $5.2 million, or 10.7%, primarily due to incremental revenue from our Okemo and Crested Butte lodging properties and an increase in dining revenue at our Park City lodging properties. Golf revenue increased $1.5 million, or 8.5%, primarily due to incremental revenue from our golf courses at Okemo, as well as higher revenue at our golf courses in Beaver Creek and at GTLC. Other revenue increased $7.0 million, or 14.8%, primarily due to an increase in allocated corporate 46 revenue, incremental revenue from our lodging properties at Okemo and Crested Butte, a business interruption insurance recovery related to a closed event facility in Breckenridge and increases in ancillary revenue.

That's an increase of $29.8m over 2018. Skiing is only part of the year. What and how to use those resources the rest of the year is a place to focus. When you look at the increases in %'s, they do jump out as line items to look at a little closer. Decrease passes cost and increase lodging, food, and other revenue. Not a seismic shift, but enough to cover the lights.

None of that is considered "real estate". That's all "lodging segment", as shown in the chart in one of my prior posts, and is not limited to ski season. Total condo and hotel room revenue in 2019 was about $153M.... or about 6.8% of Vail's revenue.

"Real estate" is the land and building holdings and is not a revenue generator, generally speaking.

 

[Henry]

GOAL OF ‘EPIC FOR EVERYONE’.

Does that also mean 'Parking For Everyone?'

Vail Resorts' Stevens Pass (Washington State) was so bad...impossible weekend parking. So bad that they converted some RV spots to daily car parking and didn't make any notification on the web site or elsewhere. Families with RVs only knew that they could never get a parking reservation. So bad that they frequently didn't have enough staff to run all the lifts on a busy fresh-snow weekday. So bad that they sent some staff home at noon and let the lift lines grow. I've heard equally bad reports of weekend parking at Alterra's Crystal Mtn (Washington State).