Vail Resorts Inc. announced Wednesday that it posted record revenues for the fiscal year that ended July 31, in part due to strong lift-ticket sales.
Vail Resorts reported a 5.4 percent increase in skier visits and a 4.3 percent increase in average lift-ticket prices.
Lift-ticket sales, including season passes, are the single largest source of revenue for the company, accounting for approximately 29 percent of its total net revenue of $810 million, up from $726.6 million in the prior fiscal year.
So, will Vail Resorts raise lift-ticket prices again this winter? The company – which owns the Vail, Beaver Creek, Breckenridge and Keystone ski resorts in Colorado – has already increased the price of its popular Colorado Pass by $20 this year, to $369. The pass provides unlimited skiing at Breckenridge, Keystone and Arapahoe Basin and 10 days at either Vail or Beaver Creek.
The company also owns Heavenly in Lake Tahoe, Calif.
Single-day ticket prices have not been announced for the upcoming season, which starts Nov. 18 for Vail. A full-priced, single-day adult lift ticket there cost $77 last season, up from $73 the previous season.
Vail chief executive Adam Aron declined to say what prices will be, but touted to Wall Street the draw of Vail Mountain in particular. Last season, it was the most-visited ski resort in the nation, with 1.57 million skier visits.
“There appears to be no top to what we can successfully charge for a resort of Vail’s caliber and quality,” he said in a conference call with analysts Wednesday.
Advance season pass sales are up 22 percent over last year, said Aron.
“The company wouldn’t boost ticket prices if there wasn’t strong demand,” said Will Marks, a ski industry analyst at JMP Securities in San Francisco. “We don’t think that Vail is increasing prices to a level that is alienating its customers.”
Ivan Feinseth, managing director at Matrix USA LLC, a New York institutional research and brokerage firm, said he considered Vail Resorts’ annual earnings mixed.
“The positive is the strong trend-line growth in revenue, but the negative is lower return on capital,” he said. “And going forward, we feel that high energy costs and higher interest rates could slow the growth in 2006.”
For the fiscal year 2005, the company recorded a net income of $23.1 million, reversing the net loss of $6 million it posted in the previous year.
The company breaks down its operations into three segments:
Revenue from mountain operations rose by 8 percent to $540.9 million. Earnings before interest, taxes, depreciation and amortization, or EBITDA, in that segment grew by 13.3 percent, to $151.3 million.
Lodging revenue grew by 8.8 percent to $196.4 million. Lodging EBITDA jumped 45.9 percent, to $16.2 million.
Real estate revenue grew by $27.7 million to $72.8 million despite the fact that real estate EBITDA fell by $16.5 million, to $14.4 million.
For the fiscal fourth quarter, the company reported a net loss of $36.4 million, slightly lower than the net loss of $36.3 million it posted during the same time period in 2004. Ski companies traditionally lose money in the slower summer months.
Vail Resorts’ stock price, which has risen sharply in the past year, closed Wednesday at $28.36, down 12 cents.
Staff writer Julie Dunn can be reached at 303-820-1592 or at jdunn@denverpost.com.
