Vail Resorts Struggle as Snowless Season Hits

By Aaron Kuriloff and Amanda J. Crawford - Jan 7, 2012 4:05 AM GMT+0700
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A skier goes down a trail at Breckenridge Ski Resort in Breckenridge, Colorado. Photographer: Liam Doran/Vail Ski Resorts Inc. via Bloomberg

Vail Resorts Inc. (MTN) shares have fallen 15 percent since Dec. 23 as major ski trails were closed at the company’s mountain properties in the western U.S. because of a lack of snow.

Visitors to the company’s resorts were down 15.3 percent compared to this time last year, Rob Katz, chief executive of the Broomfield, Colorado-based company, said in a statement.

Lift ticket revenue was up 0.6 percent and revenue from ski school was up 0.9 percent, even though “very unusual” weather had reduced skier visits and the use of season passes, he said.

“For the first time in 30 years, a lack of snow has not allowed us to open the back bowls in Vail as of January 6, 2012, and, for the first time since the late 1800s it did not snow at all in Tahoe in December,” Katz said in the statement.

Shares of the Broomfield, Colorado-based company traded at $38.30 at 4:02 p.m. today in New York after closing at $45.11 on Dec. 23.

Nationally, about 16 percent of the U.S. is covered by snow, compared to about 45 percent at this time last year, according to the National Weather Service. Ski resorts in Europe have also suffered from lack of snow, leading to the cancellation of World Cup skiing events such as one scheduled for Munich on New Year’s Day.

Snowless Landscape

Martin Pyykkonen, a senior analyst with Wedge Partners of Greenwood Village, Colorado, said people who live in Denver have been amazed by the lack of snow this season.

“People who have lived here all their life say they’ve never seen anything like it,” he said today in a telephone interview.

From his window looking out over Denver and the Rocky Mountains, Pyykkonen said, all he sees is brown.

“It looks like springtime except it is all gray and brown, because there is no snow anywhere,” he said. “It’s a terrible year, bottom line.”

Pyykkonen says Vail Resorts makes more money from out-of- town visitors than from locals. Even if there is a good snowfall in the next few months, he said, it may be too late for families now planning spring vacations.

“Those people are listening to the weather reports and saying, ‘Let’s not go there, it won’t be a ski vacation,’” he said.

Vail Resorts operates ski resorts including Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Heavenly and North Star in the Lake Tahoe area of California and Nevada; and the Grand Teton Lodge Co. in Jackson Hole, Wyoming.

Katz said the company wasn’t revising earnings numbers issued in September 2011, though it “would acknowledge that those targets will be more difficult to achieve given the results over the holidays.”

To contact the reporter on this story: Aaron Kuriloff in New York at akuriloff@bloomberg.net; Amanda J. Crawford in Phoenix at acrawford24@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net.