Vail considering cutting back on announced improvements- beginning of the end for VR?

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  1. #1

    Vail considering cutting back on announced improvements- beginning of the end for VR?

    Thought this may deserve it's own thread...

    While we entered this situation in a strong financial position, we believe the potentially challenging economic environment ahead requires us to review our previously announced calendar year 2020 capital plans and our plans for returning capital to shareholders and will provide updates on those plans as we finalize decisions.
    That's straight from the investor website, folks... http://investors.vailresorts.com/new...ovid-19-impact

    Frankly, $215m of capital improvements and 6 new lifts announced for next season across a portfolio with 37 total areas is not much on a per-area basis. I think that ASC and Vail are both proving that stockholders (on the American stock exchange, at least) do not want to weather (haha) the ups and downs of the ski season. And while a large amount of resorts across the globe can protect against poor snow years- that size can't protect against a global recession or economic downturn. And while your local ski area can adapt and survive a few years with profits down 10%, on a large company like Vail they're not just losing profits- they'd be losing shareholders. Double whammy.



    So...does Vail sell a few resorts to generate additional cashflow? Unloading just a handful of properties would create $50m of cash- looks good on any company balance sheet.
    2019-2020 59 days and holding...
    Thunder Ridge: 12/7, 12/8, 12/21, 12/26, 12/27, 12/28, 12/29, 12/31, 1/4, 1/5, 1/11, 1/17, 1/18, 1/19, 1/26, 2/1, 2/2, 2/8, 2/9, 2/15, 2/16, 2/20, 2/21, 2/22, 2/23, 3/7, 3/8
    Killington: 11/15, 12/16, 12/17, 12/18, 12/19, 12/20, 12/23, 1/3, 1/30, 1/31, 2/13, 2/27, 3/12
    Mount Snow: 11/27, 12/2, 12/24 Sunday River: 1/8, 1/9, 1/10 Greek Peak: 1/13, 1/14 Jiminy Peak: 12/6 Catamount: 12/13, 3/5 Pico: 12/19, 2/28 Mohawk: 12/27 Burke: 1/1 Ragged: 1/2 Wildcat: 1/6 Cannon: 1/7 Jay Peak: 1/23 Mad River Glen: 1/24 Magic: 2/14
    "Skiing is the closest you'll get to flying without leaving the ground." -snowmonster

  2. #2
    Is there anybody out there that would by these ski areas in the middle of a recession? It's not like Vail is the only one hurting. If next winter is a bad winter skier visit/weather wise, they may be in trouble, but so will everybody else

  3. #3
    Quote Originally Posted by icecoast1 View Post
    Is there anybody out there that would by these ski areas in the middle of a recession? It's not like Vail is the only one hurting. If next winter is a bad winter skier visit/weather wise, they may be in trouble, but so will everybody else
    People bought the old ASC resorts when the economy tanked. It's just the nature of public companies to make short-term decisions rather than focus on the long run, hence I wouldn't rule out Vail selling a resort for a decent price to get is sold quick so the cash is reported on the Q4 2020/Q1 2021 report.
    2019-2020 59 days and holding...
    Thunder Ridge: 12/7, 12/8, 12/21, 12/26, 12/27, 12/28, 12/29, 12/31, 1/4, 1/5, 1/11, 1/17, 1/18, 1/19, 1/26, 2/1, 2/2, 2/8, 2/9, 2/15, 2/16, 2/20, 2/21, 2/22, 2/23, 3/7, 3/8
    Killington: 11/15, 12/16, 12/17, 12/18, 12/19, 12/20, 12/23, 1/3, 1/30, 1/31, 2/13, 2/27, 3/12
    Mount Snow: 11/27, 12/2, 12/24 Sunday River: 1/8, 1/9, 1/10 Greek Peak: 1/13, 1/14 Jiminy Peak: 12/6 Catamount: 12/13, 3/5 Pico: 12/19, 2/28 Mohawk: 12/27 Burke: 1/1 Ragged: 1/2 Wildcat: 1/6 Cannon: 1/7 Jay Peak: 1/23 Mad River Glen: 1/24 Magic: 2/14
    "Skiing is the closest you'll get to flying without leaving the ground." -snowmonster

  4. #4
    JimG.'s Avatar
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    We can debate the financial details endlessly, the entire recreation/hospitality/travel industry literally entered a black hole of uncertainty in one week.

    Who knows what emerges on the other side of this but I'll bet Vail unloads quite a few smaller areas or just outright closes them.

  5. #5

  6. #6
    In theory sure, but who's gonna buy ski resorts in the next five - six months when that cash injection is needed?

    Sales in the Ski resort market is really only there right now for some rich dudes that don't mind throwing good money after bad in southern VT.

    Sent from my XT1635-01 using AlpineZone mobile app

  7. #7
    Were it to ever get bad, Vail Resorts would likely just sell off some of its' nonessential properties which it acquired in "just because" fashion. Things like Liberty, Roundtop, Mount Sunapee, etc....
    President - Bicknell's Thrush Extermination Solutions (BTES), LLC



  8. #8
    I really think this, "end of days" economic picture is greatly overblown.

    I think by 4Q20 a serious recovery will be underway once the virus is likely to be mostly gone.

    I think the greatest threat isnt "jobs", but how quickly the velocity of hiring can take place for those displaced. And it's not entirely unreasonable to believe that even in that concern, the snap-back could be quick if we assume "Jeff" gets hired back at the same job he lost 2.5 months earlier. I think that's somewhat logical.
    President - Bicknell's Thrush Extermination Solutions (BTES), LLC



  9. #9
    Quote Originally Posted by BenedictGomez View Post
    I really think this, "end of days" economic picture is greatly overblown.

    I think by 4Q20 a serious recovery will be underway once the virus is likely to be mostly gone.

    I think the greatest threat isnt "jobs", but how quickly the velocity of hiring can take place for those displaced. And it's not entirely unreasonable to believe that even in that concern, the snap-back could be quick if we assume "Jeff" gets hired back at the same job he lost 2.5 months earlier. I think that's somewhat logical.
    Sounds good to me!

  10. #10
    Quote Originally Posted by BenedictGomez View Post
    Were it to ever get bad, Vail Resorts would likely just sell off some of its' nonessential properties which it acquired in "just because" fashion. Things like Liberty, Roundtop, Mount Sunapee, etc....
    Mount Sunapee was a "just because" purchase???

    It's probably the second busiest ski area in the state of NH. The place prints money. They have approval to expand it's terrain by almost 50% with a significant real estate project at the base of the new terrain. Sunapee is also less than two hours from metro Boston making it a great selling point for the Epic pass as a solid day trip option when people are unable to make the 3-4 hour drive to their VT areas.

    In NH it would certainly make more sense to dump Crotched, Attitash or Wildcat before Sunapee.

    Sent from my XT1635-01 using AlpineZone mobile app

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