Limited day ticket sales at all Vail Resorts this year

[ss20]

What are talking you about, in regards to the huge increase in vails expenses?

They have a lot of debt that is coming due. All those acquisitions over the last 10 years weren't free.

 

[cdskier]

This is a pure marketing stunt. Day ticket purchasers aren't the ones causing crowding issues. Limiting them (to surely some rather high cap that realistically they're rarely hitting now even on their busiest days) will do nothing to improve the experience. Announcing this stunt is simply "free advertising" to try to scare a few more people into buying Epic season passes so they don't need to worry about not being able to ski on any day.

 

[jimmywilson69]

100%

 

[thetrailboss]

What are talking you about, in regards to the huge increase in vails expenses?

skef posted a screenshot from Vail’s investor report that shows that they have a huge debt payment coming due in FY 2025.

 

[skef]

skef posted a screenshot from Vail’s investor report that shows that they have a huge debt payment coming due in FY 2025.

… on another thread:
Post in thread 'Jay Peak bombshell'
https://forums.alpinezone.com/threads/jay-peak-bombshell.131349/post-1094753

 

[jimmywilson69]

If you have a billion plus in cash why don't they pay some of that down now?

I'm sure there is some financial reason now butseems sort of short sighted to me. Which is why I'm an Engineer not in finance

 

[RichT]

If you have a billion plus in cash why don't they pay some of that down now?

I'm sure there is some financial reason now butseems sort of short sighted to me. Which is why I'm an Engineer not in finance

Yeah me too, I tend to follow the "never a borrower or lender be" philosophy.

 

[jimmywilson69]

I'm sure the way you work finances for a $9 Billion company are different than I or even you run your Dental practice Dr Jeff. However, debt is debt and if you have cash now why not pay down at least some of it. Or maybe the plan is to refinance again later. Again I'm an engineer this is well outside of my lane...

 

[ctdubl07]

This space historically relies on perpetual debt refinance and the banks love them for it. It's just a matter of who's holding the carcass when it fully, finally rots (negative cash flow) otherwise keep passing it around. I hold it for awhile, then you do, then someone else.
Further complicated when so much of your value is perceived because you rely on significant land lease scenarios for portions of your portfolio vs true controlling equity ownership of all your property, you have to keep seeking short term higher interest, balloon note funding to keep the merry go round turning.

 

[machski]

I'm sure the way you work finances for a $9 Billion company are different than I or even you run your Dental practice Dr Jeff. However, debt is debt and if you have cash now why not pay down at least some of it. Or maybe the plan is to refinance again later. Again I'm an engineer this is well outside of my lane...

The other thing to consider here is Vail's move to pushing the Epic pass as their main driver is almost done being a cash flow for the season. In season, they will make incremental revenues (lodging they own, lessons, food, beverage, etc) but the big cash deposit for tickets dries up. And their daily operational expenses grow at least 4 fold from what they are right now. So looking at their cash balance now may not be a fair assessment of their cash position. It would be akin to looking at one's personal cash balance just before property taxes, insurance and monthly loan payments come due.

 

[drjeff]

And let's not forget that if they continue to sell well over a million Epic Pass products a year the next few years, even before you factor in the revenue from all other sources, it's not like they won't be bringing any revenue in during the next few fiscal years.

With that big year of debt coming due a known entity a few years ahead of time, I am guessing that the folks in Broomfield can make plans for that year

 

[NYDB]

Regarding the cash position -

probably their debt has covenants that at some point they need to have a certain amount on hand or satisfy some balance sheet ratio for the most favorable terms on their existing debt to continue. somewhere some finance guy has made the calculation that it is financially wise to continue the debt service as scheduled.

also, I think they took on a lot of debt during Covid and those terms are probably pretty great interest rate wise. Why would you retire debt early if it isn’t costing you anything or very little. It’s not like they are letting the cash sit in a checking account doing nothing. 3 month treasuries are yielding 2.84.

although I haven’t been curious enough to look at their financials really so the above could be total bs.

 

[Cobbold]

skef posted a screenshot from Vail’s investor report that shows that they have a huge debt payment coming due in FY 2025.

Talked to my brother about this he use to do commercial asset base lending 30 pus years ago till he changed occupations, granted his knowledge is 30 plus years old so the rules may different, but most commercial loans never go past ten years and may be less than that, The term of the loan is usually 1.5 percent of ebit, then a large ballon payment at the end, the company either does a new loan with the existing lender or seeks out a new lender. Vail bought whistler in 16, counting 16 as year one, ten years takes you to 2025 , when vail needs to redo the loan, how much of that is just whistler, who knows, but my guess whistler is a big chuck of that. my brother said vail would use Wall Street investment firms for this kind of money, remember apollo global Management owned vail before they spun it off, Katz worked for Apollo, so my guess as long as Apollo is in business and Katz has his finger in vail, vail will get its lending from Apollo.

 

[thetrailboss]

Talked to my brother about this he use to do commercial asset base lending 30 pus years ago till he changed occupations, granted his knowledge is 30 plus years old so the rules may different, but most commercial loans never go past ten years and may be less than that, The term of the loan is usually 1.5 percent of ebit, then a large ballon payment at the end, the company either does a new loan with the existing lender or seeks out a new lender. Vail bought whistler in 16, counting 16 as year one, ten years takes you to 2025 , when vail needs to redo the loan, how much of that is just whistler, who knows, but my guess whistler is a big chuck of that. my brother said vail would use Wall Street investment firms for this kind of money, remember apollo global Management owned vail before they spun it off, Katz worked for Apollo, so my guess as long as Apollo is in business and Katz has his finger in vail, vail will get its lending from Apollo.

Makes sense

 

[Harvey]

I am guessing that the folks in Broomfield can make plans for that year

Retirement plans?

 

[jimmywilson69]

gives them plenty of time to sell off their stock...

 

[BenedictGomez]

This is like Hell limiting the number of portable heaters you can purchase.

 

[jimmywilson69]

I honestly don't know anyone who actually believes this will have an effect on crowding.I know regulars at 5 of the now Vail owned PA areas, plus a few anti-vail folks in Brahlorado

 

[drjeff]

I honestly don't know anyone who actually believes this will have an effect on crowding.I know regulars at 5 of the now Vail owned PA areas, plus a few anti-vail folks in Brahlorado

Agree 100%

I think the only things that they could do to make a tangible effect on peak time crowding, would be to go back to a reservations system (with an actual number of reservations that would reduce the number of people on the hill that day), add in many Saturdays to the black out days on more of the lower level value based passes, or raise the costs of all of their pass products by some significant amount to decrease the quantity of passes sold. Not sure that I see any of those happening in the near future.

And on and similar note, forgot what site I read it on, but I read earlier today that Jackson Hole had sold out their fixed number of day reservations last season on roughly 1/4 of their operating days last season And even with that, we still saw the pics of the big AM lines there (and I do get that AM 1st chair lines out of the base area aren't always indicative of what the lines over the rest of the mountain the rest of the day will necessarily be.)

To one extent or another I am sure underneath it all there is the age old debate about what the consumer feels is too crowded (which for many, especially the weekend warrior crowd is something more than say a 5 chair wait ) and what the ski area operator feels is too crowded which would be something nearing full capacity for every chair and a robust flow of traffic through their food and beverage and ski school/rentals operations, since realistically they have way more days per year where they're operating far below their capacity than at/above

 

[machski]

Agree 100%

I think the only things that they could do to make a tangible effect on peak time crowding, would be to go back to a reservations system (with an actual number of reservations that would reduce the number of people on the hill that day), add in many Saturdays to the black out days on more of the lower level value based passes, or raise the costs of all of their pass products by some significant amount to decrease the quantity of passes sold. Not sure that I see any of those happening in the near future.

And on and similar note, forgot what site I read it on, but I read earlier today that Jackson Hole had sold out their fixed number of day reservations last season on roughly 1/4 of their operating days last season And even with that, we still saw the pics of the big AM lines there (and I do get that AM 1st chair lines out of the base area aren't always indicative of what the lines over the rest of the mountain the rest of the day will necessarily be.)

To one extent or another I am sure underneath it all there is the age old debate about what the consumer feels is too crowded (which for many, especially the weekend warrior crowd is something more than say a 5 chair wait ) and what the ski area operator feels is too crowded which would be something nearing full capacity for every chair and a robust flow of traffic through their food and beverage and ski school/rentals operations, since realistically they have way more days per year where they're operating far below their capacity than at/above

If they go back to required reservations for Season Pass products, then that product is no longer a season pass. So I don't think that is the option, at least for full Epic purchasers. Perhaps for the lower/cheaper tiers but that would have to be announced long before they put the pass on sale for the year. That may be the way to go moving forward, Ikon has already begun to lean towards a high priced, mostly unrestricted FULL pass and lower tiered with many restrictions/exclusions lower priced passes. I doubt pass evolutions are complete.