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

ss20

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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/news-releases/news-release-details/vail-resorts-provides-updated-commentary-covid-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.
 

icecoast1

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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
 

ss20

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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.
 

JimG.

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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.
 

Bosco DaSkia

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deadheadskier

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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.

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BenedictGomez

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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....
 

BenedictGomez

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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.
 

djd66

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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!
 

deadheadskier

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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.

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icecoast1

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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.

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The old Snow time resorts in PA are gold mines as well. Maybe they dump some in the midwest if it comes to that?
 

MikeDeJ

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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.

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I agree with Crotched and some of the PA resorts. All the smaller southern resorts dont seem to be a match for them, they had to buy when they bought Peaks. Jack frost and Big Boulder are Ok but do you really want 2 areas that close? I heard BB may have been on the block before all this to either close or sell it. Im sure they will keep a few but would not be surprised if they sell a few off, even before the virius. The northern resorts Attitash, Wildcat, Sunapee, Snow and Stowe seen like a great fit and make money.
 
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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.

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It all depends on how much money you'd need to raise. Totally agree that you'd rather keep Sunapee over Crotched all else equal. But if you think you need $X and you can only get $X by selling the more profitable property, then such is life.

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snoseek

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They would make some serious dough if they dumped Kirkwood as they got on a fire sale and they have invested minimal over the years.
 

drjeff

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Let's see how long this disruption to our day to day "normal" lifestyle last before hypothesizing about shutting down resorts... If we're basically up and running for the most part by say Memorial Day or even the June 21st start of Summer, that's not necessarily all doom and gloom and rush to hang the for sale sign out front of the base lodge....

If we're talking about significant reductions in "normal daily life" still on Labor Day or Columbus Day, then resorts closing are probably the least of our worries....

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dblskifanatic

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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.

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....

I agree! These doom and gloom threads in light of the times are pointless! Those who want to see Vail crash or hate the mega pass idea put their spin as to why it will fail.

We are in a state that the all current generations (minus a few from the Great Depression) have never seen. Predicting anything at this time is also pointless. I do agree the Q3 and Q4 will be huge rebuilding periods going into 2021. Sad thing - the SMALLER business may not have the ability to recover- larger businesses will scale back for now, capture some stimulus funds and new opportunities will surface.

These threads are pessimists vs optimists! Then again aren’t they all!


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tumbler

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



That's straight from the investor website, folks... http://investors.vailresorts.com/news-releases/news-release-details/vail-resorts-provides-updated-commentary-covid-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.

Every company is taking a hard look at their finances right now and are nervous. It’s not just ski areas.
 

Tonyr

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I'd highly doubt they'd try and sell ski resorts in this type of environment. It's a desperate move that would return pennies on the dollar, shareholders would not be happy. Vail is the largest publicly traded ski company in the world, they are more likely to buy a depressed ski area at a give away price than to sell one that way.
 
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I agree with Crotched and some of the PA resorts. All the smaller southern resorts dont seem to be a match for them, they had to buy when they bought Peaks. Jack frost and Big Boulder are Ok but do you really want 2 areas that close? I heard BB may have been on the block before all this to either close or sell it. Im sure they will keep a few but would not be surprised if they sell a few off, even before the virius. The northern resorts Attitash, Wildcat, Sunapee, Snow and Stowe seen like a great fit and make money.

direct from a finance office employee: jack frost makes the most money out of all the former peaks resorts
 
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