Vail Resorts has been attempting to move guests away from walk-up lift ticket sales and into pre-purchased passes in recent decades, and that strategy seems to have worked better than intended in 2023-24.

Company officials disclosed information about 2023-24 skier visitation and revenue, and discussed the season with analysts on Thursday, June 6, during Vail Resorts’ third-quarter earnings call, sharing a few key takeaways.

Among them: Skier visitation from lift ticket guests was down 17% compared with the prior year period, but total net revenue for the company increased 3.6% to nearly $1.3 billion for the three-month period that ended April 30.

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As a result of revenues falling short of predictions, CEO Kirsten Lynch told investors the company lowered its earnings predictions for its 2024 fiscal year, which will close on July 31. The move marks the third time the company has reduced its expectations in 2024.

The news sent Vail Resorts stock plummeting to a four-year low, hitting $165 per share at one point on Friday before rebounding, somewhat, to current levels of about $180. In early 2024, Vail Resorts stock was trading at about $220 per share.

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Three strikes

After telling investors in December the company was expecting to net an estimated $912 million to $968 million in earnings before interest, taxes, depreciation, and amortization for fiscal year 2024, the company issued a release in January saying that number will more likely be “in the lower half of the guidance range.”

By March, the company had issued an altogether new target of $849 million to $885 million for fiscal 2024.

And on Thursday, Lynch told investors that number was more likely to be in the range of $825 million to $843 million, factoring in the 17% reduction in lift ticket revenue during the company’s fiscal third quarter, which ended April 30.

But there was another factor to consider, as well, Lynch told investors, as 2024-25 pass product sales through May 28 have decreased approximately 5% in units from the prior year period. Due to the company’s 8% price increase over last year’s pass, however, sales dollars have increased approximately 1% compared with the prior year period.

Lynch said the reduction in lift ticket sales from the end of the 2023-24 season, and the decrease in pre-purchased passes for 2024-25 are likely related.

“The single biggest impact on our spring pass sales is new pass holders and that is driven by lift ticket guests,” Lynch said. “And the size of that audience is down significantly, which is impacting, then, our ability to convert them into new pass holders.”

Spring cycle

In recent years, Vail Resorts has used high lift ticket prices as a tool to convert more guests into pre-purchased passes. A single-day lift ticket at Vail Mountain hit $299 during the 2023-24 Christmas-New Year holiday period; it was $199 during the 2017-18 holiday.

Lift ticket sales were expected to make up about 35 percent of Vail Resorts total lift revenue in fiscal year 2024, the company told investors at the company’s 2024 investors conference in March, and Vail Resorts has set a public goal of moving that number to 25%.

At this year’s investor’s conference, the company noted that the “majority of lift ticket business is ‘addressable’ to transition to pass,” and the company is “well-positioned to grow advance commitment with 26 resorts in East and leading Epic brand awareness.”

But doing so requires those lift ticket guests to see the high price at the window during a spring visit, while next year’s season pass is on sale at the lowest price point it will see over the next eight months. Vail Resorts launched 2024-25 season pass sales on March 5, with more than six weeks remaining in Vail Mountain’s season, and more than nine weeks remaining in Breckenridge’s season, to capitalize on the sticker shock lift ticket guests experience at the ticket window.

The decrease in lift ticket revenue the company saw over the final two months of its season was part of an overall decrease in visitation across Vail Resorts and North America, Lynch pointed out on the call with investors, saying Vail Resorts properties saw an 8% decrease in skier visits in 2023-24.

The National Ski Areas Association’s preliminary skier visit numbers for 2023-24, released in May, estimate a 7.6% decrease nationwide to 60.4 million, down from 65.4 million in 2022-23. That number was an outlier on the chart, occurring during a massive snow year when many places across the West saw snowfall totals well above average and some parts of the country broke records.

Before last year, the record skier visit year was the year before, 2021-22, which saw 60.7 million visits, just 0.5% less than this season’s estimated total of 60.4 million.

Nevertheless, Lynch told investors that the company was hoping for another big visitation year in 2023-24 to help boost pre-purchased pass sales for 2024-25.

“I think it is important for us to highlight that the U.S. ski industry decline of 8%, our decline in visits of 8% which is consistent with that, does reduce the pool of guests to transition into a pass, and we do believe that it is having an impact, and it will have an impact through the rest of the selling cycle,” Lynch said.