Vail Resorts’ slogan may be the experience of a lifetime, but for the millions of skiers in the Mountain West, not to mention shareholders, that’s definitely not it.
Frankly, the snowpack at the big resorts like Vail and Park City is terrible. Skier numbers are down. The business model of homogenizing land rentals and ski resort experiences appears to be breaking down.
Vail Resorts reported second-quarter results on Monday, releasing key numbers for the critical winter season that ended March 1. The situation is as ugly as the brown streaks on the ski trails in Utah and Colorado.
Compared with the previous season, the number of skiers dropped by nearly 12%. Ski school revenue fell 8%. Food and beverage revenue fell nearly 9%. Rental income fell 6%. I can hear you all saying “stop it, it’s dead,” but wait, there’s more: Apparently, these declines mean that net income dropped from $244 million in the same quarter last year to $210 million this year.
Forgive us for the basic economic lesson, but there are few industries where seasonality is more important than skiing and snowboarding. A bad winter and disillusioned tourists meant Vail slashed its fiscal 2026 forecast to $144 million to $190 million from $201 million to $276 million. The second and third quarters are where the Broomfield, Colorado-based company made all its profits. The rest of the year is all about burning.
Of course, the bad winter wasn’t just Vail’s fault. It was the worst season in history for the mountains west of Vail. Park City has experienced one of its worst winters on record, with unusually warm temperatures and a lack of snow forcing many to cancel flights. The company said snowpack levels were below their lowest levels in three decades.
“This has been the most challenging winter we have ever experienced in the Rockies,” CEO Rob Katz said in a statement.
Vail shares fell in after-hours trading Monday, but rose about 1% on Wednesday. However, the overall trend is self-evident. If you invested in Vail in March 2016 at $131 per share, your investment would be essentially flat. After pulling back from its 2021 high of $372, the stock is currently around $134 per share.
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Vail pioneered the ski subscription service in 2008 when it launched Epic Pass. The idea is to book revenue before the season begins to smooth out the vagaries of nature. When businesses rely heavily on snow conditions, it’s a smart choice to focus on climate trends, such as overall warming and the resulting unpredictability of winter precipitation.
But this model is coming under pressure in a number of ways. Vail hopes to induce skiers to buy Epic Passes, so lift prices for the day have soared, discouraging more recreational skiers. When conditions are bad, thousands of skiers are pushed onto the same track, creating long lift lines and dangerous conditions.
That’s not a recipe for strong pass updates next season, which is a key growth metric for the company. Vail is trying to get a head start by offering discounted passes to Gen Z skiers and skiers under 21 years old. While they may see what’s out there, many families simply won’t renew their passes – or switch to golf.
But the broader trend is that SaaS has reached its limits with Vail’s core model of gobbling up ski resorts like Pac-Man, homogenizing them, and then selling them to skiers.
It’s entirely possible that next winter will be a blast of powder days, hot chocolate, and the happy, icy smile that Weir pitched to investors in his presentation. But without Mother Nature’s luck, it might be time for the company to shed some assets, control costs and look toward a less ambitious future.
Watch for pass renewals, which should start happening soon and will be reflected in Vail’s third-quarter report. Prices for the over-30s will rise by around 3%, which could impact sales even after a harsh winter. Even analysts at investment bank Stifel, who had previously been optimistic about the stock and its underlying business model, lowered their target price from $175 to $172, but still maintained a buy rating.
There’s also competition with Alterra’s IKON Pass, a similar subscription service that provides access to mountains in the U.S., Canada and Europe but with a new refund policy. Those who haven’t scanned their passes by January 27 can get a full refund under a climate change insurance scheme.
Still, 10 million Americans ski every season, according to industry estimates. U.S. ski resorts attract 50-60 million visitors each year. The ski industry, which includes lift tickets, tours, restaurants and other resort activities, generates $20 billion in revenue annually.
Ware has a lot of money to siphon off. But they’ll need a bit of winter luck to pull it off.
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