Ski Resorts Could Lose Up To 30% of Their Winter Revenue by Closing Early

SnowBrains | | Industry NewsIndustry News
Vail Resorts
Vail Resorts INC. Credit: Vail Resorts/Facebook

March is typically one of the busiest months for the nation’s ski resorts, as spring breakers flock from across the country to party on the slopes. Resorts that have been forced to close due to the coronavirus pandemic sweeping the globe are coming to terms with the loss of 25% to 30% of their revenue they would normally generate from March through the end of the season

Last season a record of 13.8-million skiers visited Colorado last winter, contributing between $5 billion and $6 billion annually to the economy. Losing a third of that revenue is a massive $2-billion hit to their balance sheets.

Melanie Mills, president, and CEO of Colorado Ski Country USA said: “This is an unprecedented scenario for our industry, for the entire travel industry, for the entire country. And we’re trying to maintain optimism while we deal with some real significant consequences here in the short- and mid-term,” she said.

The companies with the most to lose, rivals Vail Resorts and Alterra Mountain Company, closed 49 resorts between them. More and more resorts have closed across the country, only two remain open now, and many states are taking things into their own hands, notably Colorado who issued a ‘stay at home’ order yesterday.

Breckenridge Ski Resort. Image: Breckenridge

As a destination for tourists, with people constantly coming in and out from across the globe via air travel, it’s probably no surprise that ski counties have been hotbeds for the spread of coronavirus. Summit and Eagle Counties in Colorado, home to some of the busiest ski resorts in the country, have both been linked to multiple cases of coronavirus and the spread of the disease. Mexican authorities are trying to trace up to 400 citizens who returned after a trip to Vail, where a local entertainer died from coronavirus complications, and the town mayor has tested positive. Colorado’s first case was traced back to a skier who visited Keystone and Breckenridge, and an outbreak in Australia was traced back to Aspen, in Pitkin County. Across the border in Utah, the ski resort town of Park City has a per capita infection rate similar to New York City and parts of Italy, Summit County Health Director Rich Bullough said.

“Obviously, you do have lots of visitors coming in from a whole variety of places to a resort town,” Mills said. “These are small communities, but you can get large numbers of folks in one place at one time.”

In a note to shareholders, Vail Resorts reported that they are predicting that March & April 2020 will fall $180 million to $200 million short of their forecast for that time period due to coronavirus and the subsequent closure of all their properties.

Given the closure of our operations as a result of COVID-19, we anticipate that our operating results for March and April will have a negative impact of $180 million to $200 million compared to the Resort Reported EBITDA expectation we had as of March 1, 2020 – Vail Resorts, 3/18/20

Aspen Mountain
Aspen Mountain in the foreground, Aspen Highlands in the background. Photo Credit: Expedia

Both Vail and Alterra will have already banked a huge chunk of change from their pass products, which sell for just shy of $1,000, but the loss of income from food and beverage, retail, rentals, and lessons will hit them hard, especially as they still have bills, and in some cases, rent to pay. A Colorado Senator has written to Congress requesting economic relief for the 122 ski resorts that occupy Forest Service land and still have financial obligations to their landlord. Ski areas pay $50-million annually for the lease of this land.

The US ski industry contributes $55-billion to the country’s economy, according to Bloomberg. So far there has been silence from the multi-resort passes regarding refunds or rebates for unused ski days, and I personally think it’s unlikely we’ll see anything from either of them. To offer refunds, rebates, or even credits for next season would be unprecedented and who knows what floodgates that would open, and what that could lead to.

But, we’re in unprecedented times. I guess anything could happen, right?

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