In a not-so-April-Fools announcement yesterday, Vail Resorts CEO Rob Katz sent out a letter to all their U.S. based employees that left most of them wishing it was in fact just a joke. All of their seasonal employees had already been let go the middle of last month as all the ski resorts in the United States and around the world began closing in rapid succession as news of the deadly coronavirus pandemic spread as quickly as the disease itself.
Now, in an effort to ensure financial stability in years to come, Vail Resorts has furloughed all their full-time employees in the U.S. until it becomes more certain if and when they will be able to open their summer operations across the country. They will not receive pay during this time, however, those who were taking advantage of company health care benefits need not worry about losing them for now as Vail has pledged to cover those costs. Salaried employees will stay on the payroll for the time being, but will be forced to take a percentage based pay cut depending on their pay grade.
Here’s what to expect according to that letter:
- We are furloughing nearly all of our U.S year-round hourly employees as of April 4, 2020, for at least the next one to two months, without pay, but with full healthcare coverage for any impacted employee currently enrolled (the Company will pay all premiums).
- We are implementing a six-month salary reduction for all U.S. salaried employees that starts at 5% for those up to Grade 27, 7.5% for Grades 28/29, 10% for Grades 30/31, and then rises up to a 25% reduction for our most senior executives.
- I am giving up 100% of my salary during the next six months.
- We are eliminating 100% of the cash compensation for members of our Board of Directors for six months.
- We are suspending the Company’s 401(k) match for the next six months.
- We are reducing our capital expenditures by $80-$85 million, with the intention to defer all new chair lifts, terrain expansions, and other mountain improvements, while protecting the vast majority of our maintenance capital spending.
- We are eliminating our June and September dividends to shareholders, saving the Company more than $140 million.
Summit Daily recently reported that both Breckenridge and Keystone had plans to make improvements to their lift service this offseason. Those plans have all been suspended until things improve and operations return to normal. Don’t expect to see any new lifts or improvements for the 2020-2021 season.
Vail Resorts had previously reported that early closures to North American ski resorts would likely cost them between $180 and $200 million dollars in lost revenue.
After Katz announced that he would not be accepting any of his salary during this time and eliminating payments to the board of directors, he also said this to employees in the letter they received:
“I recognize this is very disappointing news to be receiving and I had hoped we would not have to take this action. But with each passing week, the financial consequences have become more apparent. To our year-round hourly employees, I am so disappointed that the vast majority of you have not been able to work these past three weeks and I assure you we will end the furlough as soon as possible once we have clarity on our business reopening. To our year-round salaried employees, who are working from home, in many cases harder than ever, I truly am sorry to have to ask you to give even more by accepting a salary reduction.”
These are truly unprecedented times right now for all ski resorts, their employees and their guests. We hope that Vail Resorts, as well as hundreds of other resorts around the world, will get through this while working together, by staying apart, and persevering through this most difficult challenge.