Vail Resorts Creates Deep Pockets With $1.3 Billion Cash On Hand—What’s Next?

Artur | | Industry NewsIndustry News
Business man skiing
A man skiing in his finest business attire at one of Vail’s Resorts. Photo Credit: Vail Resorts Facebook

Vail Resorts as a company is one of the most polarizing topics in the ski community since skiers vs. snowboarders in the mid-’80s. The ski community is torn on whether to hate them for their mass acquisitions or to love them for the variety and coverage that their season pass offers. Regardless, there is one thing for certain: People are buying passes, and Vail’s cashing in on it.

During their investors call earlier this month, Chief Financial Officer Michael Barkin said:

“We’re very pleased with our overall results for the quarter, and for the full 2020-21 ski season. Results continue to improve as the season progressed primarily as a result to stronger destination visitation at our Colorado and Utah resorts.”

Skiing powder
What skiing at Vail Resort looks like. Photo Credit: Vail Resorts Facebook

Earlier this month, Vail Resorts had an investor call that gave many investors a big smile on their faces. Due to the continued purchases of lift tickets, season passes, and lodging, Vail Resorts has $1.3 billion of cash on hand as of April 30, 2021. This means they have $1.3 billion of cash to spend on distributing either stockholder dividends, reinvesting into their business, or most likely buying out even more ski areas/resorts.

On the topic of acquisitions, during that same investors call CEO Rob Katz says the company: 

“Will continue to be aggressive on mergers and acquisitions coming out of the pandemic.”

Now, $1.3 billion is a lot of cash to go around in when it comes to the ski industry. Back in 2019 Vail made many acquisitions all over the East Coast and midwest where they purchased seventeen ski areas/resorts for a whopping $274 million. Seeing as that’s only a fraction of the cash they have on hand now we can only imagine what ski resorts they have their eyes on now. With this financial flexibility, we could see Vail expand their reach even further out to countries like Japan or New Zealand where they currently own no properties. Perhaps they will even go bigger and try to gain majority control of the massive European market. Or maybe, just maybe, your local ski hill will become a part of the Vail Resorts family.

Vail buys resorts
Promotional poster of Vail’s newest acquisitions in 2019. Photo Credit: Vail Resorts Facebook

Sales were not the only thing that gave Vail Resorts great success during this turbulent year. There were other measures taken to cut down on costs and save as much money as possible to try to weather the storm that was the COVID-19 pandemic.

Rob Katz also said during the investors call that they implemented:

“Disciplined cost controls” and were “Operating our ancillary lines of business at a reduced capacity.”

Looking at the Vail Resorts’ five year trend we can see that even during a global pandemic people are still skiing and still buying Epic Passes. In the past five years, for Fiscal Quarter Three, on average Vail Resorts saw a Net Revenue of $787.72 million, and in Fiscal Quarter Three of 2021, they scored a solid $889.1 million in net revenue even in the midst of a global pandemic and the hard shut down of their biggest resort; Whistler Blackcomb.

With this rapid growth, the pursuit of more resorts, and the massive $1.3 billion cash on hand, who do you think will be bought out in the next few years?

Vail resorts money
The five-year trend of Vail Resorts (MTN) stock price. Photo Credit: Google Finance

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5 thoughts on “Vail Resorts Creates Deep Pockets With $1.3 Billion Cash On Hand—What’s Next?

  1. Vail’s management of Whistler during the pandemic was an “Epic” fail. The BC province went into travel advisory with a plea to even BC residents to ski local. And even when the ski hill was closed for the pandemic they have refused to refund Epic passes. If you take the money but guests can’t come then you have minimal operating costs and therefor you get deep pockets. After 15 years of loving Whistler, never again.

  2. I paid for season pass last year and was unable to use due to covid 19.
    They will not credit me for this year, told me it wasn’t covered under insurance even after I was assured of this when I purchased.
    I would not recommend to a friend.
    I have purchased Icon pass for this year.
    No integrity with Vail

  3. Partially at the expense of skiers that purchased Epic passes, could not use them due to COVID and were not given refunds

  4. One thing I know, Vail wont spend a dime at their red headed stepchild, Kirkwood.

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