Extended season at company's Western U.S. operations helped make up for a drop in international visitation

Vail Resorts CEO Rob Katz reported strong earnings during the company's third-quarter investor briefing last week.

But lamented the drop in international visitors to Whistler Blackcomb last season, which contributed to the drop in expected EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) for 2019 to be between $700 and $710 million.

Vail Resorts downgraded its potential earnings from between $718 and $750 million to between $690 and $710 million in March.

At the time, Katz said that that was primarily due to disappointing results from destination visitation in the pre-holiday period and "shortfalls from expectations at our Tahoe resorts and Whistler Blackcomb."

During his June 6 presentation, Katz said Whistler Blackcomb (WB) experienced "relative weakness" in international visitation over the ski season.

He said it is important to note that WB—which was acquired by Vail Resorts back in 2016—has been on an "incredible growth trajectory" over the last four or five years, and this season saw a "moderation of that, which ... is important because we want to make sure that we manage the growth at Whistler appropriately, so we protect the experience there.

"That said, the international experience at Whistler is critical to us, so we have a number of plans that will be in place next year to bring back some of that business that didn't come this year."

Katz added that Vail Resort's recent acquisitions of Hotham Alpine Resort and Falls Creek resort in Victoria, Australia will be "huge" in terms of connecting the Melbourne market to WB via Vail Resort's multi-resort Epic pass.

Vail Resorts doesn't release skier numbers for individual resorts, but overall, the company reported a 14.3% increase in visitation.

"We are pleased with our overall results for the quarter and for the full 2018-2019 North American ski season, with strong growth in visitation and spending compared to the prior year, including a strong finish to the season with good conditions across our western U.S. destination resorts," added Katz.

"Our Colorado, Utah and Tahoe resorts experienced strong local and destination visitation throughout the third fiscal quarter, supported by favourable conditions across the western U.S."

Net income for the quarter—which ended in early April—was $292.1 million, up from $256.3 million for the same period in 2018.

When it comes to pass sales for the 2019-20 season, Katz said Vail Resorts is "very pleased" with results so far.

"Pass sales through May 28, 2019 for the upcoming 2019/2020 North American ski season increased approximately nine per cent in units and 13 per cent in sales dollars, as compared to the prior year period through May 29, 2018," said Katz.

"Our pass sales growth was primarily driven by strong results in our destination markets. In particular, we have very strong growth in our Northeast markets, which are benefiting from the first full year of pass sales with Stowe, Okemo and Mount Sunapee included with unlimited access on the Epic and Epic Local pass products.

"Our local markets continue to show solid growth, driven by favourable results among our local guests in the Whistler Blackcomb region, with particular strength in Seattle with the first full pass sales season with access to Stevens Pass."