Friday, October 06, 2006

Vail Resorts Reports Earnings

Increased skier visits, a growth in season pass sales and significant revenue increases in the ski school, dining and rental/retail divisions all contributed to a successful 2006 for Vail Resorts, which announced year-end earnings on Thursday.

Vail Resorts owns Keystone and Breckenridge ski resorts in Summit County, as well as Vail and Beaver Creek in Eagle County, and Heavenly Ski Resort in California.

In fiscal year 2006, which ended July 31, Vail Resorts reported an increase in net income from $23.1 million in 2005 to $45.8 million - a 97.8 percent increase. Mountain revenue increased 14.7 percent over 2005 fiscal year, while lodging revenue fell 20.6 percent, mostly due to the sale of three hotels in the past year. Resort revenue, which is a combination of mountain and lodging revenue, increased 5.3 percent over 2005; real estate revenue dropped 14 percent.

The notable increase in mountain revenue can be attributed to a 5.9 percent increase in skier visits and a 6.4 percent increase in ticket prices, which included a 12.3 percent boost in season pass revenues, said Vail Resorts CEO Rob Katz. Katz linked the company's strong performance to Colorado's heavy early season snowfall last season, on-mountain improvements, including the new Imperial Express SuperChair at Breckenridge, and employees' efforts to satisfy guests.

"In the end, that's why people come back, if they have a good experience," Katz said.

Breckenridge, the second most visited ski resort in the U.S., according to Katz, continues to play a vital role in the company's bottom line

."We've been very pleased with the performance at Breckenridge," Katz said. "It's really got as much or more momentum as any of our resorts."

Katz touted the Peaks of Breckenridge real estate development, which plans 450 high-end residential units and 75,000 square feet of skier services at the base of Peak 7 and Peak 8.

Katz expects the development to be one of the best properties at the resort because of its ski-in, ski-out access to the mountain, and its quick connection to the town of Breckenridge via the new BreckConnect gondola.

The project is currently in the planning and design stages, and sales on the first phase of the Peaks of Breckenridge, which Katz said will be priced "at the top end" of where properties sell in Breckenridge, are scheduled to begin during the upcoming ski season.

"We're anticipating good results from that project given it is really one of the best locations you're going to find at a ski resort that, right now, has tremendous momentum," Katz said.

The highly anticipated eight-passenger BreckConnect gondola, which will transport skiers and riders from the resort's parking lots to Peak 8, and Peak 7 in the future, is still scheduled for a Christmas 2006 opening or shortly thereafter, Katz said.

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