Vail Resorts, Inc. (NYSE:MTN) Q1 2023 Earnings Call Transcript

I think what’s happening in terms of our pass holder mix is the progress that we’re making on penetrating that destination addressable market with Epic Day Pass and that is a product that’s designed very specifically to attract and penetrate into that addressable market. And that is — so it’s very good news that we’re making progress there on Epic Day Pass, and we think that, that’s a really valuable guest. And so in terms of our overall pass mix, that’s probably the biggest shifts that we’ve had is the introduction of Epic Day Pass and making progress against that market, that prior to launching Epic Day Pass, we really would not have seen a ton of success with that addressable market, because they were never going to come into an Epic or an Epic Local Pass given the high frequency nature of those products.

Chris Woronka: Okay. Super helpful. And just as a follow-up, I know you mentioned you’re not completely done with hiring yet for the full season, but any surprises positive or negative as you’re going through that process in terms of cost or availability? And then anything new on the longer term employee housing projects or initiatives?

Kirsten Lynch: Yes, I’m really pleased with where we are on recruiting, retention, talent overall. Our investments in the employee experience we’re seeing significant improvements versus where we were last year. Our hiring is ahead of schedule, we have significantly higher levels overall in staff than we did last year. And as I mentioned, hiring is still ongoing as a top priority for our Mountain Resort teams. They are still hiring for some specific roles and we’ll see them continuing to hire through the season as staffing needs occur through the season. I feel very good that we’re on track to have the staff that we need for full operation of lift and mountain train normal operations of some of the ancillary businesses that I shared earlier.

I have noted that one of the biggest challenges to getting fully staffed is affordable housing. We as a company are committed to investing in affordable housing, we have increased our affordable housing options for employees versus last year. And this has been and continues to be a challenge in our market community — in our mountain communities. So there’s ongoing work that we need to do to make progress on this and continue to partner with our communities that they also make it a priority.

Chris Woronka: Okay. Very good. Thanks everyone.

Kirsten Lynch: Thanks, Chris.

Operator: We’ll take our next question from Laurent Vasilescu with BNP Paribas Exane.

Laurent Vasilescu: Good morning. Thank you very much for taking my question. I wanted to follow-up on Ben’s question with regards to ancillary revenue. Michael, should we assume that ancillary spend per visit gets back to pre-COVID levels? What’s actually embedded in guidance? Or are you anticipating based on your commentary about economic uncertainty that it might not come back to the pre-pandemic levels?

Michael Barkin: Thanks, Laurent. We — on ancillary, we look at this at a much more granular level in terms of by resort and whether those guests are destination or local. And so I think one important thing to keep in mind relative to pre-COVID levels in particular is that the resort mix has shifted actually, right, as we incorporated peak resorts and as our Eastern resorts grow, the yield at those resorts is actually lower as you would imagine than at our destination resorts. And so there is going to be a mix shift component to that, when you look at historical financials over time, from this base going forward. Certainly, our goal is to increase attachment over time. That’s certainly one of our goals and every year we look at that as we did this year in terms of guidance of what attachment we think we’ll be able to achieve. And certainly as Kirsten mentioned, adding more destination guests into our Pass program should over time be helpful relative to that.