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Vail Resorts Closes Victorian Alpine Assets

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After closing ski resorts in North America, international developer and mountain company Vail Resorts shocked the Victorian alpine region by suspending its operations without warning.

The New York Stock Exchange-listed company suspended ski lifts at Falls Creek and Mt Hotham on 9 July, before staff and stakeholders were told it was time to “transition home”.

The Victorian resorts will remain closed until at least 19 August however Vail Resorts operations in Perisher, NSW will stay open.

This was another big blow to the Victorian hospitality sector by Covid-19 which saw metropolitan and Mitchell Shire pubs and restaurants close, however regional areas were not included in the lockdown.

Many of the private businesses in the region—ski instructors, lodge owners and rental stores—will continue to trade through winter.

Despite Vail Resorts' quarterly results down to $152.5 million, compared to $292.1 million in the same period last year, the company deflected concerns that the closures were made purely for financial reasons.

Related: Auctions, New Home Sales Up Despite Lockdown

▲ The Eagle Express opened for three days during Covid-19 at Falls Creek, Victoria.
▲ The chair lift on Falls Creek only opened on July 6, three days before Vail Resorts decided to close operations at its Victorian alpine resorts.

Vail Resorts Australia senior vice president Pete Brulisauer said while there was no doubt restrictions drastically reduced guest numbers, safety was their main concern.

“When we voluntarily closed our resorts in North America, it came at a massive financial cost to the company, one which we accepted because we believed it was the right decision. The same is true here,” Brulisauer said in a letter to employees.

“At the time the Stage 3, stay at home order was issued, our resorts already had many guests from Melbourne and Mitchell on property, representing an unknown risk for future local cases.

“If we remained operational for guests outside of Melbourne and Mitchell Shire, we would be bringing together people from all over the rest of Victoria, which seems directly counter to the guidelines and best safety practices right now.”

Vail Resorts purchased the Victorian ski field leases and related infrastructure in April 2019 for $179 million from the Living and Leisure Australia Group a subsidiary of Merlin Entertainments.

However the Australian ski hills represented only a small portion of the Colorado-based company.

Through subsidiaries it operates 37 mountain resorts and ski areas including Whistler Blackcomb, Northstar, Kirkwood and Breckenridge as well as managing a collection of hotels under the RockResorts Brand.

Vail Resorts chief executive officer Rob Katz said they had suspended cash dividends for six months and expected results for the next quarter to be negatively impacted by lower visitation.

“However, we are not able to fully assess that impact at this time and will not be issuing guidance for the fourth quarter or fiscal year,” Katz said.

“We believe we have developed efficient operating plans to deliver a safe and enjoyable guest experience at our resorts this summer in North America and for the Australian ski season, with the ability to adjust as consumer demand and local guidelines and practices shift.”

NYSE shares for Vail Resorts went on a steep downhill slope from 21 February, remaining low until 3 April when conditions started to improve.

The company's real estate arm Vail Resorts Development Company recently sold a 10-acre site at Park City Mountain—to Utah based developer PEG Companies last year—to build a mixed-use project including a hotel, spa, ski club, residential units and commercial space which were approved by council in February.

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Article originally posted at: https://theurbandeveloper.com/articles/vail-resorts-closes-victorian-alpine-ski-mt-hotham