Q3 2024 Vail Resorts Inc Earnings Call

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Operator: Please stand by, your program is about to begin. If you need operator assistance today, just press star zero. Good afternoon, and welcome to the Vail Resorts fiscal third quarter 2024 earnings call. This conference is being recorded.

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Operator: Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you need to remove yourself from the queue, press star 2. To ask as many questions as time permits, we ask that you please limit yourself to one question and one follow-up. At any time, should you need operator assistance, press star 0. I will now turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. You may begin.

Good afternoon, and welcome to the Vail resorts fiscal third quarter 2024 earnings call. Today's conference is being recorded currently all callers had been placed in a listen only mode and following management's prepared remarks, the call will be opened up for your questions.

Speaker Change: We'd like to ask a question at that time. Please press star one on your telephone keypad.

Speaker Change: If you need to remove yourself from the queue Press star two.

Speaker Change: You get as many questions as time permits we ask that you. Please limit yourself to one question and one follow up at any time should you need operator assistance Press Star Zero I will now turn the call over to Kirsten Lynch Chief Executive Officer Jose All resorts you may begin.

Kirsten A. Lynch: Thank you.

Kirsten A. Lynch: Good afternoon, everyone. Welcome to our Fiscal 2024 Third Quarter Earnings Conference Call. Joining me on the call this afternoon is Angela Korch, our Chief Financial Officer. Before we begin, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings, and actual future results may vary materially. Forward-looking statements in our press release issued this afternoon, along with our remarks on this call, are made as of today, June 6, 2024, and we undertake no duty to update them as actual events unfold.

Speaker Change: Good afternoon, everyone welcome to our fiscal 2024 third quarter earnings conference call join.

Speaker Change: Joining me on the call. This afternoon is Angela Clark, our Chief Financial Officer.

Kirsten A. Lynch: Today's remarks also include certain non-GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, which, along with our quarterly report on Form 10-Q, was filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com.

Before we begin let me remind you that some information provided during this call may include forward looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings.

Speaker Change: Actual future results may vary materially forward looking statements in our press release issued this afternoon, along with our remarks on this call are made as of today June six 2024, and we undertake no duty to update them as actual events unfold.

Speaker Change: Today's remarks also include certain non-GAAP financial measures reconciliations of these measures are provided in the tables included in our with our press release.

Speaker Change: Which along with our quarterly report on Form 10-Q were filed this afternoon with yes, we see and are also available on the Investor Relations section of our website at Www Dot Vail resorts dotcom.

Kirsten A. Lynch: Let's turn now to our fiscal 2024 third quarter results. Given the unfavorable conditions across our North American resorts for a large portion of the 2023-2024 North American ski season, we are pleased to see improved results in March and April, with visitation across our Western North American resorts in particular benefiting from improved conditions. While past product visitation returned as expected, as we communicated in April, lift ticket visitation did not return to typical historical guest behavior for the spring, primarily at Whistler Blackwell, which was down significantly relative to the prior year period.

Speaker Change: Let's turn now to our fiscal 'twenty 'twenty four third quarter results given.

Speaker Change: Given the unfavorable conditions across our north American resorts for a large portion of the 'twenty to 'twenty three 'twenty 'twenty four North American ski season, we are pleased to see improved results in March and April with visitation across our western North American resorts in particular benefiting from improved conditions.

Speaker Change: While past products visitation returned as expected as we communicated in April lift ticket visitation did not return to typical historical guest behavior for the spring primarily at Whistler Blackcomb.

Speaker Change: It was down significantly relative to the prior year period.

Kirsten A. Lynch: Despite these challenges, the company grew resort net revenue and resort reported EBITDA to record levels in the third quarter, supported by the stability created from our advanced commitment strategy, operations, executional excellence, and continued strong growth and ancillary spending per skier visit across our ski school, dining, and rental businesses at our resort. Our results through the 2023-2024 North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees.

Speaker Change: Despite these challenges the company grew resort net revenue and resort reported EBITDA to record levels in the third quarter.

Speaker Change: Appointed by the stability created from our advanced commitment strategy operations execution excellence and continued strong growth in ancillary spending per skier visits across our ski school dining and rental businesses at our resorts.

Speaker Change: Our results through the 'twenty two 'twenty three 'twenty 'twenty four North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees. The winter season included significant weather related challenges with approximately 28% lower snowfall for fall winter.

Kirsten A. Lynch: The winter season included significant weather-related challenges, with approximately 28 percent lower snowfall for the full winter season across our western North American resorts compared to the same period in the prior year, and limited natural snow and variable temperatures at our eastern U.S. resorts, which comprise our Midwest, Mid-Atlantic, and Northeast resorts. For the 2023-2024 North American and European ski season, total skier visits declined 7.7% as compared to the prior year period, which we believe was driven by a combination of unfavorable conditions and broader industry normalization post-COVID following record visitation in the U.S. during the 2022-2023 ski season.

Steve: Steve then across our western North American resorts compared to the same period in the prior year and limited natural snow and variable temperatures in our eastern U S resorts, which comprise our Midwest mid Atlantic and northeast resorts.

Steve: The 2023 'twenty 'twenty, four north American and European ski season, total skier visits declined 7.7% as compared to the prior year period, which we believe was driven by a combination of unfavorable condition and broader industry normalization post COVID-19 following record visitation and the.

Steve: During the 2022 2023 ski season.

Kirsten A. Lynch: Skier visitation from lift ticket guests, which is refundable and not committed in advance of the season, was particularly impacted, declining 17% compared to the prior year period. However, despite the decline in visitation, ancillary spending was strong across our ski school, dining, and rental businesses at our resorts. Resort net revenue for the second and third quarter combined period increased 1%, and resort reported EBITDA increased 6% over the prior year, supported by our advanced commitment strategy, strong growth in guest ancillary spending per visit, and continued cross-discipline.

Steve: Skier visitation from lift ticket guest which is refundable and not committed in advance of the season was particularly impacted declining 17% compared to the prior year period.

Steve: Despite the decline in visitation ancillary spending was strong across our ski school dining and rental businesses at our resorts rose.

Resort net revenue for the second and third quarter combined period increased 1% and resort reported EBITDA increased 6% over the prior year.

Steve: Imported by our advanced commitment strategy strong growth and just ancillary spending per visit and continued cost discipline.

Kirsten A. Lynch: Now, I would like to turn the call over to Angela for further discussion.

Speaker Change: Now I would like to turn the call over to Angela to further.

Angela Clark: For 2020 for outlook.

Angela Korch: Thanks, Kirsten, and good afternoon, everyone. As Kirsten mentioned, we were pleased to see improved results in March and April. Net income attributable to Vail Resorts was $362 million, or $9.54 per diluted share, for the third quarter of fiscal 2024, compared to net income attributable to Vail Resorts of $325 million, or $8.18 per diluted share, in the prior year. Net income for the third quarter of fiscal 2024 includes approximately $37 million of pre-tax expense associated with a change in the estimated fair value of the contingent consideration liability related to our Perk City Resort lease, compared to approximately $46 million of pre-tax expense in the third quarter of the prior year.

Angela Clark: Thanks, Kristen and good afternoon, everyone.

MS. Kirsten mentioned, we were pleased to see improved results in March and April net income attributable to Vail resorts was $362 million or $9.54 per diluted share for the third quarter of fiscal 2024 compared to net income attributable to vail resorts of $325 million or $8 18.

Angela Clark: Cents per diluted share in the prior year.

Angela Clark: Net income for the third quarter of fiscal 2024 includes approximately $37 million pretax expense associated with the change in the estimated fair value of the contingent consideration liability related to our park city resort lease compared to approximately $46 million of pre tax expense in the third quarter of the prior year.

Angela Clark: Additionally, net income for the third quarter of fiscal 2024 and fiscal 2023 includes the after tax effective acquisition integration related expenses of approximately $1 million and $100000 respectively.

Angela Korch: Additionally, net income for the third quarter of fiscal 2024 and fiscal 2023 includes after-tax effective acquisition and integration related expenses of approximately $1 million and $100,000, respectively. Now, turning to our outlook for fiscal 2024. While late-season results improved, we now expect resort reported EBITDA to be between $833 million and $851 million on a comparable basis with our prior guidance issued March 11, 2024, which included $4 million in acquisition-related expenses specific to Crown Montana but excluded the closing costs, operating results, and integration expenses associated with Crown Montana. The reduction relative to the guidance provided on March 11, 2024, is primarily from lift ticket visitation, not returning to typical historical spring behavior as expected in the March and April period.

Angela Clark: Now turning to our outlook for fiscal 2024.

Speaker Change: Well they see other herself improved we now expect resort reported EBITDA to be between $833 million and $851 million on a comparable basis with our prior guidance issued on March 11th 2024, which included $4 million of acquisition related expenses specific to Crown Montana, but.

Speaker Change: Floated the closing cost operating results and integration expenses associated with Carlin.

The reduction relative to the guidance provided on March 11, 2024, primarily from lift ticket presentation not returning to typical historical behavior as expected in March and April period, primarily it was a black hole.

Angela Korch: Primarily, it was a blackout, along with lowered expectations for the fourth quarter of $9 million, primarily related to the demand outlook for our Australian resorts. In addition, with the closing of the acquisition, we now expect Crown Montana to contribute negative $12 million of resort reported EBITDA for fiscal 2024, including negative $9 million from the acquisition, closing, and integration expenses and negative $3 million from operating results in the fourth quarter. Including the full impact of Crown Montana, the company now expects net income attributable to Vail Resorts to be between $224 million and $256 million, and Resort reported EBITDA to be between $825 million and $843 million.

Speaker Change: Along with lowered expectations for the fourth quarter of $9 million, primarily related to the demand outlook for our response trailing resorts.

Speaker Change: In addition, with the closing of the acquisition, we now expect from Montana to contribute negative $12 million of resort reported EBITDA for fiscal 2024, including negative $9 million from the acquisition closing and integration expenses and negative $3 million from operating results in the fourth quarter.

Speaker Change: Including the full impact to come on time at the company now expects net income attributable to Vail resorts to be between $224 million and $256 million and resort reported EBITDA will be between $825 million and $843 million.

Angela Korch: Resort Ibidab margin is expected to be approximately 28.9% at the midpoint of the guidance range, and excluding the impact of Cron-Montana, Resort Ibidab margin would be 29.2% in fiscal 2024 at the midpoint of the guidance range. The updated outlook for fiscal 2024 assumes a continuation of the current economic environment and normal weather conditions and operations throughout the Australian ski season and North American summer season, both of which begin in our fourth quarter.

Speaker Change: Resort EBITDA margin is expected to be approximately $28 nine person at the midpoint of our guidance range and excluding the impact of crime, Montana resort EBITDA margin would be 29, 2% in fiscal 2024 at the midpoint of the guidance range.

Speaker Change: The updated outlook for fiscal 2024 assumes a continuation of the current economic environment and normal weather conditions and operations throughout the Australian ski season, and North American summer season, both of which are again on our fourth quarter.

Angela Korch: The guidance assumes an exchange rate of $0.73 between the Canadian dollar and the U.S. dollar related to the operations of Whistler Blackcomb in Canada, and an exchange rate of $0.66 between the Australian dollar and the U.S. dollar related to the operations of Herrscher, Falls Creek, and Hawthorne in Australia, and an exchange rate of $1.10 between the Swiss franc and U.S. dollar related to the operations of Andermont-Soudroon in Cromontana in Switzerland.

Speaker Change: The guidance assumes an exchange rate of 73 times between the Canadian dollar and U S dollar related to the operations of Whistler Blackcomb in Canada, and an exchange rate of 66.

Speaker Change: Between the Australian dollar and the U S dollar related to the operations of parish or Falls Creek and <unk> in Australia.

Speaker Change: And an exchange rate of a $1 10 times between the Swiss franc and U S dollar related to the operations of <unk> syndrome, and crop Montana in Switzerland.

Angela Korch: Our balance sheet remains strong, including total cash and revolver availability as of April 30, 2024, of approximately $1.3 billion, with $705 million of cash on hand and $625 million of combined revolver availability across our credit agreement. As of April 30, 2024, our net debt was 2.4 times trailing 12 months total reported EBITDA. In addition, we opportunistically extended the maturity dates on a substantial amount of our debt subsequent to quarter end.

Speaker Change: Our balance sheet remains strong, including total cash and revolver availability as of April 32024 of approximately $1.3 billion with $705 million of cash on hand, and $625 million of combined revolver availability across our credit agreements.

Speaker Change: As of April 30 of 2024, our net debt was two four times trailing 12 months total reported EBITDA.

Speaker Change: In addition, we opportunistically extended the maturity dates on a substantial amount of our debt subsequent to quarter end.

Angela Korch: On May 8, 2024, the company completed an offering of $600 million aggregate principal amount of 6.5% senior notes due 2032. We used the net proceeds from these notes to fund the redemption of the entire amount of $600 million, the six and a quarter percent senior notes due 2025 on May 15, 2024. Additionally, the company completed an amendment of its Vail Holdings credit agreement to extend the maturity of the $969 million term loan and $500 million revolver from 2026 to 2029.

Speaker Change: <unk> 2024, the company completed an offering of $600 million aggregate principal amount of six 5% senior notes due 2032.

Speaker Change: We used the net proceeds from these notes to fund the redemption of the entire amount of $600 million. The 6.25% senior notes due 2025 on may 15th 2024.

Speaker Change: Additionally, the company completed an amendment of its fail holdings credit agreement to extend the maturity of the $969 million term loan and $500 million revolver from 2026 to 2029.

Angela Korch: The company also repurchased approximately 0.3 million shares at an average price of approximately $217 for a total of $75 million during the quarter. For the nine months ended April 30, 2024, the company repurchased 0.6 million shares for approximately $125 million. We have approximately 0.8 million shares remaining under our authorization for share repurchases and remain focused on returning capital to shareholders while always prioritizing the long-term value of our shares. Additionally, the company declared a quarterly cash dividend on Vail Resorts' common stock of $2.22 per share. The dividend will be payable on July 10, 2024, to shareholders of record as of June 25, 2024.

Speaker Change: The company also repurchased approximately 0.3 million shares at an average price of approximately $217 for a total of $75 million during the quarter.

Speaker Change: For the nine months ended April 32024, the company repurchased 056 million shares for approximately $125 million.

Speaker Change: We have approximately 0.8 million shares remaining under our authorization for share repurchases and remain focused on returning capital to shareholders, while always prioritizing long term value of our shares.

Speaker Change: Additionally, the company declared a quarterly cash dividend on Vail resorts common stock $2.22 per share the dividend will be payable on July 10, 2024 to shareholders of record as of June 25th 2024.

Angela Korch: We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high-return capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. As previously announced, on May 2, 2024, the company closed on the purchase of its second European resort, Crown Montana, for a purchase price of 97.2 million Swiss francs, or 106.8 million U.S. dollars.

Speaker Change: I continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience high return capital projects and strategic acquisition opportunities and returning capital to our shareholders through our quarterly dividend and share repurchase program.

Speaker Change: As previously announced on May 2nd 2024, the company closed on the purchase of our second European resort from Montana for a purchase price of $97 2 million Swiss francs, or $106 8 million U S dollars after adjustments for certain agreed upon items.

Angela Korch: After adjustments were certain agreed-upon items, including a $4 million Swiss franc reduction in the purchase price to account for the timing of closing after the winter season. The company acquired an 84% ownership stake in the entity that controls and operates all the resort lists and supporting mountain operations, including four retail and rental locations. The company also acquired full ownership of Sportlife AG.

Speaker Change: Including a 4 million Swiss franc reduction in the purchase price to account for the timing of closing after the winter season.

Speaker Change: The company acquired an 84% ownership stake in the entity that controls and operates all of the resorts Liffe and supporting mountain operations.

Speaker Change: <unk> for retail and rental locations.

Speaker Change: The company also acquired full ownership of sport life E G.

Angela Korch: Increasing from the previously announced 80% ownership stake, which operates one of the ski schools located at the resort, and full ownership of 11 restaurants located on and around the mountain. This world-class resort spans over 1,400 meters, or approximately 4,600 feet, of skiable vertical terrain and 140 kilometers, or approximately 87 miles, of trails. Located in the Lake Canton of Switzerland, Cromontana is approximately two and a half hours from Geneva and less than four hours from Milan and Zurich.

Speaker Change: Increasing from the previously announced 80% ownership stake, which operates one of the ski School book ended up resort and full ownership of 11 restaurants, located on and around the mountain.

Speaker Change: This world class resort spans over 1400 meters or approximately 4600 feet ischium old vertical terrain and 140 kilometers approximately 87 miles of trails.

Speaker Change: Located in the La Canada, Switzerland, Chrome Montana's, approximately two and a half hours from Geneva, and less than four hours from Milan in Zurich.

Angela Korch: The valuation for the entirety of the resort operations was 118.5 million Swiss francs, including approximately 7 million Swiss francs of debt that will remain in place, and adjusted for purchase price adjustments to account for seasonality and closing timing. Vail Resorts anticipates that the resort will generate approximately 5 million Swiss francs of resort reported EBITDA in the fiscal year ending July 31st, 2025, the first full year of operations under the company's

Speaker Change: Evaluation for the entirety of the resort operations with $118 5 million Swiss francs, including approximately 7 million Swiss francs of that that will remain in place.

Speaker Change: And adjusted for purchase price adjustments to account for seasonality and closing timing.

Speaker Change: Vail resorts anticipates that the resort will generate approximately 5 million Swiss francs of resort reported EBITDA in the fiscal year ending July 31st 2025.

Speaker Change: The first full year of operations under the company's ownership.

Angela Korch: We expect significant EBITDA growth over time from the inclusion of the resort on the Epic Pass products, network synergy, and investments in the guest experience. Subject to the timing of capital project approvals and completion, Vail Resorts is planning to invest approximately 30 million Swiss francs over the next five years in one-time capital spending to elevate the guest experience. Normal annual maintenance capital spending is expected to be approximately 3 million Swiss francs.

Speaker Change: We expect significant EBITDA growth over time from the inclusion of the resort on the epic pass products network synergies and investments in the guest experience.

Speaker Change: Subject to the timing of capital project approvals and completion that was the worst is planning to invest approximately 30 million Swiss francs over the next five years and one time capital spending to elevate the guest experience.

Speaker Change: Normal annual maintenance capital spending is expected to be approximately 3 million Swiss francs.

Kirsten A. Lynch: Now, I'll turn the call back over to Kirsten.

Speaker Change: Now I'll turn the call back over to Kirsten.

Kirsten A. Lynch: Thank you, Angela. Past product sales through May 28, 2024 for the upcoming 2024-2025 North American ski season decreased approximately 5% in units and increased 1% in sales dollars as compared to the period in the prior year through May 30, 2023. Past sales dollars are benefiting from the 8% price increase relative to the 2023-2024 season, partially offset by the mixed impact from the growth of Epic Day past products. Past product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.73 between the Canadian dollar and U.S. dollar in both periods, per Whistler Blackcomb past sales.

Kirsten A. Lynch: Thank you Angela pass product sales through May 'twenty, eight 'twenty 'twenty four for the upcoming 'twenty 'twenty four 'twenty 'twenty five North American ski season decreased approximately 5% in units and increased 1% in sales dollars as compared to the period in the prior year through may 30th 2023.

Our sales dollars are benefiting from the 8% price increase relative to the 'twenty two 'twenty three 'twenty 'twenty four season, partially offset by the mix impact from the growth of epic day pass products.

Kirsten A. Lynch: Product sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of 73 cents between the Canadian dollar and U S. Dollar in both periods for Whistler Blackcomb pass sales.

Kirsten A. Lynch: Past product sales for this past season, the 2023-2024 North American ski season, have grown 62% in units and 43% in sales dollars over the past three years. Past product pricing has increased 25% from spring 2021 to spring 2024. We believe the spring pass sales results for guests committing for winter 2024-2025 were impacted by the industry decline in visitation following a record 2022-2023 U.S. ski season. The decline in units relative to the prior year's season-to-date results was primarily driven by a decline in new pathholders.

Kirsten A. Lynch: <unk> product sales for this past season, the 'twenty to 'twenty three 'twenty 'twenty four North American ski season had grown 62% in units and 43% in sales dollars over the past three years.

Kirsten A. Lynch: Product pricing has increased 25% from spring 2021 to spring 2024.

Kirsten A. Lynch: We believe the spring pass sales results for guests committing for winter of 'twenty 'twenty four 'twenty 25 were impacted by the industry decline in visitation. Following a record 2022 2023 U S ski season.

Kirsten A. Lynch: Decline in units relative to the prior year season to date results was primarily driven by a decline in new pass holders. The primary source of new pass holders in the spring our lift ticket guest that visited in the prior winter season. This past season lift ticket visitation declined due to.

Kirsten A. Lynch: The primary source of new passholders in the spring are lift-ticket guests that visited in the prior winter season. This past season, lift-ticket visitation declined due to weather and did not fully return to typical behavior after conditions improved, creating a smaller audience as the primary source of new passholders in the spring. For renewing passholders, the company achieved strong unit growth among the company's most loyal tenured renewing passholders, guests who have had a pass for three years or more. Spring renewals for lower-tenured passholders, including first-time and second-year passholders, demonstrated lower renewal rates in the spring, which may reflect delayed decision-making to the fall.

Kirsten A. Lynch: Weather and did not fully returned to typical behavior after conditions improved creating a smaller audience as the primary source of new pass holders in the spring.

Kirsten A. Lynch: For renewing pass holders the company achieved strong unit growth among the company's most loyal tenured renewing pass holders guest who has had a pass for three years or more.

Kirsten A. Lynch: Spring renewals for lower tenured pass holders, including first time and second year pass holders demonstrated lower renewal rates in the spring, which may reflect delayed decision making to the fall.

Kirsten A. Lynch: Overall, Renewing Passholder Product Net Migration was positive. An epic day passed, product experienced unit growth, and modest unit growth driven by the strength of renewing pass holders. The majority of our past selling season is ahead of us, and we believe the full year past unit and sales dollar trends will be relatively stable as compared to the spring results. We will provide more information about our past sales results in our September 2024 earnings release.

Kirsten A. Lynch: Overall renewing pass holder product net migration was positive and epic day pass product experienced unit growth modest unit growth driven by the strength in renewing pass holders.

Kirsten A. Lynch: The majority of our past selling season is ahead of us and we believe the full year pass unit and sales dollar trends will be relatively stable as compared to the spring results. We will provide more information about our pass sales results in our September 2024 earnings release.

Kirsten A. Lynch: Epic Australia Pass sales end on June 12, 2024, and are down approximately 22% in units through May 29, 2024, which we believe is primarily a result of the historically poor conditions during the 2023 ski season in Australia. The Epic Australia Pass has grown 43% in units over the past three years.

Kirsten A. Lynch: I think Australia pass sales and on June 12, 2024, and are down approximately 22% in units through May 29, 2024, which we believe is primarily a result of the historically poor conditions during the 20th twenty-three ski season in Australia, The epic Australia pass has grown 43% in units.

Kirsten A. Lynch: For the past three years.

Kirsten A. Lynch: Our commitment to reinvesting in our resorts and the guest experience remains one of our highest priorities. As previously announced, we expect our capital plan for calendar year 2024 to be approximately $189 million to $194 million, excluding $13 million of incremental capital investments in premium fleet and fulfillment infrastructure to support the official launch of MyEpicGear for the 2024-2025 winter season at 12 destination and regional resorts across North America, $11 million of growth capital investments at Andermont Sudrun, $1 million of reimbursable capital and investments at Crown Montana, which we expect will include $3 million of maintenance capital expenditures and $2 million associated with integration activities, including MyEpicGear Premium Fleet, Fulfillment Infrastructure Capital, One-Time Investments, and Investments at Crown Montana. Our total capital plan for calendar year 2024 is now expected to be approximately $219 million to $224 million.

Kirsten A. Lynch: Our commitment to reinvesting in our resorts and the guest experience remains one of our highest priority.

Kirsten A. Lynch: Previously announced we expect our capital plan for calendar year, 2024 to be approximately $189 million to $194 million, excluding $13 million of incremental capital investments and premium fleet and fulfillment infrastructure to support the official launch of myopic gear for the 'twenty 'twenty four 'twenty 'twenty four.

Kirsten A. Lynch: Five winter season at 12 destination and regional resorts across North America $11 million of growth capital investment that undermine the drone $1 million of Reimbursable capital and investments at Crown, Montana, which we expect will include $3 million of maintenance capital expenditures and $2 million associated with inner.

Kirsten A. Lynch: Ration activities.

Kirsten A. Lynch: Including my epic year premium fleet fulfillment infrastructure capital one time investments in investments at Crown, Montana, Our total capital plan for calendar year 'twenty 'twenty four is now expected to be approximately $219 million to $224 million.

Kirsten A. Lynch: In closing, we greatly appreciate the loyalty of our guests that visited across all of our mountain resorts this past season and the continued loyalty of our pass holders that have already committed to next season. With the North American and European ski season coming to an end, I would especially thank our frontline employees for their passion and dedication to delivering an experience of a lifetime to our guests. Our employees are the core of Vail Resorts' mission to create an experience of a lifetime, and we are all looking forward to the ski and ride season at our three mountain resorts in Australia. At this time, Angela and I will be happy to answer your questions. Operators, we are ready for questions.

Kirsten A. Lynch: In closing we greatly appreciate the loyalty of our guests that visited across all of our mountain resorts. This past season, and the continued loyalty of our pass holders that have already committed to next season.

Kirsten A. Lynch: North American and European ski season, coming to an end I would like to especially thank our frontline employees for their passion and dedication to delivering an experience of a lifetime to our guests. Our employees are the core of Vail resorts mission to create an experience of a lifetime and we are all looking forward to the ski and ride season at our three mountain resorts in.

Kirsten A. Lynch: Trailing up.

At this time, Angela and I will be happy to answer your questions.

Speaker Change: Operator, we are ready for questions.

Operator: Thank you. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. Again, please limit yourself to one question and one follow-up. And we'll take our first question from Shaun Kelley with Bank of America.

Speaker Change: Thank you at this time, if you wish to ask a question. Please press star one on your telephone keypad, you may remove yourself from the queue by pressing star two again, please limit yourself to one question and one follow up and we'll take our first question from Shaun Kelley with Bank of America.

Shaun Clisby Kelley: Hi, good morning, everyone, or good evening, everyone. Thank you for taking the time to answer my question. Kirsten, Angela, just wondering if we could, you know, dig a little deeper on some of the past behavior that you saw. You know, specifically wondering if you could just give us a little bit of insight on, you know, what feedback are you hearing from the guests that are in that kind of new past homework cohort and in the sort of, you know, that, I guess, younger cohort that didn't renew this period?

Shaun Clisby Kelley: Hi, good morning, everyone or good evening, everyone. Thank you for taking my question Cherokee and Angela just wondering if we could dig a little deeper on the past behavior that you saw I'm, specifically wondering if you could just give us a little bit of insight on.

Speaker Change: What what what feedback are you hearing from the guests that are in that kind of new password or cohort and in the sort of you know.

Speaker Change: Does that I guess younger cohort that didn't renew this period, because historically, you've done pretty well on pulling forward incentivizing activity earlier. This past season. So we're getting some concerns that whatever trends, you're seeing now could actually deteriorate a little bit so maybe its a behavior could give us some sense as to why maybe they they waited a little.

Shaun Clisby Kelley: Because historically, you've done pretty well with pulling forward and incentivizing activity earlier in this past L season. So we're getting some concerns that, you know, whatever trend you're seeing now could actually deteriorate a little bit. So, you know, maybe some behavior could give us some sense as to why maybe they waited a little bit. Just kind of what are you hearing back from, you know, maybe some, you know, some feedback from, you know, people as you've dug into the behavior that you saw in the early past period here?

Speaker Change: But just what are you kind of what are you hearing back from maybe some you know.

Speaker Change: So feedback from people as you've.

Speaker Change: Doug into behavior that you saw in your lead in yearly cost very good.

Kirsten A. Lynch: Yeah, thank you, Shaun. I think what we see with our renewing pass holders is, you know, different behavior depending on their tenure. I was very pleased to see that our most loyal and tenured renewing pass holders, those that are three years or more, had strong unit growth. However, when we look at the renewals for those lower tenured pass holders, first time pass holders, or second year pass holders, as I mentioned, they did demonstrate lower renewal rates.

Sean: Yeah. Thank you Sean I think what we see with our renewing pass holders is no different behavior, depending on their tenure very pleased to see that our most loyal and tenured renewing pass holders. Those that are three years or more had strong unit growth when we look at the renewal.

Sean: For those lower tenured pass holders first time pass holders or second year of pass holders as I mentioned, they did demonstrate lower renewal rate. This particular audience, we tend to see it can be impacted by conditions in their decision, making and the timing of when they.

Kirsten A. Lynch: This particular audience we tend to see can be impacted by conditions in their decision making and the timing of when they renew because they have been, in many cases, accustomed to making their decisions about their ski vacations closer to the season. When we look at this group, we tend to see that there is still a strong volume of them that make decisions in the fall. The guest experience scores that we have among this audience are quite strong.

Sean: Renew because they had been in many cases are accustomed to making their decision about their ski vacations closer to the season. When we look at this group Ah we tend to see that there is still a strong volume of them that make decisions in the fall.

Sean: The guest experience scores that we have among this audience are quite strong. So I can't tell you with certainty what decision, making they're going to have what I would say is that it is possible that there is a delayed decision, making because we have seen that behavior with this audience in the past.

Kirsten A. Lynch: So I can't tell you with certainty what decision making they're going to have. What I would say is that it is possible that there is a delayed decision making because we have seen that behavior with this audience in the past.

Speaker Change: Yeah, that's helpful and thank you for the extra color there and then my second my follow up would just be you mentioned in the release a little bit around post COVID-19 normalization right and so a lot of the activity here feels like it was connected to <unk>.

Speaker Change: Actually with the new castle or just around visitation, you didn't have that base of customers to sell to you and obviously a lot of that traces back to weather, but the post COVID-19 normalization pieces is.

Speaker Change: A different doctor. So could you just elaborate on what you meant by that and kind of again, there's a lot of crosscurrents here. So just how do you kind of.

Kirsten A. Lynch: crosscurrents here. So just how do you kind of, you know, separate the two if both of those are factors? Yeah.

Speaker Change: Separate the two if both of those are factors.

Kirsten A. Lynch: Yes, thanks for the question, Shaun. We do believe this past season overall that conditions and a post-COVID normalization are both material factors impacting this season, and we can see that when we look at conditions and guest behavior when conditions were challenging versus when conditions improved and where results improved or did not improve, or the behavior was there. And we mentioned this before when it came up in March that it's very hard to say if there's a normalization given that the season's not over. With the season being over, it's easier for us to look back and be able to see where the behavior recovered and where it did not with conditions to say that normalization is a component of that.

Sean: Yeah. Thanks for the question, Sean We do believe this past season, the overall debt conditions and a post COVID-19 normalization or both material factors impacting this season and we can see that when we look at the <unk>.

Sean: And and the guest behavior when conditions were challenging versus when conditions improve.

Sean: And where results improved or did not improved or the behavior was there.

Sean: And we mentioned this before when it came up in March that very hard to say, if there's a normalization given their season is not over with the season being over its easier for us to look back and be able to see where the behavior recovered in where it did not with condition to say that normalization as a component of that.

Kirsten A. Lynch: When we look at the impact on spring pass sales, as I mentioned, the single biggest impact on our spring pass sales is new pass holders, and that is driven by lift ticket guests. And that behavior or that the size of that audience is down significantly, which is impacting our ability to convert them into new pass holders. I would also highlight, in this context, that that is not the only source of new pass holders.

Sean: When we look at the impact on spring pass sales as I had mentioned that the single biggest impact on our spring pass sales is new pass holders and that is driven by less ticket gas and that behavior or that at our size of that audience is down significantly.

Sean: I can't leave.

Sean: It is impacting then our ability to convert them into new pass holders.

Sean: I would also highlight though and in this context that that is not the only source of new pass holders.

Kirsten A. Lynch: It is the primary source of new pass holders in the spring coming off of the season; conversion to Lyft from Lyft ticket gas is the primary source as we head into fall, though. We also see new passholders being driven by prospects, as well as lapsed passholders and lapsed lift ticket guests. But for this springtime period, we do believe that industry normalization is impacting pass sales because it's impacting the size of that audience.

Sean: It is the primary source of new pass holders in the spring coming off of a season conversion to lift from lift ticket gas as the primary source as we head into fall though.

Sean: We also see new pass holders being driven by prospects as well as lapsed pass holders and lapsed lift ticket guests, but for the spring time period, we do believe that the industry normalization is impacting pass sales because it's impacting the size of that audience. We also look.

Kirsten A. Lynch: We also look at, well, pass holders who visited during good conditions and during poor conditions and what their conversion rate to a pass is, and we can see that conditions are a factor, but they are not the primary factor.

Kat: Kat well pass holders, who visited during good conditions and during poor conditions and what is their conversion rate to our past and can see that conditions are a factor, but they are not the primary factor.

Sean: Yes.

Jeffrey Austin Stantial: Thank you. Our next question comes from Jeff Stantial with Stiefel.

Thank you. Our next question comes from Jeff <unk> with Stifel.

Kirsten A. Lynch: Hey, great afternoon, Kirsten, and Angela, thanks for taking our questions. Maybe, starting off, I'll just try to ask Shaun's first question a slightly different way.

Speaker Change: Hey, great. Good afternoon, thanks for taking our questions maybe starting off on I'll just try to ask Sean's first question slightly different way. So curious you talked a lot about soft.

Kirsten A. Lynch: So Kirsten, you talked a lot about soft lift ticket demand this past season impacting your conversion from lift to epic passes during the spring selling season. To me, that seems like, you know, more of a spring headwind and going to ease up as the selling season progresses. You also talked about the potential for some conversions of less tenured pass holders to accelerate in the summer and fall selling seasons.

Speaker Change: Lift ticket demand this past season impacting your conversion from Lyft to epic passes during the spring selling season to me that seems like.

Speaker Change: More and more of a spring headwind and could ease off as the selling season progressed as you also talked about potential for some conversions of less tenured pass holders to accelerate.

Speaker Change: The summer and the fall selling season. So I guess can you just help us reconcile those two comments with the expectation for trends to remain stable through the levels you just reported.

Kirsten A. Lynch: Can you just help us reconcile those two comments with the expectation for trends to remain stable at the levels you just reported through the remainder? In other words, is it fair to conclude you're being a bit conservative with that comment? Any color there would be helpful. Thanks.

Speaker Change: Through the remainder in other words is it fair to conclude you're being a bit conservative with that comment just any color there would be helpful. Thanks.

Jeff: Thanks, Jeff Yeah, I think there are a lot of different.

Kirsten A. Lynch: Yeah, I think there are a lot of different moving factors that happen, as you've highlighted in the spring versus the fall in terms of behavior. And I did highlight that it is possible that some of the early 10 year pass holders, those first time pass holders or second year pass holders, shift their decision making later in the season, as we have seen in the past. I think it is important for us to highlight that the U.S. ski industry's decline of eight percent, and our decline in visits of eight percent, which is consistent with that, does reduce the pool of guests to transition onto a path.

Speaker Change: Moving factors that happen as you highlighted in the spring versus the fall in terms of behavior.

Speaker Change: And I did highlight and it is possible that some of the early tenure pass holders those first time pass holders or second your pass holders.

Shift their decision, making later in the season as we have seen that in the past I think it is important for us to highlight that the U S ski industry decline of 8% our decline in visits of 8%, which was consistent with that does reduce.

Speaker Change: The pool of.

Kirsten A. Lynch: And we do believe that it is having an impact and will have an impact through the rest of the selling cycle, which is why we said that we believed that it would remain consistent. There are ebbs and flows, we are seeing a negative impact from lift tickets here in the spring, but it's possible we will actually be successful with lapsed and prospect customers in the fall. But overall, right now, we are not projecting any material improvement for the remainder of the selling cycle.

Speaker Change: Gas to transition into a path.

Speaker Change: And we do believe that it is having an impact and will have an impact through the rest of the selling cycle, which is why we said that we believed that it would remain consistent there are ebbs and flows where we are seeing a negative impact from lift tickets here in the spring. It is possible we will actually be successful.

Speaker Change: With lapsed and prospect in the fall.

Speaker Change: But overall right now we are not projecting a material improvement for the remainder of the selling cycle.

Kirsten A. Lynch: Okay, perfect. That's very helpful, commentator. Thank you for that, Kirsten.

Speaker Change: Okay perfect Thats very helpful commentary. Thank you for that Youre, saying that is it.

For my follow up I wanted to double click on some of the.

Speaker Change: So the softness in the lift ticket visit T shirt and later in the season this year.

Kirsten A. Lynch: And for my follow-up, I wanted to double-click on some of the... softness in the lift ticket visitation later in the season this year. You called out specifically Whistler Blackcomb as showing the most headwinds here. I guess, can you expand on that a little bit more? Is there anything in terms of nuances to that resort that might explain it? Is it higher fly-to traffic? Just anything that sort of explains the nuances that you're seeing with that resort versus more of your U.S. resorts?

Speaker Change: Called out specifically with their black home.

Speaker Change: <unk> is showing the most the most headwinds here I guess could you expand on that a little bit more is there anything in terms of nuances to that resort that that might explain it.

Speaker Change: Fly to provide to traffic just just anything that's.

Speaker Change: Sort of explains the nuances that you are seeing with that restore versus versus more of a U S resorts.

Kirsten A. Lynch: Yeah, when I

Kirsten A. Lynch: Yes, when we were looking at conditions, we saw conditions improve in our U.S. Rockies resorts earlier than we did at Whistler Blackcomb, but those results stayed very challenging for longer.

Speaker Change: Yes, when we were looking at conditions, we saw you know conditions improve and our U S Rockies resorts.

Speaker Change: Earlier than we did at Whistler Blackcomb those results stayed very challenge.

Speaker Change: For longer so that's number one number two.

Kirsten A. Lynch: So that's number one. Number two, that resort is a destination, and destination visitation is very important to the success of that resort. And three, lift ticket visitation is very susceptible to weather conditions. When we started heading into spring, we had noted that conditions were improving, and we expected past visitation because we have the data and we can tell who's pre-committed, and we believe that then those guests will use their pass. And we saw that actually happen, Jeff, that the pre-committed guests returned as we expected them to.

Speaker Change: This that resort is destination visitation is very important to the success of that resorts and three lift ticket visitation is very susceptible to weather condition. When we started heading into spring. We had noted that conditions are improving and we expected pass visitation because.

We have the data and we can tell who's pre committed that we believe that then those gas will use their path and we saw that actually happened Jeff that the pre committed gas returned as we expected them to.

Kirsten A. Lynch: On lift tickets, we didn't expect that we were recouping what had been lost earlier in the season. We had expected typical spring historical guest behavior, and we did not see that with the improved conditions. And in particular, at Whistler, where the conditions dragged on longer and the lift ticket visitation is highly susceptible to conditions and variables, which is why we're very oriented to pass, we see the impact. I think, you know, there are also border restrictions that impacted Whistler Blackcomb during that post-COVID era, and there could be potentially some normalization impacts happening there as well.

Speaker Change: Unless tickets, we didnt expect that we were recouping what had been lost earlier in the season, we had expected typical spring historical guest behavior, and we did not see that with the improved conditions and in particular at Whistler weather conditions dragged on longer.

And the lift ticket visitation is highly susceptible to conditions and variable, which is why we're very oriented to pass we'd see the impact I think you know there's also.

Speaker Change: Border restrictions that impacted Whistler blackcomb during that post Covid era.

Speaker Change: And could be potentially some normalization impacts happening there as well.

Thanks.

Operator: Thank you. Our next question comes from Ben Chaiken on Me Too.

Speaker Change: Thank you. Our next question comes from Ben Chaiken with Nishu.

Benjamin Nicolas Chaiken: Hey, how's it going? You noted the decline in passes was largely driven by lower new pass holders, with that pool being primarily window ticket guests. I guess it's very reasonable that the pool is smaller given the poor weather, but when you look at the penetration of that pool of single-day window guests who subsequently decided to purchase a pass, was it consistent with what you would have expected just at a smaller scale? Better or worse? Thanks.

Hey, How's it going you noted the decline in pass throughs was largely driven by lower new pass holders with that pool being primarily window ticket guess I guess, it's very reasonable to the pool is smaller given the poor weather, but when you look at the penetration of that pool of single day window guests, who subsequently disk.

Speaker Change: The purchase of Paas was it consistent with what you would've expected just at a smaller scale better or worse.

Benjamin Nicolas Chaiken: I'm sorry, Ben, can you rephrase your question just to make sure I understand exactly what you're asking me?

Speaker Change: I'm sorry, Ben can you reframe your question just to make sure I'm understanding exactly what you're asking me.

Benjamin Nicolas Chaiken: Sure, sure. You were saying that one of the larger reasons for the decrease in the pass was the lower number of new pass owners. And that the major pool for that was window guests from the previous season. I'm saying it's very reasonable that that pool is smaller given the poor weather. But of the people who did purchase, of the window guests who did subsequently purchase a season pass, is the penetration in line with what you would have expected, better or worse? And if that didn't make sense, we can catch up later. No, I have got it.

Benjamin Nicolas Chaiken: Sure sure you were saying that one of the larger reasons a the decrease in the past was the lower new pass owners, yes.

The major pool for that was window guests from the previous season, I'm, saying, it's very reasonable that that pool is smaller given the poor weather, but all of the people who did purchase of the window guests who did subsequently purchased a season pass is the penetration in line with what you would've expected.

Benjamin Nicolas Chaiken: Or worse and I hope that didn't make sense, we can catch up later.

Kirsten A. Lynch: So it has both impacts. The biggest and largest impact on our year-over-year pass sales in the spring for new is the size of the audience for the lift ticket guests, which there was a decrease. We do also see an impact on conversion, although relative to what we would have expected, but that is not the primary driver. It is the size of the audience that is the primary driver of the decline year over year. Okay, that's helpful.

Speaker Change: Got it so it is both impacts the biggest and largest impact on our year over year of pass sales in the spring for new is the size of the audience and the lift ticket gas, but there was a decrease we do also see an impact in conversion.

Speaker Change: Relative to what we would've expected, but that is not the primary driver. It is the size of the audience that is the primary driver of that decline year over year.

Benjamin Nicolas Chaiken: And then as you think about the evolution of the PASS, I would assume there are a lot of destination customers who are now part of the PASS program who were not there three or four years ago. You mentioned some lower tenure guests who tend to renew closer to the season. Do you think the PASS needs to evolve in any way to extend or smooth the seasonality of the PASS? In other words, would it make sense to add partnerships, retail or otherwise, that add demand for the PASS outside of the core season, in essence, extending the demand and utility of the PASS outside of the core season? I just would love your thoughts there. Thanks.

Speaker Change: Got it Okay. That's helpful. And then as you think about the evolution of the path I would assume there's been a lot of destination customers, who are now part of the past program, who are not there are three or four years ago. You talked you mentioned, some lower tenured guests who tend to renew closer to the season do you think the past needs to evolve and any way to extend or smooth the seasonality.

Speaker Change: In the past in other words would it make sense to add partnerships retail or otherwise that AD demand for the past outside of the core season in essence, extending the demand and utility of the past outside of course, he isn't just would love your thoughts there. Thanks.

Kirsten A. Lynch: Yeah, I think, you know, to the extent that the company could have advanced commitment for the ski season and other experiences or utilization of the past beyond the ski season, that would be a real benefit to our company. We do provide access to summer experiences in the past, but I say we're constantly always looking, Ben, at new ideas and opportunities to make that proposition even more valuable and compelling to our guests. I do think the dynamics between spring and fall have, you know, shifted and changed over time as the composition of our pass holders has changed over time between destination, local decision making, the behavior is different, and whether you're long tenured and very loyal versus you're a newer passholder coming in. And that has caused shifts between spring and fall decision making.

Speaker Change: Yeah, I think you know to the extent that the company could have advanced commitment for the ski season, and other experiences or utilization of the past beyond the ski season that would be a real benefit to our company we do provide.

Speaker Change: Access to this.

Speaker Change: Summer experience on the path, but I'd say, we're constantly always looking bad at new ideas and opportunities to make that proposition, even more valuable and compelling to our guests I do think the dynamics between spring and fall.

Speaker Change: Have you now shifted and changed over time as the composition of our pass holders.

Speaker Change: Has it changed over time between destination.

Speaker Change: Local decision, making the behavior is different and whether your long tenured and very loyal versus your newer household are coming in and that has cost shifts between spring and fall decision, making.

Laurent Andre Vasilescu: Thank you. The next question comes from Laurent Vasilescu with BNP Paribas.

Speaker Change: Thank you. Our next question comes from Laurent <unk> with BNP Paribas.

Laurent Andre Vasilescu: Oh, good afternoon. Thank you very much for taking my question.

Speaker Change: Good afternoon. Thank you very much for taking my question.

Speaker Change: As noted in the press release that the epic Australia pass sales are down 22% in units.

Kirsten A. Lynch: It's noted in the press release that the Epic Australia Pass sales are down 22% in units, primarily due to weather. Kirsten, can you provide some context for the audience about just how bad the weather has been in Australia this season so far? Could this be a leading indicator of how the U.S. might react if bad weather is going to continue for, you know, the next few seasons? And are there any learnings from Australia that you could apply when you actually plan for FY25 next quarter?

Speaker Change: Primarily due to weather.

Speaker Change: Christian could you provide some context for the audience how bad the weather was in Australia. This season, so far.

Speaker Change: A leading indicator on how the U S might react if bad weather.

Speaker Change: Could continue.

Speaker Change: For the next two seasons and are there any learnings from Australia that you could apply when you actually when you will guide for FY 'twenty five next quarter.

Kirsten A. Lynch: Yeah, Australia had a highly variable season two years ago, a record high season of amazing conditions. And then, unfortunately, the next year, very, very, like the worst season in decades.

Christian: Yeah that Australia has had highly variable seasons, two years ago, our record high season of amazing conditions and then unfortunately, the next year very very.

Christian: Like worst season in decades, so to tale of two extremes over the course of two years I think the so yes, I do think that is impacting our condition or the decision, making about a pass in Australia, There's a school.

Kirsten A. Lynch: So to tell you the tale of two extremes over the course of two years, I think that so yes, I do think that is impacting conditions or the decision-making about a pass in Australia. There's other unique dynamics happening in Australia related to the economy. I think the unique factor about our business there versus our North American resorts is, you know, a lot of our Ethic Australia pass holders are visiting our local resorts. And what you see in North America is a lot of optionality.

Christian: Other unique dynamics happening in Australia related to the economy.

Christian: I think that unique factor about our business there.

Christian: Versus our North American resorts is you know a lot of our epic Australia pass holders are visiting our local resorts and what you see in North America is a lot of Optionality and one of the benefits of the passage you know if things if you live in San Francisco and you know conditions are challenging in Tahoe.

Kirsten A. Lynch: And one of the benefits of the pass is, you know, if things are challenging in Tahoe, you have a lot of good options to go to Park City, or go to Whistler, or go to Colorado. That level of optionality in Australia when there's a poor winter is just more limited. So it's a different, more unique dynamic when it is more oriented to local visitation versus, you know, destination guests are not flying, unfortunately, to Australia to see us at our resorts there. And the options in North America are a little bit more dynamic; they give us a little bit more sort of geographic diversity to help with the stability around that.

Christian: You have a lot of good options to go to park City will go to with flair or go to Colorado that level of Optionality in Australia, when Theres, a poor winter and just more limited so it's at a different more unique dynamic when it is more oriented to local visitation versus.

Christian: As you know destination guests are not flying Unfortunately to Australia.

Christian: At our resorts, there and that options in North America, a little bit more dynamic they give us a little bit.

Christian: More sort of geographic diversity to help with the stability around that.

Angela Korch: Very helpful. And in terms of my second question, Kirsten and Angela, your dividend payout ratio is at 100% on a trailing 12-month basis. Can you discuss what the ideal payout ratio is going forward? Or put another way, how do you prioritize your capital allocation strategy across the different avenues for shareholder return?

Speaker Change: Very helpful and then in terms of my second question.

Angela Clark: Person Angela your dividend payout ratio is at 100% on a trailing 12 month basis can you discuss what's the ideal payout ratio.

Going forward our warehouse.

Speaker Change: Or asked another way how do you prioritize your capital allocation strategy across.

Speaker Change: The different avenues for shareholder returns.

Laurent Andre Vasilescu: Yeah, thanks, Laurent. We do look at, and have consistently looked at, right, our priority for capital allocation, and the dividend has been our primary route for that. And, you know, we're not looking at a specific payout ratio per se; we've been looking at where we see the free cash flow generation of the business and the underlying fundamentals have allowed us, over time, to do all of our capital allocation priorities of reinvesting in our resort experience and the employee experience. We think our balance sheet's in a very strong place to be able to do M&A, like what we just did with But we always look at the return on capital to shareholders, and we've prioritized the dividend, and we've been opportunistic in how we return capital through share repurchase, like we did this quarter.

Speaker Change: Yeah. Thanks, Lauren we do look at like consistently have looked at it right our priority for capital allocation and the dividend has been our primary route for that and you know we're not looking at a specific payout ratio per se we've been looking at.

Speaker Change: Where do we see the free cash flow generation of the business and the underlying fundamentals have allowed us over time right. So do all of our capital allocation priorities of reinvesting in our resort experience and the employee experience, we think our balance sheets and a very strong place to be able to do M&A.

Speaker Change: Like what we just said with Crown, Montana, but we always look at the.

Speaker Change: Return to capital to shareholders that we prioritize the dividend and we've been opportunistic in how we return capital through share repurchase.

Speaker Change: Like we did this quarter.

Megan Christine Alexander: Okay, very helpful. Thank you very much. Thank you. Our next question comes from Megan Alexander with Morgan Stanley.

Speaker Change: Okay very helpful. Thank you very much.

Speaker Change: Thank you. Our next question comes from Big and Alexander with Morgan Stanley.

Megan Christine Alexander: Hi, good afternoon. Thanks so much for taking our questions. Maybe a follow up just on the lift ticket visitation again. I know I think you said it was down 17% from that window lift ticket. It's obviously clear whether it was a big headwind to that customer, but just curious about your thoughts on, you know, whether price is having any impact. And the reason I ask is your largest competitor did recently say something to the tune of, "You won't see us taking prices on Lyft tickets anymore."

Speaker Change: Hi, good afternoon. Thanks, so much for taking our questions maybe.

Speaker Change: A follow up just on the lift ticket visitation again, I know I think you said it was down 17% from that window lift ticket. It's obviously clear weather was a big headwind to that customer, but I'm. Just curious your thoughts on you know whether prices, having any impact and the reason I ask is your largest competitor.

Speaker Change: Did recently say something to the tune of.

Speaker Change: You won't see us taking prices on lift tickets anymore. So just bigger picture would love to kind of get your thoughts on your pricing strategy more broadly and whether you think potentially there could be some room for some changes maybe something like dynamic pricing you know I understand the goal is to push people to the advanced commitment but.

Megan Christine Alexander: So just bigger picture, I would love to kind of get your thoughts on your pricing strategy more broadly and whether you think potentially there could be some room for some changes, maybe something like dynamic pricing. You know, I understand the goal is to push people to the advanced commitment. But at the same time, you know, you're talking about the Lyft ticket guests being the funnel for that. So I'm just trying to understand how you think about the pricing strategy and the ability to kind of retain and acquire more guests. Thanks, Megan.

Speaker Change: At the same time, you know you were talking about the lift ticket guess being in the funnel for that so I'm just trying to understand how you think about the pricing strategy and and the ability to kind of retain and acquire more guests.

Thanks Megan.

Kirsten A. Lynch: The source for our new pass holders, as I noted in spring, is primarily prior-season lift ticket guests. But when we look on a full pass selling cycle basis, the source of new pass holders comes from lift ticket guests, but it also comes from our laps, our guests, our laps, pass holders, and prospects. And we have, as you know, an extensive database to know those guests and know where they skied, when they skied, how often they skied, so we can connect with them one to one.

The source for our new pass holders as I had noted in spring as primarily the prior season, let's pick a cat.

Speaker Change: But when we look on a full pass selling cycle basis. It is the source of new passengers comes from Lyft lift ticket gas, but it also comes from our laughs lift ticket gas or lapsed pass holders and prospects.

Speaker Change: And are.

Speaker Change: We have a as you know an extensive database to no those gas and know where they skied when they skate how often they scale to be able to connect with them one to one related to let's take a price you know our pricing strategy is that very deliberately to move people into advanced commitment because.

Kirsten A. Lynch: Related to lift ticket price, you know, our pricing strategy is set very deliberately to move people into advanced commitment because that is what creates stability for us versus the variable decision making that comes from a refundable product like a lift ticket. When we have a product line that enables us to have a very strong transition from lift tickets into a pass called Epic Day Pass that allows people to move from one through seven days, and we launched this in FY19 if I'm remembering that correctly.

Speaker Change: That is what creates the ability for us versus the variable.

Speaker Change: Decision, making that comes from a refundable product like a lift ticket.

Speaker Change: When we we have a product line that enables us to have a very strong transition from less tickets into our past called epic day pass that allows people to move into.

Speaker Change: One through seven days and we've watched this I believe it was in FY 19, if I'm remembering that correctly, we launched that in order to actually capture those guests that are skiing at a lower frequency and have had enormous success.

Kirsten A. Lynch: We launched that in order to actually capture those guests that are skiing at a lower frequency and have had enormous success. In doing that, as I mentioned during the script, we've grown our past product sales by 62% in units and 43% in sales dollars over the past three years. And Epic Day Pass has been a huge portion of that. But the other part of our strategy is that we have a diverse portfolio of resorts.

Speaker Change: And doing that as I mentioned during the script was grown our past product sales, 62% in units and 43% in sales dollars over the past three years and epic day pass has been a huge portion of that but the other part of our strategy is that we have a diverse portfolio of resorts and some of those are local.

Kirsten A. Lynch: And some of those are local, some of those are regional, and some of those are destination programs to support them as they start the sport at low prices at those local resorts, and then as they move to regional and destination programs. So I think right now, you know, the list ticket decline. What we see in our data when we look at the list ticket decline is relative to when the conditions were good versus when the conditions were bad, and there is a conditional impact, but there is also an industry normalization impact based on that behavior.

Speaker Change: Some of those original and some of those are destination and when you look at it.

Speaker Change: Okay.

Speaker Change: Let's take out price for a local resort versus our original resort versus that destination resort, meaning.

Speaker Change: For people, who are starting this board are taking up the sport, we don't often see them buying a plane ticket I'm traveling to one of the destination resorts. We have a network that allows a lift ticket purchase at a very reasonable price with first time programs are and to support them as they are.

Speaker Change: Starts to sport and at low prices at those local resorts.

And then as they move to regional and destination. So I think right now you know the lift ticket decline what what we see in our data when we look at the lift ticket decline is relative to when the conditions were good versus when the conditions were bad and that there is a conditions impact but there is also.

Speaker Change: A an industry normalization impact based on that behavior I do not at this point.

Kirsten A. Lynch: I do not, at this point, believe that the 17 percent decline is related to the price of list tickets because we tend to move those people into Epic Day Pass versus it just being a direct result of me leaving the sport.

Speaker Change: Leave that the 17% decline is related to the price of lift tickets because we tend to move those people into epic day pass versus it just being a direct I'm, leaving the sport.

Megan Christine Alexander: That's really helpful. I appreciate the color.

Speaker Change: That's that's really helpful. I appreciate the color and then maybe just a follow up to what you just said at the end there how should we think about visitation for 2020 five I guess, both from an industry perspective, and from avail perspective, I guess from the industry.

Speaker Change: We're gonna be lapping a pretty challenging weather season, but perhaps there was some normalization. So you don't necessarily get a full recovery and then from <unk>.

Kirsten A. Lynch: And then maybe just a follow-up to what you just said at the end there. How should we think about visitation in 2025? I guess both from an industry perspective and from a Vail perspective. I guess from the industry, you're going to be lapping a pretty challenging weather season, but perhaps there was some normalization, so you don't necessarily get a full recovery. And then from Vail's perspective, at this point, past units down 5%, you have just fewer people on the mountains skiing.

Valles perspective at this point you know pass units down 5%, you've you know just just less people on the mountains skiing.

Kirsten A. Lynch: Just as a result of that. So I guess just any way to think about how the net of all of these factors should impact next year. Does any one factor kind of have more weight over the others? We're yes, I

Speaker Change: Just as a result of that so I guess, just just any way to think about how kind of the net of all of these factors should impact next year or does any one factor or kind of have more weight over the others.

Kirsten A. Lynch: Yes, you know, we think both are meaningful factors in visitation, the weather conditions and the normalization. We're not quantifying those yet.

Speaker Change: Well, yes, I you know we think both are meaningful factors on visitation the weather conditions, and then normalization, we're not quantifying those yet.

Patrick Scholes: We will provide more information about that as we share guidance in September on the volume and our visitation expectations. On industry normalization, you know, it's hard to say completely whether or not that is fully done or whether it continues into next year. When I look at what's happening in the travel and leisure industry and the commentary about normalization, or when I look at the ski industry results, it does look like, at least in the ski industry, similar to what you're hearing in travel and leisure, that it is mostly returning to or close to sort of a normalized trend.

Speaker Change: We'll provide more information about that as we share guidance in September on the volume in our visitation expectations.

And the industry normalization.

AH you know are you, it's hard to say completely whether or not that is.

Speaker Change: Fully done or that continues into next year when I look at what's happening in the travel and leisure industry and the commentary about normalization or I look at the ski industry results.

Speaker Change: And it does look like at least in the ski industry similar to what Youre hearing in travel and leisure that it is mostly returning back or close to sort of a normalized trend.

Speaker Change: Got it thank you.

Kirsten A. Lynch: Thank you. Our next question comes from Patrick Scholes with Truist.

Speaker Change: Thank you. Our next question comes from Patrick Shoals could truest.

Patrick Scholes: Hi, good evening, everyone. One thing I've been hearing in the industry the last couple weeks is how ICON's unit sales are at least up or tracking up at least mid-single digits year over year. I'm curious as to your opinion, you know why? What might account for the difference between where you are and where they are? You know, certainly part of that is, you know, they will have... A-Basin, I think Blue and Camelback were added, and then I think Crystal is going back to the unlimited sole icon. Anything else, you know, to think about? the difference between the two. Thank you.

Speaker Change: Hi, good evening everyone.

Speaker Change:

Speaker Change: The one thing I've been hearing in the industry. The last couple of weeks is how icon.

Speaker Change: Unit sales at least are tracking.

Speaker Change: Tracking up at least mid single digits year over year.

I'm curious as to your opinion.

Speaker Change: Why.

Speaker Change: What might account for the difference.

Speaker Change: Between where you are and they are.

Speaker Change: Certainly part of that is they will have.

Speaker Change: Hey Basin, I think blue and Camelback were added.

And then I think crystal was going back to the unlimited for icon.

Speaker Change: Anything else.

Speaker Change: To think about.

Speaker Change: Between the difference between the two thank you.

Kirsten A. Lynch: Thanks Patrick. Yeah, I can't really comment on... Anyone else's past results or icons' past results since they don't have public disclosures of their results and the drivers.

Patrick Shoals: Thanks, Patrick Yeah, I I can't really comment on.

Kirsten A. Lynch: What I can do is share, I think, some context that is always a helpful reminder, which is the life cycle of a business or a product and where our business was, you know, in its early days, and the types of guests that we were converting were high frequency, high committed guests. And now, our past has been in existence for significantly longer than their past. So I think it would make sense, as you've seen us evolve and launch new products to go after new addressable markets, not just the high frequency, most committed skiers; we have expanded dramatically, the growth of our past business going into less committed, or lower frequency, skiers. For context, if you think about when their path started versus when ours did, I'd say it's hard to compare the two because where we are in the stage of But mostly, I'd say it's that light stage piece that I think is likely the key difference.

Speaker Change: Anyone else's past results or icons paas results since they don't have public disclosures of their results and the drivers what I can do is share I think some context that is always helpful reminder, which is you know lifecycle of a business or a product and where our business was.

Speaker Change: You know in its early days and that types of gas that we were converting where the high frequency high committed gas and now our path has been existent in existence for significantly longer than their passes so I think it would make sense as you've seen us evolve.

Speaker Change: Washington products to go after new addressable markets not just the.

Speaker Change: A high frequency.

Speaker Change: Committed scares, we have expanded dramatically the growth of our past business going into less committed or lower frequency.

Speaker Change: Chairs and riders and if for context, if you think about when they're past started versus when ours did I'd say, it's hard to compare the two because the where we are in the stage of the product lifecycle is dramatically different and the types of gas and the products that we offer are drawn.

Speaker Change: <unk> different.

Speaker Change: But mostly I'd say, it's that life stage piece that I think is likely a key difference.

Patrick Scholes: Okay, thank you. And then my follow-up question, also, this one's a bit more of a high-level question. You know, there's certainly... debate in the ski community and, subsequently, with investors. [inaudible] What is the better operating strategy to go with? You folks seem to have more of a centralized approach out of Bloomfield, you know, as it relates to mountain operations and HR, whereas your main competitor leaves it up more to the local resort to make decisions. I guess, in your opinion, why is yours? Thank you. Thanks, Patrick. Well, we're talking.

Speaker Change: Okay.

Speaker Change: Thank you and then my follow up question also on the.

Speaker Change: This one's a bit more of a high level question. Yeah. There are certainly.

Speaker Change: Debates in the ski community and subsequently with investors.

Speaker Change: <unk>.

Speaker Change: What is the better operating strategy to go with you folks seem to have more of a.

Speaker Change: Centralized out of Brookfield.

Speaker Change: It relates to mountain operations and HR, whereas your main competitor.

Speaker Change: Leaves it up more to the local resort to make decisions I guess what is your opinion why is your methodology.

Speaker Change: Superior.

Kirsten A. Lynch: That would be things like HR, finance, marketing, procurement, and accounting. What's not centralized is operations. Operations decisions are decentralized to the resort. Our operators are responsible for decisions about terrain, about labor, about safety, about the running of the resorts. That is not centralized for us, And I can't really comment on how that compares to Altera.

<unk>.

Kirsten A. Lynch: Thanks, Patrick. Well, if we're talking about centralized versus decentralized, I think there's something important to clarify about this, because I think there's a misunderstanding or a misperception about this. What we have centralized as a company are support functions for our mountain operations.

Patrick Shoals: Thanks, Patrick well, if we're talking about centralized versus decentralized I think there's something important to clarify about this because I think there's a misunderstanding or misperception about that's what.

Patrick Shoals: What we have centralized as a company our support functions to our mountain operation.

Patrick Shoals: Support function that would be things like HR finance marketing procurement accounting.

Patrick Shoals: What's not centralized is operation operations decisions are decentralized into the resorts are operators are responsible for decisions about terrain about labor about safety about the running of the resorts that is not central.

Patrick Shoals: <unk> for us and I can't really comment on how that compares to alterra, but I think it's important to qualify that.

Patrick Shoals: Operations is not centralized for our company.

Kirsten A. Lynch: But I think it's important to qualify that operations are not centralized for our company. That said, why do I think it's good that we have centralized HR, finance, and marketing functions? We can have better cost efficiency and provide more support and have consistency in the support that we provide. We don't need every mountain resort to have its own procurement team or accounting team or HR or finance team when we can have a team that is really centralized and is providing support for every one of our mountain resorts in order to enable the success of our mountain operations. So I do think that that strategy is very successful. And I also think and believe that having our decision-making and mountain operations reside in the resorts and mountain operations is also the right approach.

Patrick Shoals: That said why do I think it's good that we have centralized HR finance marketing those functions because we can has better cost efficiency and provide more support and have consistency and the support that we provide we don't need every mountain resort to have their own procurement team, our accounting team or HR.

Patrick Shoals: Our finance team when we can have a team that really is centralized and is providing the support for everyone of our mountain resorts.

Patrick Shoals: In order to enable the success of our mountain operation. So I do think that that strategy is very successful.

Patrick Shoals: And I also think and believe that having our decision, making and mountain operations reside in the resorts and mountain operations is also a the right approach and I don't anticipate that changing.

Operator: Thank you. Our next question comes from David Katz with Jeffreys. Afternoon, everyone. Thanks for taking my question. I appreciate it.

David Brian Katz: And I don't anticipate that changing. Thank you. Our next question comes from David Katz with Jeff. Afternoon, everyone. Thanks for taking my question. I appreciate it.

Speaker Change: Thank you. Our next question comes from David Katz with Jefferies.

Speaker Change: Afternoon, everyone. Thanks for taking my question I appreciate it.

David Brian Katz: Can we just drill down a little bit on on Switzerland, and how we think about.

David Brian Katz: Expectations for past sales there obviously its a ramp.

David Brian Katz: But my sense is that you've.

David Brian Katz: Included some of that in your underwriting and would just love to hear your thoughts there.

Kirsten A. Lynch: Hi David. Yeah, thank you for the question. I do believe that Switzerland, but all of Europe, is a significant opportunity for us. And I think it is a path, as you highlighted.

David Brian Katz: Hi, David Yeah. Thank you for the question I do believe that Switzerland, but all of Europe is a significant opportunity for us and I think it's a it is a ramp as you highlighted.

David Brian Katz: We feel incredibly positive but over the last couple of years. We've got two owned and operated resorts. There now and I think important for us to continue to build a strong network in order to fully unlock the potential not unlike what happened for us in North America, where we started with a few resorts.

Kirsten A. Lynch: We feel incredibly positive that, over the last couple of years, we've got two owned and operated resorts there now. And I think it's important for us to continue to build a strong network in order to fully unlock the potential, not unlike what happened for us in North America, where we started with a few resorts and built out the network, and then really started to see the benefits on pass sales. Do I think that we will see some growth from Europe in owning Kron and under Mont Soudroon and having some incredible partnerships in Europe? Yes, I do.

David Brian Katz: And built out the network and then really started to see the unlock on pass sales do I think that we will see some growth from Europe in owning crime and undermine drone and having some incredible partnership in Europe, I do I don't think that.

David Brian Katz: That is.

David Brian Katz: The trajectory change I think it will be gradual over time, just like you saw if you go back to the early days of epic pass when we only had six or seven resorts and we built it out over time that is what I would anticipate would happen and that's the vision that we have and the growth potential that we see because the.

David Brian Katz: As you know the skier market in Europe is significant and there are not a lot of network resort networks and there are not a lot of multi resort passes that offer the type of access value and stability that we are capable of offering but it is definitely.

Kirsten A. Lynch: I don't think that that is the trajectory change. I think it will be gradual steps that offer the type of access, value, and stability that we are capable of offering, but it is definitely a long-term growth strategy that will take time. And as my follow-up, I wanted to ask about the new app and any data points, any learnings, any benefits, anything that's knowable there. Thanks.

David Brian Katz: Really a long term growth strategy that will take time.

Speaker Change: Understood and then just my follow up I wanted to ask about.

Speaker Change: The new App and any data points you any learnings any benefits anything that's notable there would be great.

Kirsten A. Lynch: Yeah, the new app is on track with our expectations. I'm really pleased with, in particular, one of the most critical innovations that we have in the app is, as you know, the mobile pass and mobile lift ticket, which we believe is important because it actually improves the guest experience and moves guests out of the ticket lines or waiting for their pass or ticket to arrive in the mail. It also reduces plastic and RFID waste and cost, and all of that delivered on track with our expectations in year one.

Speaker Change: Thanks, Yeah, the new App is on track with our expectations I'm really pleased with in particular, one of the most critical innovations that we have in the App is as you know mobile path in mobile lift ticket, which we believe is important because it actually improves the guest experience.

Speaker Change: And move gas out of the ticket lines are waiting for their Paso ticket to arrive in the mail. It also reduces plastic and RFID waste and cost and all of that delivered on track with our expectations in year one.

Kirsten A. Lynch: Most importantly, the experience at the baselift was delivered as what we expected for the guest. We're expanding that into Whistler Blackcomb, and my hope and my goal for next season is that we increase adoption among our guests and start to move more and more of our guests into using their phone for mobile passes and mobile lift tickets, David, but also as a key source of information, including My Epic Assistant, which we will be piloting, which will also create Cost Efficiency for us in the future.

Speaker Change: Most importantly, they experience that the baseless.

Speaker Change: It was delivered what we expected for the gas, we're expanding that into Whistler Blackcomb and my hope and my goal is for next season that we increase adoption among our guests and start to move more and more of our gas into using their phone for mobile pass.

David Brian Katz: Mobile lift tickets, David but also <unk>.

David Brian Katz: As a key source for information, including my Epic assistant, which we will be piloting which will also create.

David Brian Katz: Cost efficiency for us in the future. So all of the I would say all of those things are on track with our expectations and I'm excited to see what the second year holds in terms of guest adoption given that people are using their phones for everything now.

Kirsten A. Lynch: So all of those things, I would say all of those things are on track with our expectations, and I'm excited to see what the second year holds in terms of guest adoption given that people are using their phones for everything now.

David Brian Katz: Sure.

Chris Jon Woronka: Thank you. The next question comes from Chris Woronka with Deutsche Bank.

Speaker Change: Thank you. Our next question comes from Chris <unk> with Deutsche Bank.

Chris Jon Woronka: Hey, thanks. Good afternoon, everyone. So, my first question is kind of on the hotel side, and you know when you guys initially talk about guidance, [inaudible] Or do we just have to say that the weather is impacting things more than the initial hotel booking?

Speaker Change: Hey, Thanks, good afternoon, everyone.

Speaker Change: So the.

First question was kind of on the on the hotel side I know when you guys. Initially talked about guidance in September you typically look at what you've got on the books on the hotel side for and I know, it's really for peak.

Speaker Change: Peak periods, but if you look back now at the end of the ski season, where those hotel bookings.

Speaker Change: They offer the same level of predictive value that they use to or that you expect or do we just have to say that the weather.

Speaker Change: This is impacting things more than the initial hotel bookings.

Angela Korch: Yeah, thanks, Chris, for the question. We do, you know, when we go into the season, right? Our best indicator is past sales, but we also always, you know, comment on what we're seeing, really kind of more close in, right, for those holiday period lodging bookings. And so it is a factor that we look at, and we do kind of keep continuing to monitor that. And I think what you saw for this year is that you did see a lot of the resort markets actually not fill in as expected, as you went through the season, for both the same factors that we're talking about in terms of some of this normalization and travel behavior, but also, you know, from the conditions likely impacting the lodging, fill in, And, you know, for the resort communities, we saw occupancy declines of around four points for the winter season.

Speaker Change: Yeah. Thanks, Chris for the question, we do you know when we go into the season right. We're always looking at our our best indicator being hostile but also always you know comment on what we're seeing really kind of more close in right for those holiday period lodging bookings and so it is a factor that we look at them.

Speaker Change: We do you kind of keep continuing monitoring that and I think what you saw for this year as you did see a lot of the resort markets actually not feeling as expected as you went through with the season for both the same factors that we're talking about in terms of some of this normalization and I think travel behavior, but also you know.

Speaker Change: From the conditions likely impacting the lodging a fill in if you will from there as well and you know for the resort community as we saw really occupancy declines around four points for the winter season.

Chris Jon Woronka: Okay. Thanks, Angela. And then follow-up is kind of, as we look out to next year and think about the Epic Gear launch, right, being more fully available, and take into context your comments about renewal rates and the fact that you're doing better with folks who have been with you for a while, would that change any of your very preliminary views on what you think about Epic Gear uptake and participation rates, or do you think you have a lot of confidence in that given that you' Thanks.

Speaker Change: Okay.

Thanks, Angela and then follow up is kind of as we look out to next year would we think about the epic gear watch right being more we're fully available.

Speaker Change: Taking into context, your comments about renewal rates and the fact that youre doing better with with folks who've been with you for a while would that would that change any of your very preliminary views on what you think about epic gear uptake in participation rates or do you think you have a lot of confidence in that given that youre doing well with your view.

Speaker Change: Renewing pass holders thanks.

Kirsten A. Lynch: Thanks, Chris. I feel pretty good about our assumptions on MyEpicGear. But of course, you know, we will revisit those and refine those as we get our budget in place for providing guidance for next year. But I think that the beauty of the MyEpicGear business is that everyone needs gear, right? It's not discretionary; everyone needs gear. So it's really incumbent on us to convince our guests that this is actually a better option for either owning or renting gear because it's a subscription, and we have it ready there for you.

Chris: Thanks, Chris I feel pretty good about our assumptions on my epic Air but of course, you know we will.

Chris: Revisit those and refine those as we get our budget in place for providing guidance for next year, but I think that that's the beauty of the myopic every business is is that everyone needs gear right. It's not discretionary everyone needs scarce. So its really incumbent on us to.

Chris: Convinced.

Chris: Our guess that they actually because this is a better option for either owning or renting gear, because it's a subscription and we havent ready there for you it's more convenient and you can get the best and latest gear. So I feel that as that is a very compelling idea because everyone needs garen.

Kirsten A. Lynch: It's more convenient, and you can get the best and latest gear. So I feel that that is a very compelling idea because everyone needs gear. And so when you think about the addressable market for it, the addressable market is large, very large. And that's why I see the potential there. So regardless of, you know, high tenured or low tenured, I think I think it's a very compelling proposition, and it's on us to prove that to our guests.

Chris: When you think about the addressable market for it the addressable market is large very large and that's why I see the potential there so regardless of.

Speaker Change: Hi, tenured our low 10 years I think I think is a very compelling proposition.

And it's on us to prove that to our guests [laughter].

Brandt Antoine Montour: Thank you. The next question comes from Brandt Montour with Barclays.

Speaker Change: Thank you. Our next question comes from Brent <unk> with Barclays.

Brandt Antoine Montour: Hey, good evening, everybody. Thanks for squeezing me in here.

Speaker Change: Hey, good evening, everybody. Thanks for squeezing me in here.

Speaker Change: So on the Covid normalization comments, Kirsten and apologies if you already touched on this but does the deck I'm assuming that obviously included sort of a comment on total travel demand, which you definitely alluded to but does it also include a shift of consumer behavior back to peak travel periods I E weekends and holidays that was something.

Brandt Antoine Montour: So on the COVID normalization comments, Kirsten, and apologies if you already touched on this, but did that, I'm assuming that obviously included sort of a comment on total travel demand, which you definitely alluded to, but does that also include a shift of consumer behavior back to peak travel periods, i.e., weekends and holidays? That was something that was a nice tailwind for you early in COVID. Is that something that could be a, or is it already a headwind? Is it something that could be an additional headwind, creating more load pressure on your business operations? We did not.

Speaker Change: That was a nice tailwind for you early in Covid is that something that it could be or is it already a headwind as you think could be an additional headwind, creating more load pressure on your business operations.

Kirsten A. Lynch: We did not see that this past season, Brandt, that there was a big shift back into, you know, and if you'll recall, in the years post-COVID, we really, as we grew past sales, we saw people shift into off-peak periods, and we still see the dynamic of strength in those periods versus the peak periods. And, you know, there are some natural limiters on those peak periods anyway, including the price of coming during those peak times.

Speaker Change #100: We did not see that this past season brands.

Speaker Change #101: That there was a big shift back into it if you'll recall in the years plus Covid, we really as we grew pass sales.

Speaker Change #101: We saw shifting people into off peak periods, and and we still see.

Speaker Change #101: The dynamic of strength in those periods versus the peak periods and you know there are some natural limiters on those peak periods anyway.

Speaker Change #101: Including price upcoming during those peak times I don't really see that at least I'm not seeing signs of that in our data right now what I do see is overall you know the the ski well I'd say overall consumer travel behavior has changed and shifted year over year pretty dramatically since.

Kirsten A. Lynch: I don't really see that, at least I'm not seeing signs of that in our data right now. What I do see is that overall, you know, the ski season, well, I'd say overall consumer travel behavior has changed and shifted year over year pretty dramatically since COVID, as you've seen. You've heard a lot of travel and leisure companies talking about seeing signs of normalization, and some of them are overtly saying that off of a peak from last year as a headwind to them.

Speaker Change #101: Covid as you've seen you've heard a lot of travel and leisure companies talking about seeing signs of normalization.

Speaker Change #101: And some of them overtly, saying off of our peak from last year as a headwind to them and when I look at the ski industry. You know the ski industry had peak visitation last year. When we look at the behavior of this past season lapping that even when conditions are outstanding.

Kirsten A. Lynch: And when I look at the ski industry, you know, the ski industry had peak visitation last year, and when we look at the behavior this past season, laughing that even when conditions were outstanding, it does, we do believe that, this past season, the down 8% are down 8%, that's consistent with that, but the ski industry, you know, those numbers look for this past year, look more in line with what you would consider to be a more normal At least right now, I'm not seeing that there are big shifts between peak and off-peak.

It does we do believe that the.

Speaker Change #101: Yeah.

Speaker Change #101: Passes in the down 8% or down 8%.

Speaker Change #101: That's consistent with that but the ski industry you know that those numbers look so this past year and look more in line with what you would consider to be more normalized trend I would say.

Speaker Change #101: At least right now I'm, not seeing that being big shifts between peak and off peak.

Brandt Antoine Montour: Okay, that's super helpful. And then another question on the competitive landscape based on publicly available data from your peer, Elterra. It does look like their initial and sort of mid-season past prices are widening out versus yours is the widest level, I think, since they launched. And I guess I'm curious how you think about that from a strategic positioning standpoint, and if there's any concern that they might be trying to position themselves as a higher-tiered product than yours. The reason I ask is, maybe, you know, obviously not every skier is created equal in terms of profitability. And so, how do you think about that competitive positioning?

Speaker Change #102: Okay, that's super helpful.

Speaker Change #103: And then I have another question on the competitive landscape.

Speaker Change #104: Just on publicly available data from your from your peer.

Speaker Change #103: Alterra.

It does look like they are their initial and sort of.

Speaker Change #103: Mid season pass prices are widening out versus yours is the widest level.

Speaker Change #103: Zinc since they launched.

Speaker Change #105: I guess I'm curious, how you think about about that from a strategic positioning standpoint, and if if you. If there's any concern that they might be trying to position themselves as a higher tiered product and yours and the reason I ask is is maybe.

Speaker Change #106: Obviously, not every skiers Cree.

Speaker Change #106: Created equal in terms of profitability and so so how do you think about that competitive positioning.

Kirsten A. Lynch: I feel good about our competitive positioning based on our guests' research and the perceptions that our guests have about epic paths, which we monitor very closely. I also feel very good about the growth.

Speaker Change #107: I feel I feel good about our competitive positioning based on our desk research and the perception that our guests have about epic pass which.

Speaker Change #107: Which we monitor very closely I also feel very good about the growth we grew a very mature business and pass.

Kirsten A. Lynch: We grew a very mature business in the past. 62% in units and 43% in dollars over the past three years to get to over 70% of our visits committed in advance. And that is our strategy, and that is our focus. And I think that is likely different for them. You know, they don't have the same goal in mind for a variety of reasons.

Speaker Change #107: 62% in units and 43% in dollars over the past three years to get to over 70% of our visits committed at advance and that is our strategy and that is our focus on it and I think that is likely different for them you know they they don't have the same goal in mind for a variety.

Kirsten A. Lynch: But for us, it is really important because of the weather impacts to create that stability and move people into a pass. We have a lot of very loyal, long-tenured pass holders. We have acquired a lot of new pass holders, and our goal, it doesn't change, is to keep doing that. Related to passes, you know, we know that pass price sensitive. And the decision making between a lift ticket and purchasing a pass, we have a lot of data on what the price sensitivity is to move them over.

Speaker Change #107: Of reasons, but for us.

Speaker Change #107: It is really important because of the weather impacts to create that stability and move people into a path. We have a lot of very loyal long tenured pass holders. We have acquired a lot of new pass holders and our goal it doesn't change to keep doing that related to <unk>.

Speaker Change #107: As you know, we know that path is price sensitive and the decision, making between our lift ticket and purchasing a pass.

Speaker Change #107: We have a lot of data on what the price sensitivity is to move them over what you've seen us do something the price reset it take price up and you know epic pass prices up about 25% since we did that path reset and we will keep doing that but we are always monitoring what that price elasticity is.

Kirsten A. Lynch: Over the, you know, what you've seen us do since the price reset is take prices up and, you know, the Epic Pass price is up about 25% since we did that pass reset. And we will keep doing that, but we are always monitoring what that price elasticity is because the goal is not to move people out of passes and back into lift tickets because that creates a highly variable business dynamic for us when we need that revenue stability in a high fixed cost business to deliver the results that you saw this year, 28% less snowfall for the winter and visits down 8%, but still having revenue be able to be up 1% and EBITDA up So, yes, I obviously pay attention to what they're doing, but I think our business strategies and goals are different than what they're trying to accomplish.

Speaker Change #107: The goal is not to move people.

Out of past and back into less tickets because that creates a highly variable.

Speaker Change #107: Business dynamic for us when we need that revenue stability and a high fixed cost business to deliver the results that you saw this year, 28% less snowfall for the winter and visits down 8%, but still having revenue be able to be up 1% and EBITDA up 6%.

Speaker Change #107: So, yes, I, we obviously pay attention to what they're doing but I think our business strategies and goals are.

Different than what they're trying to accomplish.

Speaker Change #107: Okay.

Operator: Thank you. And this concludes the Q&A portion of today's call. I would now like to turn the call back over to Kirsten Lynch for closing remarks.

Speaker Change #108: Thank you and this concludes the Q&A portion of today's call I would now like to turn the call back over to Kirsten Lynch for closing remarks.

Kirsten A. Lynch: Thank you, Operator. This concludes our Fiscal 2024 Third Quarter Earnings Call. Thanks to everyone who joined us today. Please feel free to contact me or Angela directly should you have any further questions.

Kirsten A. Lynch: Thank you operator. This concludes our fiscal 2024 third quarter earnings call. Thanks to everyone, who joined US today. Please feel free to contact me or Angela directly should you have any further questions. Thank you for your time this afternoon and goodbye.

Operator: And this concludes today's Vail Resorts fiscal third quarter 2024 earnings call and webcast. You may disconnect your lines at any time and have a wonderful day.

Operator: Thank you for your time this afternoon. Goodbye. This concludes today's program.

Speaker Change #108: Yeah.

unknown: [inaudible]

Speaker Change #109: This concludes today's Vail resorts fiscal third quarter 2024 earnings call and webcast. You may disconnect. Your lines at any time and have a wonderful day.

Speaker Change #109: Mhm.

Speaker Change #109: [music].

Speaker Change #109: Hum.

Uh-huh.

Speaker Change #109: Hum.