Vail Resorts , Inc. is one of the leading resort operators in North America. The Company was organized as a public holding company in 1997 and operates through various subsidiaries. The Company’s operations are grouped into three segments, Mountain, Lodging and Real Estate, which represent 71%, 17% and 12%, respectively, of the Company’s revenues for the 2007 fiscal year. In Fiscal 2007, Vail Resorts Group Net Income was $61.4 million.
The Company owns and operates five ski resorts: Vail, Breckenridge, Keystone and Beaver Creek, located in the Colorado Rocky Mountains, and Heavenly, which is located on the Lake Tahoe area of California/Nevada. Vail ski resorts had approximately 6.2 million skier visits during the 2006/2007 ski season, or approximately 11.3% of United States skier visits, and an approximate 8.5% share of the North American market’s skier visits.
Unlike Compagnie des Alpes , the european company I wrote about last week, Vail Resorts like other American companies operate many businesses outside of ski lifts: ski-schools, lodging, restaurants, and real estate promotion. Vail Resorts summed up its approach to the business this way:
«A key component of the Company’s business strategy has been to expand and enhance its core ski operations while at the same time increasing the scope, diversity and quality of the complementary activities and services offered to its skiing and non skiing guests throughout the year (…)The Company’s business strategy is not only to increase skier days but also to increase Resort Revenue per skier day by capturing a higher percentage of the total spending of its year round destination and day guest by continuing to expand the range and enhance the quality of activities and services offered by the Company» (Vail Resorts Inc. Annual Report, 1998: I).
The year-round mountain resorts derive revenue through a huge offering of amenities, including lift ticket sales (represents less than 50% of the Mountain segment revenue), ski and snowboard lesson packages, resort accommodations, retail and equipment rental outlets, dining venues, private club operations, and other recreational activities such as snowshoeing, golf, mountain biking, tennis, horseback riding, fishing tours, float trips, sight-seeing tours and on-mountain activities centers. In addition to providing extensive guest amenities, Vail Resorts also engages in commercial leasing of restaurants, retail and other commercial space, real estate brokerage services, and extensive licensing and sponsorship activities with other brand-name companies.
The Company’s wholly-owned subsidiary, Vail Resorts Development Company develops buys and sells real estate in and around these resort communities in order to enhance their revenue outlets.