Vail Resorts Q3 2026 Earnings Call | Extreme Weather Woes Drag Down Pass Visitation and Revenue

Thanks, Connie. Good afternoon, everyone, and thank you for joining us for our third quarter earnings call. Before getting into the details around the quarter, I want to take a minute to step back and discuss our progress against the focus areas I laid out last year. This call a year ago was my first opportunity to speak with all of you after stepping back into the CEO role. At that time, I outlined the foundational advantages that differentiate our company, including our owned and operated network, advanced commitment model, deep guest relationships, and our commitment to leveraging those strengths to deepen guest engagement, loyalty, and drive stronger revenue growth. Now, a year later, and despite just going through a very challenging pass season, those priorities remain unchanged, and we are encouraged by the progress we've made in evolving our marketing approach and enhancing our lift ticket strategies. As I think it's well understood, our results this past year were significantly impacted by weather challenges across the western United States. The historically adverse weather conditions we discussed last quarter continued through March and April, which drove meaningful pressure on visitation and revenue in the quarter, particularly at our destination resorts in the Rockies, which experienced the worst season on record for snowfall. To give context on the magnitude of the impact of conditions on visitation this past season, industry-wide visitation in the Rockies declined approximately 24%. When you look back over 40 years, the prior worst decline in visitation outside of COVID-related closures for the Rockies was down 8% in 2012, which illustrates the unprecedented severity of the conditions and the anomaly we just experienced. Against that backdrop, our advanced commitment strategy and geographic diversity, along with our resource efficiency transformation plan and ability to use our integrated systems to remain agile on expenses, were pivotal in mitigating the impact from weather this past year. At the midpoint of our updated guidance range, resort EBITDA will decline 14% from our original fiscal year 2026 guidance issued back in September 2025, which is in line with the fiscal year 2012 miss to guidance despite snowfall in the Rockies being down approximately 30% from the previous low in 2012. And year-over-year, the midpoint of resort EBITDA guidance implies a 12% decline. Nothing to cheer about, but something to be proud of given the visitation decline in a historically high fixed-cost business. Importantly, the challenging conditions did not shift our focus from delivering a high-quality guest experience, as we achieved record guest experience scores, including year-over-year increases at every resort in the Rockies where we were most impacted by weather. For the third season in a row, we had full staffing in our resorts, a strong return rate for our seasonal employees, high employee engagement scores, efficient utilization of our labor hours due to workforce planning, and much better selectivity in our recruiting efforts as our need to hire new people continues to decline. We also saw a marked decline in employee injury per labor hour, typically another good indicator of improving culture. Overall, we are very pleased with our operational execution within the areas we could control. We are also encouraged by the positive proof points we're seeing across the key strategies we outlined heading into the season: evolving our marketing approach, focusing on driving lift ticket visitation, and optimizing our pass product portfolio. And I'd like to provide an update on each of these. First, evolving our marketing approach. This involved increasing our focus on targeted paid media investments and adjusting the channel strategies to better reach and engage with guests. Heading into the season, we saw positive results from this shift in approach as we were able to improve the pass sales trend by 5 percentage points in the post-Labor Day selling period relative to the earlier selling period, which provided greater stability going into this past season. Additionally, with increased marketing investment and a clearer focus on our resorts, we saw increases in unaided brand awareness from destination guests for our top resorts. Second, we made changes heading into the season to focus on driving lift ticket visitation, which delivered early positive results. We expanded our passholder benefit program with Epic Brethren tickets at a 50% discount and saw visitation from benefit tickets increase 10%, despite a decline in overall lift ticket visitation of 10%. In addition, we introduced super advanced lift tickets which offered a 30% discount for purchases made a month in advance, which drove a 65% increase in tickets sold more than 28 days out, and we did not see evidence of material cannibalization of other advanced ticket products. Combined with our shift in marketing approach, these strategies drove meaningful outperformance relative to the US industry in lift ticket visitation this past season based on preliminary data. Our US lift tickets declined 12% while the rest of the industry lift ticket visitation was down approximately 20%. And in the Rockies, our outperformance was even stronger. There's no doubt a portion of our outperformance was due to the destination nature of many of our resorts which may do better than local resorts in a tough weather year. But even in the Northeast, which saw excellent conditions, we saw an increase in our lift ticket visits of 8% versus the rest of the industry down an estimated 8% in the Northeast. Finally, moving on to next season's pass sales, spring pass sales were down 10% and sales dollars including tax were down 5%, which reflects softer demand following one of the worst ski seasons in history. While our overall pass sales decelerated in May from our April deadline, part of that was the timing of military sales, a portion of which got pulled forward into April due to us offering pass benefit tickets to military passholders for the first time, and partly due to the timing of auto-renew charges. Excluding auto-renew and military, unit declines are very stable between the two selling periods. While we're clearly not satisfied with any decline in pass sales, the outcome is not necessarily surprising given the severity of the conditions we just experienced this past season and the massive growth we saw in pass sales in the previous five years, especially in our frequency products, which saw the biggest declines this past spring. Encouragingly, third-party data suggests that our spring pass performance meaningfully outpaces the broader industry, which we would attribute to all the new strategies we put in place for this year. Angela will cover additional details on the spring pass results, but we do believe based on our own results and the broader market data that a portion of the decline is likely due to delayed purchase decisions rather than reduced overall intent to ski next season, creating an opportunity for improved pass performance in the fall selling season or ultimately through in-season lift ticket purchases next year. Looking back over the past several decades, US ski market data indicates that visitation typically fully recovers following a season with poor conditions if the subsequent season has normal conditions. And we believe we are well positioned to capture that visitation recovery with the pass, analytic, product, and marketing strategies we have developed. That said, given how unprecedented this past season was, it's hard to know with certainty how any of this will play out. Looking ahead, we see a unique opportunity to drive a step-change improvement in the overall guest experience across our resorts through continued investments in lifts, snowmaking, terrain, and talent while leveraging the scale and strength of our integrated network to implement new technologies and processes to enhance key elements of the guest experience. We are uniquely positioned to differentiate the guest experience as we have intentionally built a fully integrated, owned and operated network of world-class destination and regional resorts connected through our pass and marketing ecosystem and supported by unified data and technology platforms. We have key initiatives underway in our gear, ski school, and dining businesses, as well as every facet of guest engagement and communication, and we will share updates on these efforts in the upcoming months and throughout the year. Together, these initiatives will play an important role in driving future visitation growth and long-term value creation. With that, I'll turn it over to Angela to walk through the quarter in more detail.

Yeah, I think what we're seeing, as Angela mentioned, one of the biggest things we're noting is that in Colorado, Tahoe, Utah, and destination markets—particularly destination guests who visited the Rockies resorts—those are where we're seeing the biggest decline. And we're seeing much more modest decline in the Northeast and at Whistler Blackcomb. So that tells us this is very much a conditions impact from last year as opposed to some broader structural impact. Not surprised that following the season we just saw, the new segment of our pass sales is down a lot more than renewal. But we're heartened that the renewal piece is as strong as it is. The other piece we would mention is that the unlimited products, which we have been focused on quite a bit since last Labor Day, are really outperforming our frequency products, and we're trying to move people from frequency up. The frequency buyer is the newer buyer to the overall program, a little bit more sensitive, and unlikely to buy as early given the conditions we just went through.

Thanks, Dave.

No, it's not. When you look back historically, what you see is that over a lot of years, both when you look at years where the Rockies did poorly—another great example is the drought in Tahoe—and then you look at the year that had normal conditions, we see every indication that visitation comes fully back and in some cases surpasses even the year before the bad year, like it did in Tahoe. Some of that is pent-up demand created during a season like we just went through. That said, during those years there were no pass programs like we have today, certainly not to the extent we've grown them over the last five years. So it's not surprising to us that you're going to see some delayed decision-making in the spring. This would be a perfect example of when you'd expect that. At the moment, we're seeing a lot of this as timing between spring and fall or even between fall and the season for lift tickets. That's why it's critical that we not only have great programs on the season pass side, but also for lift tickets. So we are planning for a normal season next year with normal conditions. However, as we mentioned, we are dealing with an unprecedented anomaly, so there's no way we can be exactly sure what it's going to look like, but right now there's no change in our planning for next season.

Sure. What I'd say is it's continued investments in the way we have in the past in things like lifts and snowmaking, terrain, upgrades to restaurants. Where we really see the step change is taking the network of resorts we have and using technology and new processes to elevate the experience guests have through system-wide or network-wide investments. That could be My Epic Gear in terms of completely changing how guests experience gear. It could be around ski school, like the digitization of ski school which we announced, and we have other things we're working on that we'll announce in the months ahead. Same with food and other things we're looking at on how we connect with guests, address guest feedback, how critical and impactful the app is. We can create an ecosystem around our resorts that meets what guests of this generation expect: technology and processes that make everything easier and better, eliminating hurdles some people can have when they go skiing, but without getting in the way of their experience on snow. We think we're uniquely positioned to do that, as well as the marketing piece. We have the ability to market passes and lift tickets to guests with a unified marketing approach, while still elevating each resort's brand and unique connection to our guests.

On FY27 for My Epic Gear, it's definitely a transition year where we're moving from what we were offering before to taking the ability to select your own gear and rolling that out for all of our demo skis that we're going to sell next year. From a financial perspective, no, we don't see any issue there. From an experience perspective, it's going from a very small, high-touch experience with very few guests to really rolling it out to that highest-end guest across a much broader base. In FY28, you would see the full experience with high touch points and everything else rolled out to everyone who rents, and we'll have gradations of different parts of the experience at that point. But the ability to select your gear, the ability to have an app and get the gear wherever you want, reducing all these friction points—once you've tried on a boot or used a ski and you like it, we can have that all ready for you without you coming in again or even delivering it to your unit or condo.

You know, we don't have to. We'll just drop it off and you can pick it up. It's not like we actually have to have people go through the process of the fitting. So all of that is really FY28 piece, but FY27 will be the first step towards that.

Thanks.

Yeah, I think if you look back, it's the reverse of this. When we were growing season pass revenue 20-plus percent per year in double digits for a long time, we absolutely saw a significant decline in lift ticket visitation as people moved from lift tickets to passes. So we do think we have every opportunity to see strong growth in lift ticket visitation if the pass business comes down. There's a fluid movement between the two products. That doesn't mean it's perfect. I can't exactly say because we're in a unique environment exactly how that will play out, but we don't think there's any artificial cap to how we can drive lift growth. It really comes down to what the demand is. The key thing was having products available for people at more accessible price points. Our Epic Friend tickets and the super advanced lift ticket, which has performed very well and is only in its first year with not a ton of awareness, so we see that as a huge opportunity for next year. We were very selective last year in picking certain resorts and time periods to be more aggressive on specific lift ticket products, and I think you'll continue to see us do the same thing going into next year. That said, the best deal will always come from a pass. As we get towards the end of the pass selling season, we will make sure we're reminding everybody of that fact before we go into next year. And obviously, we have our turn-in-your-ticket program where folks who might have used an Epic Friend ticket or bought any lift ticket can use that to buy a pass as they go into next year.

Yeah. First of all, we go into FY27 with an opportunity to see a run rate improvement in our resource efficiency transformation efforts. We're delivering on all of that for FY26, a portion of which will roll into FY27. We'll have new initiatives we'll talk more about going forward. Most of that will be FY28, but a portion will hit FY27. And obviously, we have a unified approach to scheduling labor and workforce planning. We can be nimble with labor if visitation declines, but we're going into next season looking for full staffing and really expecting, assuming conditions are good, that we'll get full visitation. So we're not going to pull back on the guest experience. But as we saw this year, if that happens, we certainly can make adjustments. But that's not what we're planning for.

We're constantly looking at our results for the last deadline and saying, what did we learn? What can we do differently? Where can we lean in more? We're taking all the learnings from spring and putting them to work through Labor Day and the rest of the season. I think we have opportunities with some new approaches we launched post-Labor Day last year. We have an opportunity to put those in along with learnings from spring into this year's Labor Day. In the mid-way, we tend not to make big product changes because it's critical for everyone to make decisions on the product set we have, and important that folks who buy earlier always get the best deal. We're not going to change that. But in terms of how we go to market with media dollars, that's always about the numbers we're seeing. We saw good results from incremental dollars put to work last fall and this spring, so that's front of mind as we go into the fall.

Yes, absolutely. It's important to remember that while we're down 10% in units and 8% in days sold after this horrible winter, we're still so far ahead of where we've been in any previous bad season in terms of advanced commitment in total. So in some respects, we're in a much stronger position thinking about next season even though we had a bad year. And yes, if somebody doesn't buy a pass and waits to buy a lift ticket, even at the lower prices we're putting out, they'll pay more. So our effective lift ticket price will go up. That said, we still want people in the advanced commitment bucket, but we have to have every lever available.

Right now, it's tough to break out any macro impact from the weather and conditions impact from last year. Based on data on Whistler and the East versus other markets, it seems more conditions-driven. Historically, when travel costs are higher, people might drive instead of fly, so we may see stronger local visitation. But many people won't fly internationally if flights are even higher, and we're seeing cutbacks on European and Asian flights. Ultimately, that could help the US and North American destination business. Our business provides a natural hedge in tougher economic times because skiing is core and part of recreation. But right now, it's hard to say what the overall economic environment will be next year, so we're focused on our unique situation rather than the overall economy.

We don't see that as a material driver. Our passes provide access in Europe and Asia, and we're not seeing a material increase in usage. In unique locations, it can be meaningful for a resort in Europe or a US business, but overall for the North American ski industry, it's not material either way. It's a bucket list thing people add on now and then, not replacing normal visitation. The other side is that over the last 5-7 years, we've seen a decline in inbound visitation to the US due to various factors like the dollar and overall tourism. That's a much bigger trend, and international visitation to the US for the ski industry has declined significantly. If there's a normalizing trend over time, that's our hope.

It's hard to have perfect information since we're the only one doing the reporting, but we base that on third-party entities tracking transaction volume. To the extent we're outperforming, we think it's from things we did going into this pass-selling season: spending more on media, the Young Adult pass, which we think was priced well, and a strong message. We also leaned into new marketing tactics and approaches that started last fall. We had a really strong year in guest experience at our resorts, even with tough snowfall and conditions. On things we could control, I think we did really well, and I think our guests feel that way, giving confidence as we go into next season.

I'm not going to comment on specific M&A. But historically, I haven't seen down economic or snow years trigger immediate selling. Nobody wants to sell in a down year. However, sometimes it reminds people that tough years happen, so a year or two later, there might be a different ownership mindset. Many resorts in North America have transacted over the last couple decades, so most current owners are in it as a long-term family commitment. Whether a year like this impacts them is unclear.

We've been looking at this internally for a while. We've reported on units, but an Epic Pass or Epic Local Pass is one unit, and an Epic One Day is also one unit, but they're completely different products. Internally, we've tracked days sold because it tells us how many days of skiing we have. We don't know when we sell a product how many days they'll use it, but internally and now externally, it highlights the frequency of the unit. So days sold versus units is informative. We started talking about it at the investor conference and decided to report on it. It's what we track most closely for overall revenue and visits. Units are still important as a transaction piece, but days sold tracks closer to volume.

It's kind of early. A lot of that probably happens later. Right now, we're seeing improvements in the turn-in ticket categories across the board. But we need to see how it goes through the remainder of the season. Both programs performed well on a relative basis, but we didn't see full benefit because overall visitation was lower and we had serious headwinds with conditions. On a relative basis to other lift ticket products, they did well. But for the impact on the pass business, we'd need a normal full season to see how many people buy and convert. This is a tough year for full assessment. The flip side is we felt good introducing aggressive products last year in a tough winter, allowing us to have products that made it easier for people to buy. It's a tougher pass-selling season now, so having these other avenues is positive.

I have no idea. It's hard to know. We take our approach. There's a competitive dynamic, but as we shared at the investor conference, we looked at how much we increased pass pricing over the last four years for adults and young adults. In the adult category, we did well, but in the young adult category, we didn't. So this is almost a rollback of prior increases. One benefit we have is that because we own our resorts and have limited partners, when we change price, we're not constrained by relationships with partners or how we spend on media. We also get ancillary benefits in all our resorts. So being more aggressive with young adults, wherever they are in our North American network, we get 100% of lift revenue plus everything they spend on the mountain. That makes it trickier for others without that setup. The same applies as we move between pass and lift tickets holistically. So we're not in a reactive mode; we're focused on optimization.

Thank you. While this year presented weather challenges and tougher financial results, it also sharpened our focus and reinforced the work we're doing to address the end-to-end guest experience, from marketing to product to the entire on-mountain experience. I want to thank our frontline teams for their unwavering dedication throughout this exceptionally challenging season. As we look ahead, we build an integrated network and platform that positions us to deliver a consistent, differentiated guest experience, strengthen loyalty, and drive long-term growth. This network allows us to deliver a more consistent experience at every touch point at scale, which remains the heart of everything we do and will drive us to the next phase of our growth. Thank you all for your time today.