Vail Resorts announces pay cuts, furloughs for employees, pause in payouts for CEO, board, shareholders | SkyHiNews.com
YOUR AD HERE »

Vail Resorts announces pay cuts, furloughs for employees, pause in payouts for CEO, board, shareholders

John LaConte
jlaconte@vaildaily.com

Vail Resorts on Wednesday announced the company would be making a large reduction in expenses over the next few months.

In a public letter, CEO Rob Katz said it’s becoming less clear when the company’s mountain, lodging, retail and transportation businesses will be able to reopen.

Vail Resorts will furlough most hourly employees, and all salaried employees in the U.S. will receive a reduction in pay.

The company will also pause payments to Katz and its board of directors, and dividend payouts to shareholders will not take place in July and October for the first time since the inception of Vail Resorts’ common stock dividend in 2011.

‘Outside of our control’

Vail Resorts’ 37 ski areas will also defer most capital improvements, which includes expansion projects.

Ryan Huff, Director of Communications for Vail Resorts’ Colorado ski areas, confirmed on Wednesday that Beaver Creek’s 250-acre expansion at McCoy Park project is on hold for now. McCoy Park was scheduled to open next season.

“I am very hopeful that both the economy and travel will return to normal by the time our North American winter season opens eight months from now,” Katz wrote. “However, we also need to remember that we have substantial business operations set to open over the next few months — our Australian winter season, Grand Teton Lodge Company, as well as our lodging, retail, and summer mountain operations at our North American resorts, which collectively represent more than 20% of our total revenue. With the very real possibility that the global stay-at-home orders could be extended, and travel reduced regardless, our business in May through October is at risk. We will work hard to reopen as soon as practical, but much of this is now outside of our control.”

Vail a hot spot

In Colorado, the first person diagnosed with the novel coronavirus was a skier who arrived at Denver International Airport Feb. 29 and then skied the Vail Resorts properties of Keystone and Vail. The man started developing symptoms on March 3 and went in for testing March 4. In the days that followed, Eagle County became known as a “hot spot” area where infected people from Australia to Mexico have traced probable contraction.

Vail Resorts made the unprecedented decision to shut down its North American resorts after the lifts stopped spinning on Saturday, March 14. That decision was followed by an executive order from Colorado Gov. Jared Polis to shut down all the state’s ski resorts for at least a week later that night.

The closures then became permanent in the following days. Katz wrote in his letter that the early closure of Vail Resorts’ North American operations will cost the company at least $180 million to $200 million in lost profitability in the company’s third quarter, ending April 30. 

“I am very hopeful that both the economy and travel will return to normal by the time our North American winter season opens eight months from now,” Katz wrote. “However, we also need to remember that we have substantial business operations set to open over the next few months — our Australian winter season, Grand Teton Lodge Company, as well as our lodging, retail, and summer mountain operations at our North American resorts, which collectively represent more than 20% of our total revenue. With the very real possibility that the global stay-at-home orders could be extended, and travel reduced regardless, our business in May through October is at risk. We will work hard to reopen as soon as practical, but much of this is now outside of our control.”


Support Local Journalism

Support Local Journalism

Readers around Grand County make the Sky-Hi News' work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.

For tax deductible donations, click here.
 

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User