Vail Resorts, which operates 42 ski resorts globally, cut its full-year profit forecast yesterday, as warm weather continues to weigh on skier visits to some resorts and the pandemic-era surge in skiing and snowboarding cools down. Revenue also came in below expectations, with shares falling ~6% in after-hours trading.

Vail’s CEO explained the results as a reflection of the ski industry “normalizing” after a post-Covid bump when everyone wanted to get back out into nature. Over the last 12 months, Vail recorded 17.7M visits, down 9% on the year before, with visits in this most recent season falling more sharply, down 17%.

Subscription skiing

Vail revolutionized the skiing industry back in 2008 by introducing the Epic ski pass, a season pass that offers access to an extensive portion of its ever-growing resort network. Priced comparably (at the time) to a weekend lift ticket, the Epic pass had to be purchased before the season commenced — locking in sales that could otherwise be weather dependent. The pass became a game-changer for the company, with the more predictable revenue leading to more rapid expansion. Last year the Epic pass cost $909 and was used by 72% of the resorts' skiers, generating ~$850 million in revenue.

This strategy helps explain why, despite skier numbers for Vail Resorts falling 9%, its lift revenue was actually up 2.4%. Thanks to the Epic pass, even if visits drop, almost three-quarters of its lift revenue is pre-paid.