Vail Resorts will spend $175 million more a year on employees, increasing pay by more than 30% after a grueling season that saw North America’s largest resort operator vilified as it struggled to open chairs and handle crowds.
Kirsten Lynch celebrated her 100th day as CEO of Vail Resorts this week, marking what was likely one of the most challenging 100 days ever for the publicly traded company. Vail Resorts entered the season trumpeting that it had sold a record number of advance lift tickets and Epic Passes, but after the New Year’s holiday, national news reports started blasting the company for long lift lines, shuttered lifts and an emaciated workforce.
In a presentation to investors on Monday, the company announced that starting in October it will bump pay for all its workers, starting new hires at $20 an hour and handing out raises to longtime employees, too.
In her first 100 days, Lynch said, she reflected on “what is important and what our company must focus on as we move forward.”
“Our top priority must be to support and invest in our employees,” she said, pointing to additional investments in wages, benefits, human resources support, housing and a new career development plan for seasonal workers. “This incremental $175 million annual investment in the employee experience marks a new direction for our company.”
Vail Resorts also plans to spend up to $327 million this year on 21 new chairlifts at 14 resorts, marking the largest one-time lift investment in North American resort history.
Going into the 2021-22 ski season, Vail Resorts slashed the prices for its Epic Passes by 20%. As the lifts began to turn late last year, the company reported it had sold a record 2.1 million passes and lift tickets, a 47% increase over the previous season. It also said it had $1.5 billion in cash on hand.
That news resonated as resorts with COVID-ravaged workforces were overwhelmed by typical-sized crowds drawn by winter storms. The company told investors on Monday that some of its resorts saw employee numbers decline by 10% due to COVID-19. The company said visits to its 37 North American resorts through March 6 was up 2.8% compared to the 2019-20 season, which was shortened by one month as COVID closed resorts in mid-March 2020. (The company, as most in the tourism industry, is not comparing results to the pandemic-impacted 2020-21 season.)
Visits on weekends and over the holidays so far this season have been flat. But visits on weekdays and non-holidays are up 9%.
Lynch said the growth on weekdays and non-holidays “was an outcome we wanted to achieve and we are pleased to receive.”
Lynch said it is wrong to connect record pass sales with record crowds. The holiday numbers are about the same as every season. Most of those 2.1 million buyers, she said, were existing customers who switched from buying lift tickets to purchasing passes and tickets in advance. Through the first week of March, passholders accounted for 69% of visits to the company’s ski areas, compared with 56% at the same point in the 2019-20 season.
“Pass growth does not equal visitation,” she said. “Pass holders spread their visits across many resorts and different time periods. The outcomes of visitation we are seeing are very aligned with our strategy.”
Vail Resorts reported $906.5 million in mountain and lodging revenue for the three months ended Jan. 31, which is up 32% from the same period in the previous season. In March 2020, the company reported $924.4 million in revenue for the busiest quarter of its fiscal year. Compared with the same period during the 2019-20 season, the company saw declines in ski school (down 8.9%), dining (down 27%) and retail (down 2.8%).
In a letter to employees on Monday, entitled “A New Direction,” Lynch said starting pay would be $20 an hour. Ski patrollers, maintenance workers and commercial drivers would start at $21 an hour. Heading into the 2021-22 ski season, Vail Resorts bumped its hourly rate to $15 an hour. It was not enough as an unprecedented labor crisis continues to challenge the travel and tourism industries.
Shortly after the holidays, Vail Resorts announced a $20 million investment for workers, offering an end-of-season bonus of $2 for every hour worked. Last month, Aspen Skiing announced it was spending $12 million to immediately increase base pay to $20 an hour and bump salaries by at least $6,240 a year. Vail Resorts said it would be increasing pay for salaried employees by 3% to 6%.
The company is investing $4 million in human resources, adding 66 more HR workers, which is a 50% increase. Last season the company reduced its HR workforce and moved HR operations to an app, which left workers grumbling.
Other perks for employees include a 40% discount at all more than 200 company retail locations and a new leadership development program for seasonal workers who want to pursue a career in the ski industry.
Lynch also told employees the company would be adding to its 7,000 housing beds for workers at its resorts, saying “we believe it’s time for us, and our communities, to make affordable housing a top priority and accelerate the processes to ensure we collectively make progress.”
Vail Resorts also announced a new working policy that will allow the company’s employees at its corporate headquarters in Broomfield to work from anywhere, marking a big move away from the company’s longtime strategy of centralized operations. Corporate employees can now live in any state where the company operates.
The Colorado Sun