Vail Resorts furloughs workers, slashes pay amid COVID-19 crisis
BROOMFIELD — Vail Resorts Inc. (NYSE: MTN) will furlough most North American hourly employees, cut pay for salaried workers, reduce capital expenditures and suspend quarterly dividend payments as a result of early resort closures caused by the coronavirus outbreak.
In a business update provided Wednesday, Vail CEO Rob Katz said, “The circumstances surrounding COVID-19 are unprecedented and the financial impact to our company and the broader travel industry has been significant.
“Following the difficult decision to close our North American mountain resorts, retail stores and lodging properties for the remainder of the 2019/2020 North American ski season, we have quickly transitioned to evaluating the longer-term impacts for our company and our resort operations.”
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The business update comes just two days after Vail sent out a press release touting a $2.5 million donation from Katz to support employees and the mountain towns where the company operates.
Details from the update include:
- Furloughs of nearly all North American hourly workers for at least a month. These employees will retain health insurance benefits.
- Six month pay reduction for salaried employees of 5 to 25 percent. Katz and Vail’s board will forgo salaries and cash compensation.
- Cash dividend suspended for two quarters, which helps preserve $140 million in liquidity.
- $80 to $85 million reduction in capital projects budget. “We are planning to defer all new chair lifts, terrain expansions and other mountain and base area improvements, while continuing with the vast majority of our maintenance capital spending.”
“This is one of the most challenging times many of us can remember, and it is disappointing to announce these changes, especially those impacting our employees,” Katz said. “However, we also recognize that the impacts of the current crisis have certainly hit the travel industry and our company quite hard. We believe that the actions we are announcing today will allow the company to maintain cushion on our liquidity and financial covenants under our credit facilities through the upcoming quarters and position the company for success in the future.”
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