Vail to boost minimum wage as bottomline improves
BROOMFIELD — In an effort to boost return to pre-pandemic staffing levels, Vail Resorts Inc. (NYSE: MTN), which posted improved sales and earnings in its 2022 second quarter this week, is increasing its minimum hourly wage to $20.
The move comes amid ongoing visitor complaints in the 2021-2022 ski season about the service implications of chronic understaffing and criticism from employees not paid a livable wage to work in expensive resort areas.
“Despite numerous measures taken ahead of the season, including an investment in wages, available staffing was below targeted levels heading into the holidays, consistent with challenges faced by the broader travel and leisure industry at that time,” Vail CEO Kirsten Lynch said in a prepared statement.
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In addition to the minimum wage bump, Vail is increasing “all career and leadership wage differentials to provide a significant increase in pay to all of its hourly employees,” the company said in its quarterly report. “The increase in wages and the return to normal staffing levels will represent an approximately $175 million increase in expected labor expense in fiscal 2023 compared to fiscal 2022 expected labor expense.”
Vail recorded sales of $906.5 million in the second quarter of fiscal year 2022, up more than 32% from the same period in 2021.
Net income attributable to the company was $223.4 million, or $5.47 per diluted share. While up year over year, earnings missed the Zacks Consensus Estimate of $5.70 per share.
Hoping to turn the page on COVID-19, season-to-date total skier visits were up 2.8% and total lift revenue was up 10.3% through March 6, 2022, compared to the same period in 2020, prior to the pandemic outbreak.
“We are pleased with our financial performance for the quarter. Visitation trends and demand for the experience at our resorts remain encouraging, particularly with destination guests, with results improving post-holidays as conditions improved, more terrain was opened and the impact of the COVID-19 Omicron variant receded,” Lynch said in a statement. “As expected, results for the quarter significantly outperformed results from the prior year, due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year period.”
Looking ahead, Vail expects full year 2022 EBITDA to be between $813 million and $837 million.
The company has about $330 million in capital improvements planned for the year.
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