Is the market sniffing out a forced asset liquidation at Vail Resorts?

[snowbird surfer]

I’m having a hard time understanding what outcome you're actually pushing for here:

• Local Investment: You seem to want Park City under ownership that will actively invest in it, but the primary roadblock isn't current management—it’s local NIMBYism resisting any change whatsoever.
• Shareholder Perspective: Unlocking shareholder value for Vail Resorts (MTN) doesn't appear to be a priority for you.
• Pass Access: What if Park City were sold and left the Epic Pass network?

Is Alterra quietly bankrolling these lawsuits behind the scenes?

The core legal argument seems to be that modernizing lifts will increase carrying capacity beyond permitted limits. But if upgrading aging infrastructure isn't allowed, is Park City just expected to remain frozen in time? That’s hardly a sustainable plan for the community's long-term health. That said, the outcome of the first 2020 lawsuit was a close call—and arguably decided incorrectly.



I have no love for Vail, but I follow the stock out of general interest.

I owned the stock for a bit in the late 2010s, when the acquisition spree was underway, cheap capital was available, and the Alterra partner model wasn't fully developed. Industry consolidation was novel, overdue, and expanding the value of a season pass.

I recently shorted it a week or two before Christmas, when almost every major Western region was having a record-poor snowfall winter, with no storms in sight, but closed the position after it did not bottom out further; only a 13-15% gain. Good, but not great compared with the basic index or AI investments, etc. I thought Vail's model might unwind more, but I did not want to wait until the end of the quarter.

I’m not pushing for an outcome, just wondering if this model is a bust and if and when it will unravel.

I owned MTN over a very bumpy 4 years and liquidated with a measly 4% gain IIRC.

I think the company is in trouble and the NIMBY crowd can/will blow up the massive development plans VR had in mind when they purchased the base and too over the lease.

In a perfect, far fetched world, the community would purchase then operate the resort in a not for profit model and replace the town lift plaza with a gondola that deposits riders at mid mountain,Jupiter, and in LCC… and world peace would ensue.

 

[Tony Crocker]

Snow is genuinely mean-reverting and industry data does show visitation fully recovering after a poor season when the next one is normal. If 2026/27 delivers normal Rockies snowfall, the pass book heals through the fall selling season, the lift-ticket strategy compounds, and Australia keeps printing +26%, then FY28 EBITDA returns to $830M+, the dividend holds, and 10.7x on a network of irreplaceable assets is cheap rather than fair. That path is real. It is simply not the path a levered business should be relying on.

The Epic Pass sales for 2026-27 area done deal IMHO. Pass sales end in early December. That date is not an accident. It's deliberately set so that skiers can't wait to buy until they see how the season is developing.

How have US skier visits bounced back after other terrible snow years?
1980-81 was 70% snow (69% west) and skier visits fell 18%. 1981-82 was a top 5 snow year all time (121%,122% west) and visits were higher than in 1979-80.
1986-87 was 78% snow (75% west) and skier visits increased to the highest so far in Kottke reports, which started in 1978-79. I have no explanation for this. The snow was not front-ended. I was in Utah Christmas Week and everywhere except Alta was marginal.
1991-92 was 78% snow (76% west) and skier visits were just below trendline and higher than the prior season. Western snow in 1991-92 was front ended, and the prior season was a disaster in California until March.
2011-12 was 75% in the Rockies plus California and 67% in the Northeast. About a third of the 16% decline in skier visits is due to 2010-11 being the best season all time at 131% (137% west). 2012-13 visits rebounded to right on trendline even though it was mediocre at 91% (87% west)
2014-15 was 70% snow (67% west) and skier visits fell only 5%. The Northeast did well and December was the highest snow month in the west.
2025-26 was 70% snow (66% west) and skier visits fell 14%. Again the Northeast did well, but the comparison to 2014-15 shows how much the early season (Nov-Dec) snowfall matters.

Historical precedents says skier visits rebound to the long term trendline with a normal season. How might that be different in the Epic/Ikon era? The obvious is that those pass sales will not rebound until next fall for the 2027-28 season. The new question is whether the people who did not renew Epic/Ikon sit out or drastically curtail their ski days because they don't have a pass this season even if snow is good. I would expect some of that but those people are probably the casual 5-10 days a year skiers so it may be hard to discern this effect next spring in aggregate Kottke numbers.

 

[Tony Crocker]

Mammoth after the Starwood private equity purchase in 2006 failed bank covenants in 2011-12, forcing layoffs and closing June Mt. in 2012-13. With lots of snow in Dec. 2012 Rusty Gregory refinanced Mammoth in manner that the even worse 2013-14 and 2014-15 seasons did not allow the lenders to interfere in operations those years.

IMHO the increase in skier visits starting 2018-19 was due to Epic/Ikon and has just established a higher plateau of skier visits vs. comparable seasons in the 2010's. So these ski companies should not be priced for growth but for long run stable revenue. Short run the revenue will be down in bad snow years, and the debt load should be at a level that can withstand those down years. That was the lesson that Mammoth learned in 2012.

As for next year's Super El Nino forecast, 1991-92 was 5th highest El Nino and 1986-87 was 8th. The ugliest years were neutral (1980-81 and 2025-26) or moderate La Nina (2011-12). The small sample size (3 seasons) of Super El Nino are not below average anywhere in the western US though they are in western Canada and the Northeast.

	California​	Pacific Northwest​	Interior Canada​	U.S. Northern Rockies​	Utah​	Northern & Central Colorado​	Southern & Western Colorado​	Northeast​	Equal Region Average​	Seasons​
El Nino	108%​	85%​	84%​	89%​	98%​	92%​	96%​	96%​	93%​	14
El Nino++	113%​	94%​	84%​	89%​	101%​	89%​	97%​	92%​	95%​	8
El Nino+++	137%​	106%​	86%​	103%​	109%​	105%​	102%​	81%​	104%​	3
La Nina	99%​	116%​	107%​	109%​	104%​	103%​	99%​	100%​	105%​	19
La Nina++	101%​	132%​	115%​	119%​	106%​	110%​	100%​	103%​	111%​	8

 

[Tony Crocker]

Ongoing discussion of the upcoming El Nino season is moved to the existing thread on the topic.

 

[snowbird surfer]

Analysis: Vail Resorts investors prepare for proxy fight, future of Park City in question - Park Record

This summer, Vail has faced several lawsuits, restructured its board of directors and announced new company-wide “Epic Experience” branding, as well as changes to the branding of individual resorts. Most recently, the publicly traded company has been the target of a Wall Street battle with Oasis...

www.parkrecord.com

Where there's smoke, there's fire.

When the dividend gets cut and the market further discounts the current model, the pressure will build. To what end???