On Monday, Vail Resorts (NYSE:MTN) discussed third-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Vail Resorts Inc reported a 7% decline in resort revenue for the quarter due to unfavorable weather conditions, with a 9% decrease in Resort EBITDA.
The company noted a 10% decrease in spring pass sales units, attributed to challenging conditions, but observed stronger performance in the Eastern US and Whistler Blackcomb.
Despite the tough season, Vail Resorts Inc achieved record guest experience scores and maintained full staffing, with a focus on marketing strategies and lift ticket visitation.
The company plans to continue investments in lifts, snowmaking, and guest experience technologies to drive future growth.
Vail Resorts Inc’s balance sheet remains strong with $1.1 billion in liquidity, and the company reaffirmed its capital expenditure plans for core spending and technological enhancements.
Full Transcript
OPERATOR
Good afternoon and welcome to the Vail Resorts fiscal third quarter 2026 earnings conference call. Today’s conference is being recorded. Currently all callers have been placed in a listen only mode and following management’s prepared remarks, the call will be open for your questions. If you’d like to ask a question at that time, please press star1 on your telephone keypad. If you need to remove yourself from the queue, press star two to get as many questions as time permits.
We ask you, please limit yourself to one question and one follow up at any time. If you should need operator assistance, please press 0. I will now turn the call over to Connie Wang, Vice President of Investor Relations at Vail Resorts. You may begin.
Connie Wang (Vice President of Investor Relations)
Thank you Operator Good afternoon everyone and welcome to Vail Resorts Fiscal 2026 Third Quarter Earnings Conference Call. Joining me on the call today are Rob Katz, our Chief Executive Officer, and Angela Korch, our Chief Financial Officer. Before we begin, let me remind you that some information provided during this call may include forward looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings and actual future results may vary materially.
Forward looking statements in our press release issued this afternoon along with our remarks on this call are made as of today, June 8, 2026 and we undertake no duty to update them as actual events unfold. Today’s remarks also include certain non GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, which along with our quarterly report on Form 10Q were filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com.
I would now like to turn the call over to Rob for opening remarks.
Rob Katz (Chief Executive Officer)
Thanks Connie Good afternoon everyone and thank you for joining us for our third quarter earnings call. Before getting into the details around the quarter, I want to take a minute to step back and discuss our progress against the focus areas I laid out last year. This call a year ago was my first opportunity to speak with all of you after stepping back into the CEO role. At that time, I outlined the foundational advantages that differentiate our company, including our owned and operated network, advanced commitment model and deep guest relationships and our commitment to leveraging those strengths to deepen guest engagement, loyalty and drive
stronger revenue growth. Now, a year later and despite just going through a very challenging ski season, those priorities remain unchanged and we are encouraged by the progress we’ve made in evolving our marketing approach and enhancing our lift ticket strategies. As I think it’s well understood our results this past year were significantly impacted by weather challenges and across the western United States, the historically adverse weather conditions we discussed last quarter continued through March and April, which drove meaningful pressure on visitation and revenue in the quarter, particularly at our destination resorts in the Rockies which
experienced the worst season on record for snowfall. To give context on the magnitude of the impact of conditions on visitation this past season, industry wide visitation in the rockies declined approximately 24%. When you look back over 40 years, the prior worst decline in visitation outside of COVID related closures for The Rockies was down 8% in 2012, which illustrates the unprecedented severity of the conditions and the anomaly we just experienced.
Against that backdrop, our advanced commitment strategy and geographic diversity, along with our resource efficiency transformation plan and ability to use our integrated systems to remain agile on expenses, were pivotal in mitigating the impact from weather this past year. At the midpoint of our updated guidance range, Resort EBITDA will decline 14% from our original fiscal year 2026 guidance issued back in September 2025, which is in line with the fiscal year 2012 midpoint of guidance.
Despite snowfall in the Rockies being down approximately 30% from the previous low in 2012 and year over year, the midpoint of Resort EBITDA guidance implies a 12% decline. Nothing to cheer about but something to be proud of given the visitation decline in a historically high fixed cost business. Importantly, the challenging conditions did not shift our focus from delivering a high quality guest experience as we achieved record guest experience scores including year over year increases at every resort in the Rockies where we were most impacted by weather.
For the third season in a row, we had full staffing in our resorts, a strong return rate for our seasonal employees, high employee engagement scores, efficient utilization of our labor hours due to workforce planning, and much better selectivity in our recruiting efforts as our need to hire new people to continues to decline. We also saw a market decline in employee injuries per labor hour, typically another good indicator of improving culture. Overall, we are very pleased with our operational execution within the areas we could control.
We are also encouraged by the positive proof points we’re seeing across the key strategies we outlined heading into the season, Evolving our marketing approach, focusing on driving lift ticket visitation and optimizing our past product portfolio and I’d like to provide an update on each of these. First, evolving our marketing approach. This involved increasing our focus on targeted paid media investments and adjusting the channel strategies to better reach and engage with guests heading into the season.
We saw positive results from this shift in approach as we were able to improve the past sales trend by 5 percentage points in the post Labor Day selling period and relative to the earlier selling period, which provided greater stability going into this past season. Additionally, with increased marketing investment and a clearer focus on our resorts, we saw increases in unaided brand awareness from destination guests for our top resorts. Second, we made changes heading into the season to focus on driving lift ticket visitation, which delivered early positive results.
We expanded our passholder benefit program with epic Friend tickets at a 50% discount and saw visitation from benefit tickets increase 10% despite a decline in overall lift ticket visitation of 10%. In addition, we introduced super advanced lift tickets which offered a 30% discount for purchases made a month in advance, which drove a 65% increase in tickets sold more than 28 days out. And we did not see evidence of material cannibalization of other advanced ticket products.
Combined with our shift in marketing approach, these strategies drove meaningful outperformance relative to the US Industry in lift ticket visitation this past season. Based on preliminary data as we saw our US lift tickets decline 12% while the rest of the industry lift ticket visitation was down approximately 20% and in the Rockies our outperformance was even stronger. The there’s no doubt a portion of our outperformance was due to the destination nature of many of our resorts, which may do better than local resorts in a tough weather year.
But even in the Northeast which saw excellent conditions, we saw an increase in our lift ticket visits of 8% versus the rest of the industry down in it an estimated 8% in the Northeast. Finally, moving on to next season’s pass sales, spring Pass sales were down 10% and sales dollars including tax were down 5%, which reflects softer demand following one of the worst ski seasons in history. While our overall pass sales decelerated in May from our April deadline, part of that was the timing of military sales, a portion of which got pulled forward into April due to us offering pass benefit tickets to military passholders for the first time, and part
was due to the timing of auto renew charges. Excluding auto renew and military unit, declines were very stable between the two selling periods. While we’re clearly not satisfied with any decline in pass sales, the outcome is not necessarily surprising given the severity of the conditions we just experienced this past season and the massive growth we saw in pass sales in the previous five years, especially in our frequency products, which saw the biggest decline this past spring.
Encouragingly, third party data suggests that our spring pass performance meaningfully outpaced the broader industry, which we would attribute to all the new strategies we put in place for this year. Angela will cover additional details on the spring pass results, but we do believe based on our own results and the broader market data, that a portion of the decline is likely due to delayed purchase decisions rather than reduced overall intent to ski next season, creating an opportunity for improved past performance in the fall selling season and or ultimately through in season lift ticket purchases next year.
Looking back over the past several decades, US Ski market data indicates that visitation typically fully recovers following a season with poor conditions if the subsequent season has normal conditions, and we believe we are well positioned to capture that visitation recovery with the past and lift ticket product and marketing strategies we have developed. That said, given how unprecedented this past season was, it’s hard to know with certainty how any of this will play out.
Looking ahead, we see a unique opportunity to drive a step change improvement in the overall guest experience across our resorts through continued investments in lifts, snowmaking, terrain and talent, while leveraging the scale and strength of our integrated network to implement new technologies and processes to enhance key elements of the guest experience. We are uniquely positioned to differentiate the guest experience as we have intentionally built a fully integrated, owned and operated network of world class, destination and regional resorts connected through our PaaS and marketing ecosystem and supported by a unified data and technology platform.
We have key initiatives underway in our gear, ski school and dining businesses as well as every facet of guest engagement and communication and we will share updates on these efforts in the upcoming months and throughout the year. Together, these initiatives will play an important role in driving future visitation growth and long term value creation. With that, I’ll turn it over to Angela to walk through the quarter in more detail.
Angela Korch (Chief Financial Officer)
Thanks, Rob. I’ll briefly cover the results from the quarter, Our updated fiscal 2026 guidance and spring pass sale results starting with the third quarter results. Weather conditions remained extremely unfavorable in the quarter, which put continued pressure on visitation and revenue across the business. Resort revenue for the quarter declined 7% compared to the prior year, primarily driven by unfavorable weather conditions that impacted visitation and revenue for both local and destination guests, particularly at our resorts in the Rockies and in TAHOE lift revenue declined 5% despite visitation being down 15%, primarily as a result of North
American pass sales increasing 3% heading into the season. Resort EBITDA for The quarter was down 9% as our advanced commitment model, cost discipline and the geographic diversity of our portfolio partially mitigated the larger conditions. Headwinds to expand on the magnitude of the conditions impact even our most committed pass visitation in North America declined 17% over the winter while lift ticket visitation declined 10%. The impact was particularly severe in the Rockies where snowfall for the winter finished down 55% below the 30 year average.
Looking ahead to the fourth quarter, we expect stable demand across our North American lodging and mountain resort businesses during the summer season and we are encouraged by early momentum in Australia where Epic Australia Pass units are up approximately 26% and dollars are up approximately 31%. Turning to full year guidance, we are updating our full year outlook with the resort EBITDA midpoint now at the bottom of the range we provided in March.
Consistent with our April update, we now expect net income attributable to Vail resorts in the range of 128 million to $162 million and resort reported EBITDA in the range of 735 million to $755 million. This change reflects the continuation of historically challenging conditions through March and April which further pressured visitation late in the season. With the reduction in earnings, we now expect our cash taxes to be in the range of 75 million to $85 million.
We remain on track to exceed our initial two year resource efficiency transformation plan of 100 million as we expect to achieve 106 million annualized efficiencies by the end of this year. We also remain on track to deliver an additional 30 million of savings in fiscal 2028 as outlined in our March Investor Conference presentation during fiscal 2026. This translates to an incremental 45 million of efficiencies year over year before 13 million of one time cost.
Our resource efficiency initiatives are providing a modest offset in a weather impacted year and reinforce our commitment to driving structural efficiency across the business. Turning to our Balance Sheet and Capital Allocation despite the difficult operating environment this year, we remain confident in the strength of our cash flow generation and the stability of our business model. Our balance sheet remains strong as we ended the quarter with liquidity of approximately $1.1 billion and net leverage of 3.5 times trailing twelve months EBITDA.
We are also reaffirming our capital plans of approximately $215 million to $220 million in core capital spending and $234 to $239 million of total capital investments as we continue to invest in technology across our gear, ski, school and dining businesses to enhance the guest experience and ultimately to drive long term growth in our business. Our capital allocation priorities remain unchanged starting with reinvestment of the business and maintaining balance sheet flexibility to pursue potential acquisition opportunities followed by returning capital to shareholders.
We maintain the quarterly dividend at $2.22 per share and will remain opportunistic on buybacks as evidenced by the repurchase of approximately 45 million shares year to date on PASS sales. As Rob noted earlier, PASS units in sales dollars through the May deadline were down 10% and 5% respectively, including the impact of tax. Past days sold were down approximately 8%, reflecting a higher mix of unlimited products sold during the period. Past performance to date has been driven by softer demand following the challenging conditions this season, evident in the fact that the weakness has been most pronounced in our more weather impacted destination
markets including Colorado, Utah and Lake Tahoe, as well as among destination gaps that typically travel to the Rockies, which all saw low double digit unit declines. In contrast, we saw much stronger performance in our Eastern US Markets and at Whistler Blackcomb where PASS units were down low single digits. We are seeing positive performance in our new initiatives as the new young adult product introduced this year saw results facing well ahead of other age groups and as I mentioned, our core high value unlimited pass products are outperforming frequency products, all of which reinforces the strength of our value proposition.
We are also seeing better relative performance from newing pass holders and more pressure in past sales within our new segment as reduced visitation this past season has resulted in a smaller conversion audience which is typically a key driver of unit growth during this period. While near term trends likely reflect delayed decision making following a challenging season, we remain confident in the long term growth opportunity given our strong resort network and marketing strategies.
In closing, while the season’s results reflect an exceptionally challenging operating environment, we are confident in the strength of our business model and the progress we’re making on our key strategies. We remain focused on delivering a differentiated guest experience, strengthening our demand model and executing the opportunities within our control over the long term. We believe these efforts position us well to drive sustainable growth and create value for our shareholders.
With that, I’ll turn the call back over to the operator for Q and A.
OPERATOR
Thank you. At this time, if you wish to ask a question, please press Star one on your telephone keypad. You may remove yourself from the queue by pressing Star two Again. Please limit yourself to one question and one follow up and we’ll take our first question from David Katz with Jefferies. Please go ahead. Your line is open.
David Katz (Equity Analyst)
Hi, good morning, good afternoon everyone. Good evening, Good day, wherever you are. I wanted to ask Angela about the comment about the young adult product pacing well ahead of other groups. Could you put some context around, you know, how well that’s doing put some, you know, maybe relative size on, you know, that group’s ability to make a difference and, you know, just some more meat on the bones around that particular comment, please.
Angela Korch (Chief Financial Officer)
Sure, I’ll comment on it. David. I think it’s we’re not going to put more specificity around it yet. We’ll provide more color as we get to the end of the full selling period. But it’s definitely meaningfully outperforming all the other age groups and has been from the beginning. The other comment I’ll share is that what we’re seeing is a good trade up from a lot of other products, of course, into the core EPIC product, which is what we were trying to to do.
So we see that as a real positive as well. In the end, I don’t think it’s not something that will drive our overall results for the year. It’s a mitigator, I think, to some of the other declines that we’re seeing.
David Katz (Equity Analyst)
Right. And frankly, if we were to break up the different cohorts within the past group. Right. Could you maybe give us just a bit more detail across the board on how some of those are doing and what your expectation is for those some up, some down.
Rob Katz (Chief Executive Officer)
Yeah, I think what we’re seeing is pretty, I think as we highlighted as Angela mentioned, I think one of the biggest things that we’re noting is in Colorado, in Tahoe, in Utah and in destination markets, particularly destination guests who visit who visited kind of the Rockies, resorts or typically visit the Rockies, resorts, those are where we’re seeing the biggest declines. And we’re seeing, you know, much, much more modest declines in the Northeast and in Whistler Blackcomb.
And so that really tells us, right. That this is very much a conditions impact from last year as opposed to some broader structural impact. Not surprised that following the season that we just saw that the new segment of our pass sales is down a lot more than renewal. But obviously we’re kind of heartened that the renewal piece is as strong as it is. And I think the other piece that we would mention is just that the unlimited products, which we have been focused on quite a bit since last Labor Day are really outperforming our frequency products and we’re trying to move people from frequency up.
I also would say yes, obviously the frequency buyer is the newer buyer to the overall program, a bit more sensitive and unlikely to buy as early given the conditions that we just went through.
David Katz (Equity Analyst)
Helpful. Thank you very much. Thanks, David.
OPERATOR
Thank you. We’ll take our next question from Sean Kelly with bank of America. Please go ahead. Your line is open.
Sean Kelly (Equity Analyst)
Hi, good afternoon, Rob and Angela. Thanks for taking my question, Rob, I guess big picture, we’re getting a lot of questions that are a little too early on sort of what the impact is of what we learned today on next year’s planning and sort of to not box you in on guidance. Maybe the easiest way to ask it is based on what you know right now. Does this, these results and what you’re seeing on the pass side in particular, does it really change much in terms of how you’re planning for the business staffing for next year and how you’re thinking about the broader operating expense and planning outlook at this stage?
Rob Katz (Chief Executive Officer)
No, it’s not. I mean, I think when you look back historically, what you see is that and this is over a lot of years and you know, both when you look at years where the Rockies did poorly, I think another great example is when two years during the drought that we had in Tahoe and then you look at the year that had normal conditions. Yeah, we see every indication that visitation comes fully back and in some cases surpasses even the year before the bad year like it did in Tahoe.
Some of which I think is pent up demand that gets created during a season like we just went through. You know, that said, during those years when there was no pass programs like we had or have today, and certainly not pass programs to the extent that, you know, we’ve grown them over the last five years. So it’s not surprising to us that you’re going to see some, especially in the spring, delayed decision making. This would be a perfect example of when you’d expect that.
And so at the moment, no, we’re seeing a lot of this as timing between spring and fall or even between fall and the season for lift tickets. It’s, that’s why it’s critical in our minds that we not only have great programs on the season pass side, but also for lift tickets. So we are planning for a normal season next year with normal conditions. Now, that said, as we mentioned and as I mentioned, as Angela mentioned, yeah. We are dealing with an unprecedented anomaly.
So there’s no way that we can be exactly sure what it’s going to look like. But right now there’s no change in our plan planning for next season.
Sean Kelly (Equity Analyst)
Great. And then just as my follow up, I couldn’t help but notice both I think in the release and also in your prepared remarks, you talked about, I think it was a step function improvement on lifts, terrain. You mentioned snowmaking, but I think all of it built around the guest experience. And just wondering if you could either elaborate a little bit more or is there kind of a right time to hear a little bit more about initiatives there that we should look forward to listening into?
Rob Katz (Chief Executive Officer)
Sure. I think what I say is it’s kind of continued investments in the way we have in the past in things like lifts and snowmaking, terrain upgrades to restaurants, things like that. I think where we really see the step change is taking the network of resorts that we have and using technology and new processes to obviously to then elevate through system wide or network wide investments, the experience that guests have. And so that could be like My Epic Gear in terms of completely changing how guests experience gear.
It could be around ski school, like the digitization of Ski School, which is something that we announced. And we have other things that we’re working on that we’ll be announcing kind of in the months ahead. Same thing with food. Other things we’re looking at on food, new things that we’re looking at on how we connect with guests, address guest feedback, how critical and impactful the app is to everybody. And in our minds we can create a bit of an ecosystem around our resorts that we think meets what guests of this generation expect and this time expect, which is technology that really makes new processes, that makes everything easier and better
and eliminates all the hurdles that some people can have when they go skiing, but at the same time doesn’t get in the way of their experience on snow. And we think we’re just uniquely positioned to do that as well as the marketing piece. Obviously we have the ability to market both pass and lift tickets to these guests with a kind of unified marketing approach. But at the same time, and I think we saw some of the benefits of this still elevating each resort’s brand, elevating the experience and unique connection that each resort has to our guests.
OPERATOR
Thank you. Thank you. We’ll take our next question from Molly Baum with Morgan Stanley. Please go ahead. Your line is open.
Molly Baum (Equity Analyst)
Hi. Thanks so much for taking our question. I guess one follow up to you talked about the deferral of pass purchasing. Do you expect heightened trade down to maybe some of the lower frequency pass products if demand does materialize later in the selling season? And I guess to the extent that you can comment, I know not all of these products existed back then, but what have you seen historically after a weaker weather year when it comes to the different past products?
Rob Katz (Chief Executive Officer)
Yeah, I think it’s a little challenging because obviously when the last time Certainly when the Rockies went through this, we actually saw pass growth the following year, but that was at a much earlier stage in the overall pass maturity cycle, and we did not have frequency products like we have today. At this point, I would say that it’s hard to say. I think we’re not seeing trade down in our numbers.
And obviously the strongest performers right now are the unlimited products and higher value Epic products versus regional products. So at the moment, we’re not seeing any of those trends, but we will, you know, we’ll see. You know, I think we’re in a unique moment. You know, in the end, you know, we don’t think this is about people saying that they’re not going to ski next year. We think it’s about people not willing to make that commitment today.
And yeah, obviously unprecedented season that we just went through. So hard to say how it will play out when we get through, you know, the fall.
Molly Baum (Equity Analyst)
Got it. That’s helpful. And then one other one, you know, you talked a lot about, you know, the integration of the app and fiscal bringing my Epic Gear into the app. But as we kind of think about that transition, particularly on the Epic Gear launch, does that transition period creates any notable revenue gap in 2027 as we’re going to lose the subscription revenues, or is there anything to call out there in terms of the volatility we might see? Thank you.
Rob Katz (Chief Executive Officer)
I think what I say on FY27 for my epic Gear is that it’s definitely a transition year where we’re moving from what we were offering to taking kind of the ability to select your own gear and rolling that out for all of our demo skis that we’re going to sell next year. So obviously what I’d say is it’s not from a financial perspective. No, we don’t see any issue there.
From an experience perspective, it’s kind of going from a very small, high touch experience, but very few number of guests, to really rolling it out to that highest end guest, but across a much broader, broader base of skiers. And then in FY28, you would see the full experience with high touch points and everything else being rolled out to everyone who rents.
And then we’ll have gradations obviously, of different parts of the experience at that point, but the ability to select your gear, the ability to have an app and get the gear wherever you want, really reducing all these friction points, the ability, once you’ve gone through and tried on a boot or.
Or use the ski and then you like it, we can actually have that all ready for you without you coming in again, trying anything on or even if we’re delivering it to your unit or condo, we don’t have to. We’ll just drop it off and you can pick it up. It’s not like we have to actually have people go through the process of the fitting. So all of that is really FY28 piece, but FY27 will be the first step towards that.
Molly Baum (Equity Analyst)
Got it. Thank you so much. Thanks.
OPERATOR
Thank you. We’ll take our next question from Arpine Kocharya with ubs. Please go ahead. Your line is open.
Arpine Kocharya (Equity Analyst)
Hi, thanks very much for taking my question. This is somewhat related to an earlier question, but assuming the current trend of down mid single digit in dollar sales for the past product continues, that means the lift part of the business, has to come in at a double digit range for overall to be flattish, which is not, I guess, inconceivable after a tough year, but probably hard to. You’re given some nuggets of positive indicators in the release kind of suggesting that historically visitors seem to come back after a tough year, even after they kind of delay purchase decisions initially, I guess.
Could you talk to the potential or perhaps path for the Lyft business to grow at a double digit range based on historical patterns, but also programs you might have in plan for getting lift visitors. And then I have a quick follow up.
Rob Katz (Chief Executive Officer)
Yeah, I think if you look back, I mean, what I’d say is maybe the reverse of this. Right. So when we were growing season pass revenue, you know, 20 plus percent per year in the double digits for a long time, we absolutely saw a significant decline in lift ticket visitation as people moved from passes, from lift tickets to passes.
And so we do think we have every opportunity to see strong growth in lift ticket visitation if the pass business comes down. So we do think there’s a fluid movement between the two products. Doesn’t mean that it’s perfect. It doesn’t mean, I can’t exactly say because obviously we’re in a unique environment, exactly how that will play out. But we don’t think there’s any kind of artificial cap to how we can drive lift ticket growth.
It really comes down to what the demand is. And I think for us the key thing was having products available for people at more accessible price points. And so there, I think certainly our epic friend tickets, the super advanced lift tickets that had performed very well and obviously only in its first year, not a ton of awareness. So we see that as a huge opportunity for next year.
We were very selective last year in picking certain resorts and certain time periods to be more aggressive on specific lift ticket products. And I think you’ll continue to see us do the same thing ahead of going into next year. Now that said, it’ll always be that the best deal is going to come from a pass.
And so as we get certainly towards the end of the pass selling season, we will make sure that we’re reminding everybody of that fact before we go into next year. And obviously we do have our turn in your ticket program where folks who might have used an epic friend ticket this year or bought any lift ticket can obviously use that to buy a pass as they go into next year.
Arpine Kocharya (Equity Analyst)
Okay, that’s helpful, thank you. And then could we go over the levers you have to protect EBITDA given mid single digit range decline so far, at least in past product, seems like you might see that improving a little bit later in the season. But sort of top line dynamics, but also cost side of things. What kind of underlying cost inflation we’re looking at and how you look at shape of that EBITDA recovery after an anomaly here with an underlying understanding that ultimately a lot also depends on strength of the Lyft business once we get there, I guess.
Rob Katz (Chief Executive Officer)
Yeah. Well, first of all we’ll go into next into FY27 with an opportunity to really see the kind of run rate improvement in our resource efficiency transformation efforts. Because obviously we’re delivering on all of that for FY26, a portion of which will really roll into FY27. Then we’ll have new initiatives that we’ll be talking more about as we go forward. A portion, most of that will be FY28, but a portion of that will also hit FY27. And then obviously, yeah, I think we have given a unified approach that we take towards how we schedule labor and all of our workforce planning.
We can be nimble with labor to the extent that we see that visitation declines. But we’re going into next season looking for full staffing and really expecting, you know, assuming that the conditions are good. Yeah. That we’re going to get that full visitation. So we’re not going to pull back on the guest experience. But I think as we saw this year, yeah, we, you know, if that’s what happens, we certainly can make adjustments, but that’s not what we’re going to be planning for.
Arpine Kocharya (Equity Analyst)
Thank you very much. Thanks.
OPERATOR
Thank you. We’ll take our next question from CNCU with BNP Paribas. Please go ahead. Your line is open.
CNCU
Hi guys. Thanks for the question maybe kind of going, continuing on to the past selling season as you kind of go through the rest of the year or summer, like, how do you think are you changing any of the maybe strategies or like, marketing to kind of drive a little bit of an acceleration or is it kind of using the same maybe, like, marketing approach as you have the last maybe a couple months?
Rob Katz (Chief Executive Officer)
Yeah, I would say that we, you know, we’re constantly looking at whatever our results are for, you know, the last deadline especially, and saying, okay, what did we learn? What can we do differently? Where can we lean in more one place or another? And we’re taking all the learnings that we have in this spring and we’re going to put them to work as we go through Labor Day and through the rest of the season. And I do think we have opportunities, you know, some of the new approaches that we launched post Labor Day last year, we have an opportunity obviously, to put those in along with the learnings that we have through spring into this year’s Labor
Day. And yeah, we’re, you know, in the mid-year, we tend not to make big product changes because we feel like, yeah, it’s critical for everyone to be making decisions on the product set that we have and important that the folks who buy earlier always get the best deal. We’re not going to change from that. But in terms of how we go to market, in terms of the dollars that we invest on media, yeah, that is always going to be about the numbers that we’re seeing.
And we did see good results from the incremental dollars that we put to work last fall. We saw good returns from the incremental dollars that we put together that we put to work this spring. And so that’s definitely going to be front of mind as we go into the fall.
CNCU
Okay, got it. Thanks. And then maybe going continuing on to the question around the kind of lift or window ticket demand into next year. So as you mentioned, following a kind of challenging season, you might expect conditions to normalize a visitation to recovery. And I guess if past units are down a bit and maybe then that means that Lyft window tickets are higher.
I guess in a way that also creates a positive mix effect where like maybe the price per window ticket visit maybe is higher. Is that something we should be thinking about in terms of like, I guess, the incrementality of window ticket visitors into next year in terms of ebitda?
Rob Katz (Chief Executive Officer)
Yeah. Yes, absolutely. And I would say it’s important to remember that, yes, we’re down 10% units, 8% in days sold after this ridiculously horrible winter, we’re still so far ahead of where we’ve been in any previous bad season in terms of advance commitment in total. So if you think about how much advance commitment we have at this point, point in front of next year versus any year we’ve had historically.
Yeah, like where we’ve had a bad season like this. No, no, no. We’re well ahead. So actually in some respects we’re in a much stronger position as we’re thinking about next season, even though we had a bad year last year. And yes, there is the opportunity, if somebody is going to not buy a pass and is going to wait to buy a lift ticket, even at the lower prices that we’re putting out for lift tickets, they’re going to be paying more.
And so that is absolutely. Our lift ticket effective ticket price will go up. Sorry. Our overall effective lift ticket, our overall effective ticket price will go up as they move from pass to lift tickets. Now that said, that’s not what we want. We still want people to be in the advance commitment bucket, but yeah, we have to have every lever available to us.
CNCU
Great, thanks. Good luck.
OPERATOR
Thank you. We’ll take our next question from Jeff Sanchel with Stifel, please. Go ahead. Your line is open.
Jeff Sanchel (Equity Analyst)
Hey, good afternoon everyone. Thanks for taking our questions. Maybe starting off on past sales, if we go back to this time last year, Rob, I think you talked to some resilience and purchasing behavior through Labor Day and some of that choppiness we were seeing back then in consumer sentiment. Obviously weather is going to be the bigger impact so far this year. But just curious if you think that macro uncertainty may be factoring in as well. If you look at trends so far this selling season and then historically, can you just remind us what do you typically see when gas and flight costs are higher?
What sort of impact do you see to visitation behavior across the local and destination cohorts during the season?
Rob Katz (Chief Executive Officer)
Yeah, sure. I’d say right now tough to break out any kind of macro impact from the weather impact and by the conditions impact from last year. And I think based on some of the data we were talking about in terms of how Whistler is doing or the east versus other markets, definitely seems like this is much more of a conditions driven decline. I think when you look back historically, obviously the further you travel, the harder. So a lot of times you do see people, if they have an issue with the plane cost, they may drive.
So we may see more and stronger local visitation. At the same time, a lot of people won’t go and fly internationally to the extent that the cost of those flights are even higher. And obviously we’re seeing some cutback on some of the European flights and things like that, Asia. So ultimately that could help the overall destination, the U.S. destination, North American destination business here. So I think we, you know, our business provides a natural hedge of sorts, I think, in tougher economic times because of how core, you know, kind of skiing is and the kind of recreation component of our business.
It’s not all just vacation spend. But in the end right now, I think, you know, it’s hard to say what the overall economic environment, environment will be next year. And so we’re focused much more on the kind of unique situation we’re dealing with rather than the overall economic environment right now. That’s great.
Jeff Sanchel (Equity Analyst)
And then you actually, I think you touched on this a little bit, but that’s a correlator, a question that we get from investors all the time is sort of how much impact the transatlantic or trans Pacific outbound skier travel is having on visitation just given that value proposition and what seems to be a lot of word of mouth marketing benefit over the last year, two or three years.
Rob, I’m curious, when you look at the data, how material do you think this trend truly is versus just more of a narrative thing? If it is material, obviously flight costs and things like that are going to help you if they stay where they are. But more in terms of the levers that you can pull, is there any opportunity, whether it’s in the marketing strategy or otherwise, to go after this lapsed guest base that opted for international?
Rob Katz (Chief Executive Officer)
Yeah, we don’t see that as a material driver. Right. And obviously we have data because our passes provide access both in Europe and in Asia, and we’re not seeing a material increase in the usage of that. I think in unique locations, yes, it can be meaningful to a resort in Europe or Asia’s US business, they can see a real increase.
But in terms of the overall visitation that’s happening in, in the kind of North American ski industry, no, I don’t think it’s material either way. I think it’s a kind of nice kind of bucket list type thing that people add on every now and then. But it is not really replacing the normal visitation. I would say the other side of it, which I don’t think is changing anytime soon.
But really what we’ve seen over the last five to seven years is a decline in inbound visitation into the US and so between lots of different factors, part of it, the US dollar, others just the overall inbound tourism, which is not just about skiing but about everybody in tourism. I think that is the much bigger trend that international visitation to the US For a lot of travel, but certainly for the ski industry has gone down a lot.
And so if there’s any normalizing trend ultimately over time time, that is our hope. And I know that in addition to us, there’s lots of other people in the US travel business trying to promote that.
Jeff Sanchel (Equity Analyst)
Thanks very much. Thanks.
OPERATOR
Thank you. We’ll take our next question from Ben Chiakin with Mizuho. Please go ahead. Your line is open.
Ben Chiakin (Equity Analyst)
Hey, thanks. Maybe one on cost. The midpoint of the new guide implies EBITDA down 12 with a cost base of just over 2 billion. As we think about next season, other than inflation, how should we think about the flow-through of any incremental revenues? And then separately, are there any moving parts you would flag?
I guess. For example, were there any one time areas you pulled back this year we should consider that need to come back as revenue presumably returns?
Angela Korch (Chief Financial Officer)
Yeah, thanks for the question. I think the biggest piece to think about is there’s obviously a variable component that we had this year of where we yeah, we were able to manage to the demand levels in the revenue that of course would come back with revenue as you would expect outside of just kind of inflation on our base operating cost. And then as Rob mentioned, we have the year over year benefit going the other way on our resource efficiency transformation.
Expect to be at that $106 million relative to about. Right. We were at the 82 cumulative point this year. So you’ll see a year over year benefit from that. Outside of that, it’s really other things that just normally track with request performance, things like our performance management compensation that you should think about will return obviously in a normal environment next year.
Ben Chiakin (Equity Analyst)
I guess maybe following up on that, I guess you were referring to variable cost components associated with visitation. Correct. Or just a little on revenues.
Angela Korch (Chief Financial Officer)
Say that again. Yes, the variable costs that go with the revenue.
Right. Things like credit card fees and taxes and all of those types of things that go with the revenue that we would expect to come back with visitation returning.
Okay, and then maybe just one from a modeling perspective, I think this year saw what presumably is elevated effective ticket price. I assume that’s basically just from season pass dollars juxtaposed against lower visitation from weather. I guess. Am I thinking about this correctly and is there any way you could help us quantify this drag next season and then any other offsets you would consider thanks. Yeah, you’re correct. The effective ticket price this year, when we have pass visitation in North America down 17%, but obviously had the revenue locked in, that is having a very large impact on effective ticket price overall.
So what I would do is I would separate out the pass revenue piece from the lift ticket piece to really get more of a comparative of what you would expect. And in terms of the pricing change year over year versus just. Right. The visitation impact from the current season.
OPERATOR
Thanks. Thank you. We’ll take our next question from Anthony Blondio with Wells Fargo. Please go ahead. Your line is open.
Anthony Blondio (Equity Analyst)
Yeah, hey guys, thanks for taking my question. I just wanted to ask about past trends versus peers. I think you mentioned past sales are outperforming others in the industry. So can you just dig into that a little bit? Just anything to frame the magnitude there and the different drivers of that delta?
Rob Katz (Chief Executive Officer)
Yeah, it’s hard for us to, you know, obviously there’s no perfect information on that since we’re the only one that’s publicly reporting, but we’re basing that on just, you know, some third party entities that try and track transaction volume and other things in the marketplace. Yeah. So it’s hard to speak with a lot of precision on any of it. But to the extent. Yeah. That we are outperforming, we do think it’s from all the things that we did going into this pass selling season, which is we’re spending more on media, we have the young adult pass, which we think was really priced well.
We also think the message of that young adult pass was a really strong message for us as we went through this season. And we also just leaned into completely new marketing tactics and approaches than we had last spring because a lot of the new things that we started doing really were last fall. And so we feel like that helped as well. And you know, we had a really strong year in terms of guest experience at our resorts. Even with, I think the down snowfall and conditions that were tough.
I think, I think there was a sense of broadly that on the things we could control this season, I think we did really well. I certainly feel that way and I think a lot of our guests feel that way. And I think that gives confidence, you know, that as we go into next season. Yeah. That we will of course, put the. Put everything we have into making it the absolute best season possible. Got it.
Anthony Blondio (Equity Analyst)
That’s helpful. And then just maybe on M and A, can you just talk about what you’re seeing out there from an M and A perspective? Maybe how the abnormally poor season Might be influencing decision making from operators that might be looking to sell assets.
Rob Katz (Chief Executive Officer)
Yeah, I’m not going to comment on M and A, I never do. But in terms of specificity, but I would say historically I have not seen situations where down either economic years or down snow years trigger people to immediately sell. I think everybody feels like no one wants to selling in a down year. I think sometimes it reminds people though that you can have these tough years. And so sometimes the year after, even two years after, there’s a different mindset of ownership.
Obviously, a lot of resorts have transacted in North America over the last couple of decades. So a lot of the folks that are still owning resorts, I think are doing so because this is a long-term family commitment that they have. So whether a year like this is going to impact them is kind of unclear.
Anthony Blondio (Equity Analyst)
Thanks so much, guys. Thanks.
OPERATOR
Thank you. We’ll take our next question from Patrick Scholes with Trua Securities. Please go ahead. Your line is open.
Patrick Scholes (Equity Analyst)
Hi, good afternoon. Rob, Angela and everyone. Can you just talk a little bit more about this?
I believe a new inclusion of a KPI called ‘Days Sold’. And certainly it comes with a footnote on it about some metrics in there. Talk a little bit about why. Including that now, I assume has to do with the prevalence of frequency products, but a little bit more color on that and anything else we should be thinking about when watching that KPI specifically. Thank you. Yeah, I think it is something that we’ve been looking at internally for a while and it obviously tries to say we’ve been reporting on units, but if you sell an Epic Pass or an EPIC Local pass, that’s one unit.
If you sell an Epic One Day, that’s also one unit. That’s the way we’ve been tracking it. But obviously those are two completely different products. And so internally we’ve been tracking Days Sold because it tells us how many days of skiing we have. Now, that said, we of course don’t know when we sell a product, how many days they’re going to use it. So just for simplicity, internally and now we’re sharing it externally, it highlights that if we are mixing up in the kind of frequency of that unit, so to speak, then that will show up in the days sold versus just units.
So I think we started talking about that publicly at these investor conference and I think we said talked about that we might continue to report on that. And we’re going to. And in the end, it is what we track most closely in terms of thinking about overall revenue and how many visits we’re going to get out now, obviously it’s important to us. The units are important too, because we like to see all the guests. Obviously that’s kind of a transaction piece.
So still important, but not quite as important as the days sold, which tracks just a little closer to how much volume people are buying. Thank you.
OPERATOR
Thank you. We’ll take our next question from Brett Montour with Barclays, please. Go ahead. Your line is open.
Brett Montour (Equity Analyst)
Hi, everybody. Good afternoon and thanks for taking my question. So, Rob, you mentioned the turn in ticket program, the epic buddy ticket program, and I apologize if I missed this, but how are those programs being utilized so far? Is it in line with your underwriting better or worse? And just given the nature of those products and who owns those options, is there an obvious characteristic as to when you think they would turn them in to buy the pass throughout the cycle here??
Rob Katz (Chief Executive Officer)
Yeah, I guess what I’d say is, yeah, it’s kind of early because a lot of that is going to, we think probably happens later. But right now, yeah, we’re seeing improvements in both the turn in your ticket categories across the board. But obviously, ultimately we need to see how it goes out through the remainder of the season because the selling season surpasses. So it’s a little early to say. And both of those programs performed really well from our standpoint on a relative basis.
But obviously we didn’t see the full benefit of them because of course, overall visitation was lower and we had serious headwinds with conditions. But on a relative basis to other lift ticket products, they did well. But from a ‘turn in your ticket’ perspective in terms of the impact they can have on the pass business, we would really need to see like a normal full season and see how many people actually buy it in that context and then how many people convert into passes following that.
So this will be a tough year to make a full assessment of it. But the flip side to it, I would say we felt really good about introducing some of these new aggressive products last year in what turned out to be a tough winner, because obviously it allowed us to have products that we were promoting that made it easier for people to buy. And I’d say that’s the same thing with passes. Obviously, it is a tougher pass selling season right now. And so the fact that we have these other avenues for people to get in, we see as all a positive.
Brett Montour (Equity Analyst)
Okay, fair enough. A second question would be on the competitive environment. You guys seem like you’re gaining share in terms of pass sales versus your competitors. And specifically in that younger cohort where you guys adjusted the price lower. Do you have any concern that competing systems that are doing worse than you right now may get more aggressive in their pricing or promotions, especially in that younger cohort, Try and win some share back.
And how that could sort of impede your ability to try and improve past sales throughout the next three to five months?
Rob Katz (Chief Executive Officer)
Yeah, what I said, of course, I have no idea. Right. It’s hard to know. And I think we take our approach. Part of it, there’s a little bit of competitive dynamic that we’re looking at there. But part of it, I think, as we shared in the investor conference, was we looked at how much we increased PASS pricing over the last four years in both adult and young adult.
And what we realized was in the adult category, yes, actually, we did quite well on that, but in the young adult category, we didn’t. And so in a way, this is almost like a rollback of some of the increases that we took before. You know, look, I think one of the benefits we have, and, you know, again, I have no idea how other people are going to make pricing decisions, and, you know, that’s obviously on them.
But one of the benefits we have here is that because we own all of our resorts and have only limited partners, when we increase or decrease price, we’re not constrained by the relationship that we have with the partners or how we’re paying them or not paying them or how we’re spending on media or not all of those things are easier.
We also get the benefit of ancillary in all of our resorts, not just in the owned resorts or a limited number of resorts in the past. So to the extent that we’re being more aggressive with young adults, no matter where they ski, largely in our North American network, we’re getting the benefit of that lift. Full 100% of lift revenue, plus we’re also getting the benefit of everything they spend on the mountain.
So I can see how that makes it a little bit trickier if you don’t have that setup. And I think the same is true. Right. For all these other things that we’re doing as we move back and forth between PASS and lifticates is we’re doing this in a very holistic manner. It can be harder to do when it’s a little bit more Balkanized. So for us, in the end, we’re not really in a reactive mode at all. We’re really in a how do we optimize?
And I think we said that when I first came in. We were looking to optimize our PASS portfolio and make decisions that were pretty independent of what others were doing.
Brett Montour (Equity Analyst)
Great. Thanks for the thoughts, Rob.
OPERATOR
Thank you. This concludes the Q and A portion of today’s call. I would like to now turn the call back over to Rob Katz for closing remarks.
Rob Katz (Chief Executive Officer)
Thank you. While this year presented weather challenges and tougher financial results, it also sharpened our focus and reinforced the work we’re doing to address the end to end guest experience from marketing to products to the entire on-mountain experience. On that point, I want to thank our frontline teams and for their unwavering dedication throughout this exceptionally challenging season. As we look ahead, we built an integrated network and platform that positions us to deliver a consistent, differentiated guest experience, strengthen loyalty and drive long term growth.
This network allows us to deliver a more consistent experience at every touch point at scale which remains the heart of everything we do and I’m confident will drive us to the next phase of our growth. Thank you all for your time today.
OPERATOR
Thank you. This concludes today’s Vail Resorts Fiscal Third Quarter 2026 earning Conference Call and webcast. You may disconnect your lines at this time and have a wonderful.
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