Shares of ski resort owner Vail (MTN, Financial) declined 20.3% and hurt performance by 93 basis points. This was due to poor early-season snow and labor shortages that negatively impacted customer service, raising investor concerns over season pass renewal rates. However, we retain conviction. Vail raised its minimum wage from $12 to $15 per hour this season and announced plans to make serious inroads into the staff shortage situation for the 2022–2023 season with another minimum wage bump to $20. We think this should enable Vail to fully staff next season and provide a better experience for skiers while leading to stable renewal rates on pass sales.
Shares of ski resort owner Vail Resorts, Inc. declined due to poor early-season snow and labor shortages that negatively impacted customer service, raising investor concerns over season pass renewal rates. We retain conviction. Vail raised its minimum wage from $12 to $15 this season and announced plans to make serious inroads into the staff shortage situation for the 2022–2023 season with another minimum wage bump to $20. We think this move should enable Vail to fully staff next season and provide a better experience for skiers while leading to stable renewal rates on pass sales.
From Ron Baron (Trades, Portfolio)'s Baron Focused Growth Fund first-quarter 2022 letter.
