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Ron Baron Comments on Vail Resorts

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May 09, 2022
Summary
  • The stock declined 20.3%.
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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.

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I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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