Vail Resorts Inc (MTN) Q1 2021 Earnings Call Transcript

Vail Resorts Inc  (NYSE: MTN) Q1 2021 earnings call dated Dec. 10, 2020

Corporate Participants:

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

Analysts:

Felicia Hendrix — Barclays — Analyst

Shaun Kelley — Bank of America — Analyst

Chris Woronka — Deutsche Bank — Analyst

Laurent Vasilescu — Exane BNP Paribas — Analyst

Patrick Scholes — Truist — Analyst

David Katz — Jefferies — Analyst

Paul Golding — Macquarie Capital — Analyst

Alex Maroccia — Berenberg — Analyst

Ryan Sundby — William Blair — Analyst

Presentation:

Operator

Good day and welcome to the Vail Resorts’ First Quarter 2021 Earnings Call. [Operator Instructions]

At this time, I would like to turn the conference over to Rob Katz, CEO. Please go ahead, sir.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thank you. Good afternoon, everyone. Welcome to our fiscal 2021 first quarter earnings conference call. Joining me on the call this afternoon is Michael Barkin, 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 that 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, December 10, 2020, and we undertake no duty to update them as actual events unfold.

Today’s remarks 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 10-Q were filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com.

So with that said, let’s turn to our fiscal 2021 first quarter results. Our results for the first quarter continued to be negatively impacted by COVID-19. In Australia, Hotham and Falls Creek remained closed for the entire quarter following the issuance of stay-at-home orders by the Victorian government on July 8, 2020, resulting in a significant decline in revenue compared to the prior period. At Perisher, visitation trends improved relative to July 2020 as available terrain increased, but results continued to be negatively impacted by COVID-19 and related capacity constraints.

In North America, our US resorts experienced improved demand from leisure travelers throughout the quarter relative to the fourth quarter of fiscal 2020, but summer visitation remained well below historic levels. At Whistler Blackcomb, demand remained significantly below prior-year levels due in part to travel restrictions, with the Canadian border remaining closed the entire quarter to international guests including guests from the US.

We continue to maintain disciplined and rigorous cost controls throughout the quarter to partially mitigate the reduced revenue levels. Resort net revenue for the first quarter declined $132.1 million compared to the prior year, while resort reported EBITDA declined only $18.1 million over the same time period, reflecting cost reductions driven by a combination of reduced seasonal labor and expenses, as well as significant overhead cost saving actions.

First quarter resort net revenue includes the recognition of approximately $15.4 million of lift revenue related to the September 17, 2020 expiration of unredeemed credits offered to 2019/2020 North American pass holders for which we deferred a total $120.9 million of revenue from our prior year pass sales and which would have otherwise been recognized during fiscal 2020. We expect to recognize the remainder of the deferred revenue associated with the Credit Offer as lift revenue primarily during the second and third quarters of fiscal 2021.

Turning now to our 2020/2021 North American season pass sales. As we approach the end of our selling period, season pass sales for the North American ski season increased approximately 20% in units and were flat in sales dollars through December 6, 2020 compared to the prior year period ended December 8, 2019. With sales dollars for this year reduced by the value of the redeemed credits provided to 2019/2020 North American pass holders. Without deducting for the value of the redeemed credits, sales dollars increased approximately 19% compared to the prior year. Pass sales results are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.78 between the Canadian dollar and US dollar in both periods for Whistler Blackcomb pass sales. Pass sales are reduced by the amount of Epic Coverage refund requests processed through December 6, 2020, but do not include any estimated reductions for future Epic Coverage refunds.

We are very pleased with the growth in our season pass program, particularly given the challenging circumstances surrounding the impacts of COVID-19. We expect that the total number of guests on all advanced purchase passes this year will exceed 1.4 million including all passes for our North American and Australian resorts, demonstrating the significant loyalty of our guest base and the strong demand for our mountain resorts. Since September, pass sales exceeded our expectations, primarily driven by continued strong demand from destination guests and significant growth in pass sales to guests who were not previously in our database, particularly in lower frequency Epic Day Pass products.

For the full pass sales season, we saw very strong unit growth broadly across our destination markets. We also saw solid unit growth in our Utah, Northern California and Whistler markets and in Colorado saw comparable performance to last year. The primary driver of our unit growth was from renewing pass holders, given the credit incentive offered for renewing guests, but we also saw strong growth in new pass holders with particularly strong growth in pass sales to guests who were not previously in our guest database.

We saw strong growth in our Epic Pass and Epic Local Pass products and very strong growth in our Epic Day Pass products, demonstrating both the guest loyalty we have created in our core programs and the success of our long-term strategy to move new and less frequent guests into our pass products. But we expect that some of our Epic Day Pass growth may be the result of the circumstances surrounding this season. We also believe that the growth from new guests into our pass products this year will accelerate our ability to move guests into advanced commitment into the future.

The success of our total program this year has been supported by the value proposition of our pass products and the steps taken to address the current environment, including our pass holder credits, extended deadline, the reservation system, new Epic Coverage program included with the purchase of every pass product for no additional charge, continued data driven marketing efforts, the inclusion of Peak Resorts in our network and a second year offering our broader Epic Day Pass products.

The safety of our guests, employees and communities continues to be our top priority. As previously mentioned, we implemented operating procedures that we believe will enable us to operate safely across our 34 North American ski resorts throughout the season, including the implementation of a reservation system for our guests. Currently, the reservation system, which opened to the pass holders on November 6, 2020 and lift ticket purchasers on December 8, 2020 continues to have available capacity for almost all days during the core season across our resorts. Reservation system and our contingency planning around our operations has positioned us to react quickly to the changing circumstances surrounding COVID-19 restrictions across our resort jurisdictions, which we expect will continue throughout the season.

Now, I would like to turn the call over to Michael to further discuss our financial results, liquidity and fiscal 2021 outlook.

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

Thanks, Rob and good afternoon, everyone. As Rob mentioned, our results for the first quarter were significantly impacted by COVID-19 and the resulting impacts to our Australian and North American mountain resorts.

Net loss attributable to Vail Resorts was $153.8 million or a loss of $3.82 per diluted share for the first quarter of fiscal 2021 compared to a net loss attributable to Vail Resorts of $106.5 million or a loss of $2.64 per diluted share in the prior year. Resort Reported EBITDA was a loss of $94.8 million in the first fiscal quarter which compares to Resort Reported EBITDA loss of $76.7 million in the same period in the prior year, primarily as a result of the negative impacts of COVID-19.

Our liquidity position remains strong to mitigate further disruptions from the impact of the COVID-19 pandemic, with total cash and revolver availability as of November 30, 2020 of approximately $1.2 billion, with $614 million of cash on hand, $419 million of US revolver availability under the Vail Holdings Credit Agreement and $169 million of revolver availability under the Whistler Credit Agreement. As of October 31, 2020, our net debt was 4.1 times trailing 12 months total Reported EBITDA. We continue to expect to have sufficient liquidity to fund operations through at least the 2021, 2022 ski season, even in the event of extended resort shutdowns.

Now turning to our outlook for fiscal 2021. Given the uncertainty COVID-19 has created for travel demand, operating restrictions and the ultimate visitation to and spending at our resorts. The Company will not be providing full year guidance for fiscal 2021 at this time. That said, we are very pleased with the results of our season pass sales and the strong foundation of visitation and revenue that creates heading into the season. Given the challenging dynamics associated with COVID-19, we continue to expect material declines in visitation to our resorts and associated revenue declines in fiscal 2021 relative to our original expectations for fiscal 2020, primarily as a result of expected declines in visitation from non-pass lift ticket purchases due to reduced destination visitation with more material declines specifically among international guests.

While we expect that mandated capacity limitations will have a negative impact on our visitation during peak periods, we expect the primary driver of visitation declines for the North American ski season to be a result of reduced travel demand. We expect additional negative impacts to visitation in select regions where heightened restrictions exist, including Whistler Blackcomb, given Canadian border closures and domestic travel guidance, and Vermont as a result of the quarantine policy for out-of-state travelers. We also expect significant negative financial impacts on our ancillary lines of business, materially in excess of the decline in visitation as a result of significant COVID-19 limitations and restrictions particularly in food and beverage and ski school.

In food and beverage, we have recently reduced capacity at our restaurants and have limited many of our on-mountain restaurants to grab and go options. In ski school, we have reduced group sizes and at many resorts eliminated full day and other select lesson types in response to COVID-19 limitations and restrictions.

Since the start of COVID-19 disciplined cost management has been a primary focus with significant actions taken to date to tightly manage our costs with reduced revenue expectations. We have implemented operating plans that actively manage our expenses, while maintaining a high-quality experience for our guests, and we remain confident in our ability to deliver against the cost structure variability previously outlined in our September 2020 earnings release.

I’ll now turn the call back over to Rob.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thanks, Michael. We remain committed to reinvesting in our resorts, creating an experience of a lifetime for our guests, and generating strong returns for our shareholders. We plan to maintain a disciplined approach to capital investments, keeping our core capital at reduced levels given the continued uncertainty due to COVID-19.

We will announce our complete capital plan for calendar-year 2021 in March 2021, but we are pleased to highlight several signature investments planned for the 2021/2022 North American ski season which were previously deferred from calendar year 2020 as a result of COVID-19 and are subject to regulatory approvals.

In Colorado, we plan to move forward with the 250 acre of lift service — lift-served terrain expansion in the McCoy Park area of Beaver Creek. The new lift accessed beginner and intermediate bowl experience is a rare opportunity to expand with highly accessible terrain in one of the most idyllic settings in Colorado and will further differentiate the high-end, family focused experience at Beaver Creek.

At Breckenridge, we plan to install a new four-person high speed lift to serve the popular Peak 7. This additional lift will further enhance the guest experience at the most visited resort in the US and will significantly increase guest access and circulation for the intermediate terrain on Peaks 7 and 6. At Keystone, we plan to replace the four-person Peru lift with a six-person high speed chairlift in order to increase capacity out of a key base area of the resort and improve guest access, circulation and experience at one of the top performing resorts in the US.

At Crested Butte, we plan to replace the two-person fixed-grip Peachtree chairlift with a new three-person fixed-grip lift that services beginner terrain at the base of the resort and will improve uplift capacity. Additionally, we plan to improve the grading of the terrain serviced by the Peachtree lift to create a more consistent experience for our beginner and ski school guests.

At Okemo, we plan to complete a transformational investment including upgrading the Quantum lift from a four-person to a six-person high speed chairlift, relocating the existing four-person Quantum lift to replace the Green Ridge three-person fixed-grip chairlift. These investments will greatly improve uplift capacity, further enhance the guest experience and complete our $35 million capital plan for Triple Peaks.

We will also continue to invest in Company-wide technology enhancements to support our data driven approach and corporate infrastructure which will improve our scalability and efficiency as we work to optimize our processes, business analytics and cost discipline across the network. In particular, we intend to invest in a number of upgrades to the infrastructure of our guest contact centers and bring a best-in-class approach to how we service our guests through these channels. Our call centers and chat functionality were not well suited to handle the more than fourfold increase in call and chat volume we saw over the past six months, which created a challenging experience for our guests. We will also continue to invest in ongoing maintenance capital to support our infrastructure across our resorts.

We plan to spend approximately $4 million on integration activities, primarily related to Peak Resorts. In total, we expect our capital plan for calendar 2021 will be approximately $110 million to $115 million, excluding one-time items associated with integrations and $11 million of reimbursable investments. Including these one-time items, we expect our total capital plan will be approximately $125 million to $130 million. We will continue evaluating our calendar year 2021 capital plan as the season progresses including potential opportunities to increase the planned level of investments and will be providing further detail and updates in March 2021.

We remain confident in the long-term prospects of our business model that is built on the loyalty of our guests, the strong line-up of season pass products that provide access to our irreplacable network with world-class resorts and a sophisticated data-driven marketing approach we use to communicate with and attract our guests. Our strong capitalization positions us to continue to invest in our people, our resorts, and the guest experience while remaining flexible to manage through the evolving circumstances caused by COVID-19.

I would like to thank all of our employees for their passion, hard work, and commitment to creating a safe, exceptional experience for our guests. While this always lies at the center of our success, it has never been more tested than over the challenges of the past nine months and in what lies ahead for the upcoming season. I take tremendous pride in our team’s full engagement in balancing the new needs and requirements of all our various stakeholders in an ever-changing internal and external environment. While nothing we do is ever perfect, and it can always be improved, it’s very clear how all of your efforts consistently remain guided by the same core values that have been at the center of our Company since it’s founded.

At this time Michael and I would be happy to answer your questions. Operator, we are now ready for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We’ll take our first question from Felicia Hendrix with Barclays.

Felicia Hendrix — Barclays — Analyst

Hey, good afternoon and thanks as always for all the color. The first question I have is, on your — this upside surprise on the season pass sales. As you outlined, the major difference between your original expectation was the destination demand and new demand particularly in the day passes. Just wondering, is there any way to kind of parse through that, like when you are — when you gave the guidance for where you thought given pass sales would end up in last quarter. What were you expecting to happen, and what was different. I mean, if you just give us more information, I mean you told us what was different, but if you could kind of parse through that. And then also, I see that you just extended the cut-off date for the pass overall, so why?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

So, I guess on the first piece sort of I would say is, we — I guess, there were two components. One component was, the renewal pass holders and we felt like we were going to — we had pulled forward a lot of renewals and that we were not going to see as many renewals from September through December as we did last year and that turned out to be true.

I think the second piece was trying to assess the conversion of people who are in our database, either in a lapsed pass or paid ticket last year or last paid ticket and trying to assess their propensity to buy a pass this year. And I’d say, we were again largely in line with that. I think the hardest thing for us to forecast was people who are not in our guest database at all. So we don’t really have any history on them to assess.

We do obviously call new people in every year. Obviously, there was a case to be made that because of lift tickets being more restricted this year that maybe we wouldn’t move some of those folks. And on the other hand, because of COVID-19, these would typically be lower probability conversion opportunities for the Company. And so I think we were just conservative about given the environment we were going into. And ultimately, it was really accurate that drove a lot of the upside from our expectations in September that we saw particularly in the Epic one to three day products and obviously that product is the only unit in the second year. We had — we have high hopes for that product line, we want it to do exactly what it did this year. But again, hard to always tell with something that new and even harder when you’re in the middle of a pandemic. But obviously, we’re quite pleased to see that.

On the pass deadline, the pass deadline was scheduled to be December 6, then — and it was kept as December 6. I think the only thing that we did was we extended for about a week. The opportunity for people to pick their Epic Coverage priority reservation days. So that we just gave people a little more time to make the selection in terms of how Epic Coverage would work for their situation.

Felicia Hendrix — Barclays — Analyst

Okay. Thanks. And then just can you remind us for Whistler, what percentage of that is of your visitation and or EBITDA? And then overall, what percentage of your, I guess visitation is destination versus local?

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

Yeah. We don’t break out by resort at this point, because of the nature of the Epic Pass being allocated across the entire network. If you look at where Whistler was when we did the deal, roughly about half of their business came from the US or international. So it’s about half domestic Canada and about half non-Canadian and that’s about as much as we can provide at this point.

Felicia Hendrix — Barclays — Analyst

Okay. And then just on the overall Company what percentage would be visitations, destination versus local?

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

Yeah. We actually haven’t updated that with Peak, so I don’t have a new number for you on that. We were, for our destination resorts, we skewed a bit over half on destination versus local in our last numbers that we put out.

Felicia Hendrix — Barclays — Analyst

Okay. Okay, thank you.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. Thank you.

Operator

Thank you. We’ll take our next question from Shaun Kelley with Bank of America.

Shaun Kelley — Bank of America — Analyst

Hi. Thanks, everyone. Good afternoon. Rob, just to kind of stick with the first part of the last question. Wondering if you could just give us a little bit of color, when you talk about this new customer cohort that sort of came into the past. I mean, I know you don’t know that much about them, but I think you’ve broken them down a little bit by the type of product. It seems like they are most attracted by the 1 to 3 day product. But are they regional or destination in nature, just for that new cohort or kind of what are you thinking about how valuable that group set could be kind of going forward, even after the season?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I would say a very much a destination guests. We certainly do know that. And I think coming from a broad array of market across the country. And I think this is again something, I think the good news for us was, obviously, we had already quite designed this product, introduced it, put it forward last year. So we had marketing approaches, even though we didn’t have the contact information, obviously, of other channels that we try and reach people.

So we have that out there and I think it turned out to be exactly the right product for this market right now and that, I think a lot of these folks were planning clearly to take a trip. They — I don’t know whether they were only planning to come for a couple of days or maybe they are planning a potential longer trip as figured [Phonetic], they would lock in a couple of these days upfront at an attractive value for them and obviously be able to get into the reservation system early. So they may add days as the season goes on, I think we’ll learn all that as the season progresses.

But again, I would say, this was, when we talk about the Epic Day Pass, when we launched it, this was really exactly what we were looking for. And I think no doubt that the pandemic for those people who are committed to coming clearly, this is a product that is an opportunity. And I think more broadly, it certainly appears as though for people who are looking to take some kind of trip over the winter and have potential interest, in a winter vacation, I just want this, being outside, being outdoors into an experience that they may be aware of clearly resonated.

Shaun Kelley — Bank of America — Analyst

Second question would just be like — this one is a little bit more theoretical. But, if we fast forward to next year and travel has returned or is kind of by and large normal by next ski season, what are your thoughts around, how you think the retention rate to play out? Because this year, obviously, between both the discount of what you saw in the — the credit, I should say on what you gave coming out of last season, combined with I think the reservation pattern and in a variety of other things. It worked really well on your ability to retain existing people. Do you think this can stay at an elevated level? Have you learned some things about this? Or would you expect it to mean revert closer to historical levels? And sort of, kind of, why are you thinking, what you’re thinking?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I think, it’s still probably a little bit early for us to have it kind of final views on this, because we’re still digesting and analyzing obviously the results that ended just a little over a week ago. But what I would say is that I think no doubt that there were, the credits clearly helped. And I think in particular helped with people who were low-frequency steers during the COVID year. And certainly helped, I think we accelerated and certainly helped retain I think some of our — high-frequency gears for season products because of the minimum 20% credit. And obviously, it certainly helped that people understood that there was a benefit to getting the.

On the other hand, it’s really important to not overlook that we are in the middle of a very uncertain travel environment. And so on balance, I think there’ll be a huge benefit, I think to us in having a more normal environment that we would be selling into, where the focus on all restrictions, understanding the experience, understanding things like Epic Coverage, which typically are nowhere near as important as it was this year. I think all of that would allow us to honestly flex a little bit more in other areas. So how that balance is out next year? You know, I think it’s certainly a little bit hard to say right now.

But I mean to me, the most important thing is that in the middle of COVID-19 when I think a lot was at risk, we were able to retain right these core customers and actually introduce new people into the program and as you know, having their data, having them as a pass holder once obviously dramatically improves our ability to market to them and to retain them for the future. So I think, and a lot — and by the way the prospects that we brought in, these people who are not in our guest database before, there was no credit for them, obviously, there was no discount offered to them. They were getting the same product as everybody else. So, think on balance we walk away from this feeling very good. Exactly, how the math will work out. I think we’ve seen and we’ll have probably more to say about that when we go into next year. But, I think we leave this selling season quite positive about where the program is going.

Shaun Kelley — Bank of America — Analyst

Thanks for that. Last thing I would have, would just be, could you talk a little bit about, there were some headlines out regarding Lake Tahoe this morning, possible kind of stay-at-home orders in California and how that could impact sort of the broader operating activities? But I imagine this is something we’re going to have to struggle with possibly around the portfolio given some dense urban town, you talked about Vermont a little bit, which is — I think it’s a very confusing policy. So can you just talk a little bit about kind of what you know right now on some of the like regional or local operational challenges. And kind of how you’re exactly contending with this or dealing with it at the resort level just for the season, kind of, as it comes based on what you know right now?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Sure. I would say, number 1. Yeah, I do think that we will be having to navigate these ever-changing restrictions and new regulations throughout the portfolio at every resort, with every community, in every locale throughout the season. And I do think that right now, certainly a lot of those changes are ones that are making further restrictions, right, on the kind of activities that people can do and what we can do with the resort. But I think we also said assume that there is probably going to be some positive trends to it at some point during the season. So we may see some loosening as well. And I know all of our community and our Company are focused on partnering right to obviously bring down the case-load everywhere. So in the end, I think we’ll see kind of both sides of this.

And I think from an operational standpoint, it’s one of the reasons why I said what I said at the end of my remarks about our employees. I think this does put tremendous strain and challenge on the Company as a whole and everybody right to try and address this. I think we have — the one advantage that I think we have is, we went in with a lot of preparation on a lot of fronts. The reservation system, we have a number of central team that are constantly monitoring everything that’s going on, that are heavily engaged with all of these local regulators, local public health, all of that. And so we can use that information and we can obviously also take a kind of best practice approach because we understand, we’ve already seen what’s going on in Tahoe, if something like that shows up somewhere else then we know how to address that. We can immediately put that in place.

And that’s a real advantage, I think, by having a number of resorts and having the central approach that we have because it’s central from the standpoint that we can kind of push it up at actually each of these resorts as they go through whatever new restriction get enacted, they become really the leader of that for the rest of the Company. So I feel like we’re well prepared, but there is no doubt that this is going to be operationally a very challenging season ahead.

Shaun Kelley — Bank of America — Analyst

Thank you.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. Thank you.

Operator

Thank you. We will take our next question from Chris Woronka with Deutsche Bank.

Chris Woronka — Deutsche Bank — Analyst

Hey, good afternoon, guys. I wanted to ask — how the mechanics are going to work on the reservation system event? Someone can get a reservation on the day that they want is that — does that trigger a refund process or just how does that work?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

The way the system works, and again I’ll — I’m going to of course caveat anything on this to the terms and conditions, of course, on the program that are on our website. But you know in short, what I’d say is, yeah, we had a time period through December 7 where people — all of our pass holders have the opportunity to go out and get reservations and to the extent that they were not able to get the day that they want, they have the opportunity to then get a refund pass through December 7.

And so to the extent that they did that’s not something that obviously we were going to now review. And we will look at obviously what comes in and make sure that it aligns with all the terms and conditions and then we will of course follow through with the guest on that. Going forward from here forward, you know, if they can’t make a new reservation that they want, that in and of itself does not create a refund of that.

Chris Woronka — Deutsche Bank — Analyst

Okay. Very helpful. And then I realize it’s still very early in the season. But as you kind of comb through your databases and where folks are showing up, or making reservations, is there any hard data yet to validate the thesis that people are staying closer to home and folks from New York are going to Vermont more so than they are maybe going to Vail. Again, I know it’s early and you haven’t really hit the peak holidays yet. But is there anything out there to kind of figure out the magnitude of how close to home people are staying?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I think it’s a little — it’s definitely too early to make any assessment of that. I do think, from some of the reservation data that we’re looking at, I don’t — I think that our destination guests are absolutely looking to potentially travel to the west, and there is no doubt that the biggest numbers of reservations, of course, if they get to western resort and especially where Whistler is not an option, really for many people within the US, I think that of course will put more interest I think in our Colorado and Utah resorts.

So at the moment, I think we’ll see how this plays out, but right now, given the strong momentum that we saw again broadly across our destination markets many of our destination markets, most of our destination markets don’t have an option for them to ski close to home. So obviously these are folks who are willing to either get on a plane or drive a longer distance out to our resort.

Chris Woronka — Deutsche Bank — Analyst

Okay. Very helpful. Thanks, guys.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thank you.

Operator

Thank you. We’ll take our next question from Laurent Vasilescu with Exane BNP Paribas.

Laurent Vasilescu — Exane BNP Paribas — Analyst

Good afternoon. Thanks for taking my questions. On the last call, an illustrative example was given, and if resort revenues declined 30% for fiscal year 2021, we can expect resort EBITDA to be about $400 million. I’m just curious, any updated thoughts on that framework as we progress through the fiscal year.

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

No. At this time no updates to it. As I mentioned in our earlier remarks and in the release, I think we’ve stayed very, very focused on our cost discipline. And I think, managed through that, I think you can see the results of that in our Q1 results and certainly remain committed to managing through that as we go into the season here. And no changes to the illustrative example that we provided in September.

Laurent Vasilescu — Exane BNP Paribas — Analyst

That’s great to hear. And then shifting focus here. Does COVID — I am just curious, does COVID create an opportunity to take share, or even potentially acquire some stand-alone amount that might not be in good shape, that might have the same balance sheet that you have. Any thoughts on that front?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

I think it’s hard to say, I think that will play out over the upcoming 12 to 18 months. I think we have seen in previous events that are sometimes be stabilizing, as after things stabilize that people are something was interested in having strategic discussions again. Again I think usually in the middle of the instability sometimes it’s tougher to have those discussions, but I think as you come out of the other side, I think that’s where there is an opportunity.

And I think for us, we certainly, when we look back historically, we were able to do a lot of things, both internally and externally on the strategic side coming out of the ’09, ’08 recession. And I think we’re very focused on positioning the Company to be able to make the most of whatever opportunities are out there and certainly our capital, liquidity, and access to its capital, it has been a strength maybe as a more differentiated strength right now. And so leveraging that to make sure that we can — we don’t miss anything over the next 12 months, I think is critical.

Laurent Vasilescu — Exane BNP Paribas — Analyst

Very helpful. And then lastly, I know this is a little over a year out, but Beijing will be hosting the Winter Games. And I believe Whistler is a sizable market for the Chinese consumer. How are you positioning yourself to leverage the games to attract more visitations from Asia, whether that’s with your mountains in North America or maybe Australia and maybe some of the partnerships you have in Japan?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I think it’s one of the primary reasons why amongst many that Whistler was such an attractive acquisition opportunity, because we knew that long term, they had such a good connection, the best connection I think in North America with the Asian market that we felt like that was an opportunity for us to really lead the way. And I think at the resort level there are many things that the resort has done on many fronts, whether it’s in our language, or food, or relationship, or travel providers and wholesalers in China to continue to drive that business.

Of course, we’re a little bit heighted [Phonetic] and paused during COVID and some of the travel restrictions, but I think once COVID behind us, that’s something we are absolutely going to re-energize, all of those efforts. And yes, I think an opportunity both through the partnerships and ultimately potentially through acquisition in Japan is critical. I think, yes, there is a real opportunity and we’ve seen that already in Australia. So again, I think the Chinese ski market is one of the — you know maybe the best, right biggest global opportunity in the entire ski industry. And all the moves that we make for the company strategically are oriented around making sure that we can get benefit from that trend.

Laurent Vasilescu — Exane BNP Paribas — Analyst

Very helpful. Thank you very much.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thanks.

Operator

Thank you. We will take our next question from Patrick Scholes with Truist.

Patrick Scholes — Truist — Analyst

Hi. Good afternoon, everyone. Question for you, I see that Eagle County is in the Orange designation for COVID in Colorado and Summit County is in the Red designation. Has the governor told you what would happen if those move to the highest level purple, would that impact the ability to run your lips? Thank you.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I mean, no. We — obviously, we are in communication at both the local county and state level on a ongoing basis very — quite a high-frequency dialog. But other than what is out there in the regulations that are posted. No, we don’t have additional information. And it isn’t just — it’s obviously decisions that would be made at both the state level and at the county level, so both of those would ultimately be critical players in terms of whatever decisions are made are clearly, will beyond that. What I can say is, I think obviously both Summit County, Colorado and Eagle County are working very intensely to bring down the caseload and to get to a decreasing slope.

And I know that Eagle County is very focused as we are on keeping them in Orange for right now, whether that’s possible we’ll see. And I know Summit County is working obviously to hopefully move from — back from Red to Orange. So again, a lot of work going on every level but exactly what the outcome will be of what the regulations would be if they move to the purple at this point, we are not 100% clear.

Patrick Scholes — Truist — Analyst

Okay. Thank you for the color on that. That’s it.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah.

Operator

Thank you. We will take our next question from David Katz of Jefferies.

David Katz — Jefferies — Analyst

Hi. Afternoon, everyone. Congrats on the results.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thanks.

David Katz — Jefferies — Analyst

I’ve had a number of discussions of late around certain areas where there is an unusually high, right, and not at all surprising, number of people either buying or renting homes in areas like near your largest mountains. And presumably over the long term that population growth right if it remains permanent is helpful. But I’d love to hear just a bit more thought about what happens in the near term? And then longer-term what you may be seeing along those same lines about people moving there and any evident impact on what you’ve published in results so far.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

I think, this certainly, we would agree. I think we’re seeing very strong demand right for resort properties and a lot of transactions In many ways the, probably the strongest demand we’ve seen since 2008 or 2007. And I think people are looking for opportunities to be currently outside of many of the big cities because of COVID. How that shifts us, hopefully, we put COVID behind us in and out. I’m not sure, but I would say this, I think the work from home trend, right, using video technology and other technologies, so that people can work remotely.

It would seem like that trend is clearly going to continue in some level. I think that’s probably going to be true on some level for schooling, particularly you know the higher education. And so to the extent that people are able to put themselves in vacation spots, on a more balanced way throughout the year and not just clustered into the peak times, I mean that would be a huge benefit to I think the resort industry and obviously to our Company.

We still obviously do struggle to move people out of peak times and into off-peak times, and to the extent that they are not as tied down to their job or potential school and can do things remotely then obviously, that would — whether it’s to buy real estate or it’s just that people will travel in a more even way throughout the season, I think that could even represent a major opportunity coming out of the COVID dynamic to the entire vacation industry but particularly for our Company.

David Katz — Jefferies — Analyst

Thank you. And with respect to the very near term, and apologies for the short-term question, which may bear some unknowns. Should we find ourselves 30, 60 days, down the road, and there are circumstances where the mountain is open but for whatever reason, a person can’t fulfill right? They may have missed a reservation opportunity, but they — or made one and they can’t fulfill, right, or can’t get to the mountain. I assume that there is some latitude within the program as it’s laid out. And what I am essentially getting at is the prospect that whether we would have any credits rolling into next season as well potentially.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I think at this point our view is that we tried our very best to make our a coverage comprehensive and to address many of the most likely scenarios throughout the season. And, yeah, we’re hopeful that, yeah, that will be — provide a support for our guests. No doubt, like in any year it won’t be a perfect solution. And it won’t necessarily solve everybody’s problem, but right now, obviously, we feel like it’s a strong program that I think will be available to people when they needed.

And I also think that in the end, you know we’re going to have, obviously, it’s a long season, we’re just at the very beginning. And I think a lot of our pass products, all of our pass are basically available throughout the season. And so that really gives people multiple opportunities to potentially take a trip. So I think that also helps and that — we’re not just talking about one situation. So at this point, I think that we feel good about where we are on that front.

David Katz — Jefferies — Analyst

Got it. Thank you very much. Congrats.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. Thank you.

Operator

Thank you. We will take our next question from Paul Golding with Macquarie Capital.

Paul Golding — Macquarie Capital — Analyst

Great. Thanks so much for taking my question. So I was wondering if there was anything from the database that you could share around, how many or what proportion of single-day lift tickets — lift ticket customers traded up into Epic. Just trying to understand to what extent, maybe if you have any color on this, the dynamic around that you were talking about earlier maybe fear of not being able to get that priority without the pass contributed to tailwind for you and tiering people up into the pass network.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. I think at this point, again, a little too early, our process to have all those insights perfectly dialed. And so I don’t think, I wouldn’t comment on exactly the specific on it. But I guess, I would say, you know, just seeing the dynamic with people who were not on the database, right, at all. And seeing the strength we have there are, I’m sure that the urgency in terms of getting a priority our ticket was important to them. Now that said, I’d also say that a lot of these folks came in towards the end, not every one of them has made their reservation.

And so I also have no doubt that part of this was the value proposition, a big part. And so it’s important to remember that last year, obviously, when we didn’t have that [Phonetic] Epic Day Pass is a very strong performer for us because of the value that it offered. And so I think we’re seeing that again now. No doubt, it helped somewhat. And I’ve no doubt that these are folks who in the absence of buying a pass would have been obviously are most likely lift ticket customers.

But yeah, I don’t have anything — any additional information at this point to share on kind of the exact conversions for each guest type because there are actually quite a lot of them in and quite a lot of dynamics both by product type — for this year product type, for last year for geography in all those different points. So that’s one of the things we will obviously spend quite a bit of time on before we go into next year.

Paul Golding — Macquarie Capital — Analyst

Got it. And then just a follow on to that around the database. As you were going into the end of the selling season, is there any info you can give on volumes or integration progress of any peak database uniques that you were able to carry over and successfully and that you’ve been able to re-target? Or anything around essentially what the like-for-like there is, as far as you being able to integrate more uniques into your own process.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

I can’t really share specifics on that. But what I would say, I think we feel very good about this first year right with having peak pulling in the program and feel good about our results in the Northeast, I think especially given some of the restrictions that are in Vermont. And we feel like we had a good first year with peak, a good first year the B2B. I think what we’ve seen with other acquisitions is that often we see an acceleration in the second and third year because the data that we’re getting a lot of the history side of — across that fully integrated, and when we generated ourselves and have kind of ourselves and all that. So I think that’s an opportunity for us as we go forward but feel good about that first year, we’ll see.

Paul Golding — Macquarie Capital — Analyst

Great, thanks so much.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thanks.

Operator

Thank you. We will take our next question from Alex Maroccia with Berenberg.

Alex Maroccia — Berenberg — Analyst

Good afternoon. Thanks for taking my question. Just one — last, still waiting to [Technical Issues]

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

Alex, we’re actually having a bit of a hard time hearing you. You’re breaking up a little bit.

Alex Maroccia — Berenberg — Analyst

Is it any better now?

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

It is. Thank you.

Alex Maroccia — Berenberg — Analyst

Yeah. No problem. Last quarter you were still waiting on 75,000 or so online forms to process, so you can get a sense of how many people were going to downgrade their passes and deal with some other random issues. Can you guys give us a sense of how many ended up downgrading and just in general what you’re seeing across the portfolio?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. What I would say is, I think on the forms piece we were able to convert, you know, quite a few of those folks into a pass product, but not everyone. I think there were a number of people who were — whatever they were interested in, whatever in form but whether they were requesting wasn’t something that we could ultimately fulfill, went out that something maybe decided not to proceed. But actually, I think in total, the forms were a nice contributor to our numbers, but it wasn’t that total, that we announced in September, which isn’t a huge surprise to us.

I think on the downgrade, no, I don’t think downgrading was a material driver this year, I think the effective pass price or the difference between units and revenue was much more impacted by the fact that we had a lot of new people coming into very well frequency products. And that brought down the kind of average yield, but it wasn’t necessarily that we saw huge downgrade issue.

Alex Maroccia — Berenberg — Analyst

Okay. Understood. Thank you.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thank you.

Operator

Thank you. We will take our next question from Ryan Sundby with William Blair.

Ryan Sundby — William Blair — Analyst

Hey. Thanks for taking my question. I guess just to talk on Paul’s question, a couple of back there. When you look at the 20% increase in pass units for the year, as you look at that shape of growth for the year, does that pace change at all during the final couple of weeks as we started to see COVID cases raise around the country.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

No. I mean, so we did not see any kind of impact broadly on the program. I think that we definitely saw better strength in outside the Northeast to then inside the Northeast I think at the end. But whether that is something, I mean obviously we still saw very good growth in the Northeast. So whether that was just timing or whether that was because of the restrictions, I don’t know. But we did not see any material decline or change in trajectory after we went into the final deadline, that we — at all and certainly nothing that would attribute to what we’re seeing on COVID. Now that said, I think in terms of old visitation to the resort from either pass holders or paid ticket holders it’s still our belief that we will see a material impact there, while these COVID restrictions are in place. But again, I guess that’s to be seen.

Ryan Sundby — William Blair — Analyst

That’s super helpful. And then Rob, just, were there any key learnings or anything that surprised you in Australia that you can carry over here to the US as you start the season for this year?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

I think a few key learnings were, one, be prepared as best as we can. Obviously, this is such a unique environment that it’s really tough to be prepared on everything and to try and forecast everything that could happen. But I think, it felt like, one learning was, yeah the better we could get on system, the better we could get to operate through whatever environment was thrown at us is I think critical. I think we also saw in Australia that you know, that there was still demand, even in the middle of the pandemic there, there were still demand to come to the resort. There were still demand for passes, I think that gave us confidence that if we gave people the right time, if we again leaned on our credit approach at the coverage, something that we introduced in Australia too, that ultimately those things would really help the business.

And then I think insight, we took a lot of insights from all kinds of things from our Australian resorts that I think really helped us plan, so there are a lot of data points that we took from especially from Perisher that we used, whether it was on pass sales, whether it was on peak, who is going to show up, who wasn’t, whether it was on how to do your foodservice, whether it’s how to do ski school. So I think all of that gives us an advantage. And by the same token, we opened Keystone as our first resort and I think all 34 of our resorts in America were immediately getting learnings from Keystone. When Breckenridge opened immediately getting learnings from Breckenridge. So I think, on that ops team [Phonetic] is doing a terrific job of really using this as who should we learn from what. So again, a very positive, I think, for us as we try and navigate the tough environment.

Ryan Sundby — William Blair — Analyst

Great. Sounds like a big advantage here. Thanks for the time.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah, sure.

Operator

Thank you. We will take our next question from Felicia Hendrix with Barclays.

Felicia Hendrix — Barclays — Analyst

Hi, thanks. I didn’t get to wish you guys a Happy Hanukkah. So I wanted to get back in the queue.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Happy Hanukkah to you.

Michael Z. Barkin — Executive Vice President and Chief Financial Officer

You too, Felicia.

Felicia Hendrix — Barclays — Analyst

Thank you. No, I actually do have something to follow up. I look. I know it’s really early in the season so you might not have that much data, but I was just wondering, given all the restrictions, we hear certain anecdotal things. So just wondering if you could talk about your satisfaction scores so far to the extent there are any?

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

With guests. Yeah, I think it’s definitely too early, tough to comment on. I think we — I’d say but anecdotally I think there are a lot of people ones who are thrilled to be outside beyond on that [Phonetic] to be skiing, people who are just looking at this as a great opportunity for them, their family, their friends to be together. I mean again, anecdotally a lot of the people who I know talk to over time. You know, I mean these are obviously people who are more accustomed skiing, but you know everybody still wants to come out or go to whatever resort they can go to.

So I think having — have limited options over a long period of time, I think people feel like this is one that they want and then their families to still pursue. There is definitely chatter about mask wearing, we are doing our very best to have very strict compliance with face covering. But obviously, just like you know everybody does that’s going to probably remain as a challenge over the whole season. But I think we now have the most alignment we’ve ever had with all of our local community partners in terms of, yeah, it’s clear that we have, these are things we have to do.

I think people also understand that we can’t — that there are certain things we can’t deliver and I think they get that. I think one of the things we mentioned in the release and we’re going to talk about a little bit more as — we have a lot of people with questions that are calling on call, center trying to talk to our reservation and things like that. We’ve been overwhelmed and really don’t have the infrastructure to fully support that. I think that’s been a, probably the biggest challenge on the guest service side that we’ve seen and one that we’re obviously going to address and fix and just couldn’t do that in time for this fall. But I would say broadly speaking, we feel really good about where we sit, given again the environment that we’re dealing with.

Felicia Hendrix — Barclays — Analyst

Okay. Great. Thank you.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Yeah. Thanks.

Operator

Thank you. This concludes today’s question-and-answer session. I would like to turn it back to management for closing remarks.

Robert A. Katz — Chairman of the Board of Directors and Chief Executive Officer

Thank you, operator. This concludes our fiscal 2021 first quarter earnings call. Thanks to everyone who joined us today. Please feel free to contact me or Michael directly should you have any further questions. Thank you for your time this afternoon, and goodbye.

Operator

[Operator Closing Remarks]