Vail Resorts’ Revenue Plummets 47%, Pass Sales Drop 12% In Latest Earnings Report - POWDER Magazine

Vail Resorts reported a 47% revenue drop and 12% decline in pass sales, illustrating how horizontal analysis reveals year-over-year percentage changes in income statement line items. This earnings miss shows why tracking the direction and magnitude of revenue shifts matters to stakeholders.

Read article

Teaching notes are auto-generated. Worth a fact-check before class.

Why this matters

Vail Resorts operates ski resorts and sells lift passes — tickets that let skiers and snowboarders use the slopes. Revenue comes from pass sales (season passes and day passes), food and lodging, and other services. In the latest earnings report, management disclosed that total revenue fell 47% compared to the same period in the prior year, while pass sales specifically dropped 12%. This sharp decline prompts questions about what changed, which segments are struggling, and whether this is a temporary dip or a sign of structural problems. Horizontal analysis — comparing the same line item from one period to another and calculating the percentage change — is the tool that surfaces these year-over-year swings.

Key points

Vail's 47% revenue drop is a horizontal analysis finding: comparing this period's total revenue to last year's and calculating the percentage change.
Pass sales fell only 12%, while total revenue fell 47%, → horizontal analysis shows different segments move at different rates.
A 47% revenue plunge in one quarter tells you direction and magnitude of change; alone, it doesn't explain WHY or whether the trend will continue.
Comparing the 12% pass decline to the 47% total revenue drop reveals that non-pass revenue fell much more steeply, a key insight for understanding business health.

Key terms

horizontal analysis: Comparing a financial statement line item (like revenue) from one period to the same line item in a prior period, calculating the dollar change and percentage change to spot trends.
vertical analysis: Expressing each line item on a financial statement as a percentage of a base amount (like total revenue or total assets) to show the composition of that statement in a single period.
lift pass / season pass: A ticket or subscription sold by a ski resort that grants the holder the right to use the slopes and ski lifts; can be sold for a single day or for an entire season.
year-over-year (YoY): Comparing the same metric or period from one calendar year to the corresponding period in the prior year (e.g., Q3 2024 vs. Q3 2023).
earnings report: A quarterly or annual financial statement and management summary that a public company releases to shareholders and regulators, detailing revenue, expenses, and net income for the period.
revenue stream: A distinct source or category of income; for example, Vail Resorts has pass sales as one revenue stream and food/lodging as another.

Discussion prompts

01
Vail's total revenue fell 47% while pass sales fell only 12%. Which analysis method — horizontal or vertical — best isolates this gap in decline rates?
Answer: Horizontal analysis is the right tool. It compares the same revenue line items year-over-year and calculates percentage changes, revealing that pass sales underperformed total revenue. A vertical analysis would show each revenue stream as a percentage of total revenue within a single period and wouldn't highlight the differential rate of decline.
02
If Vail's prior-year total revenue was $100 million and this year it was $53 million, and pass sales went from $40 million to $35.2 million, how do the 47% and 12% declines reflect those dollar amounts?
Answer: Students should calculate: total revenue change = (53 – 100) / 100 = –47%. Pass sales change = (35.2 – 40) / 40 = –12%. The algebra confirms the headline figures and shows that non-pass revenue (food, lodging, etc.) fell from $60M to $17.8M, a 70% drop, explaining why total revenue fell much faster than passes alone.
03
Horizontal analysis shows Vail's 47% revenue drop, but it doesn't explain whether this was due to fewer skiers, lower prices, or fewer resorts open. What additional information would you need to understand the cause?
Answer: The key point is that horizontal analysis measures change but not cause. To understand the 47% drop, you'd need context: industry data (did all resorts struggle?), operational data (were resorts closed due to weather or COVID?), and pricing data (did Vail raise prices, lowering demand?). Horizontal analysis is the starting point for asking better questions.

Bringing it to class

Start by drawing a simple two-column table on the board: 'Prior Year Revenue' and 'Current Year Revenue.' Plug in a round number (e.g., $100M and $53M). Walk through the horizontal analysis formula: (New – Old) / Old × 100 = (53 – 100) / 100 = –47%. Then highlight that pass sales only dropped 12%, using the same formula with different starting numbers. Ask students: 'If passes fell 12% but total revenue fell 47%, what does that tell you about the other revenue?' Let them sit with that tension. Define 'revenue stream' as the bucket system: Vail sells passes (one bucket), food (another bucket), lodging (another). The takeaway: horizontal analysis is the detective tool that says 'something weird happened with food and lodging'—it doesn't solve the mystery, but it flags it.