Vail Resorts, the global corporation that owns Stowe Mountain Resort, has made deep cuts in its U.S. workforce, as the ski industry continues to be hammered by the coronavirus pandemic.
According to CEO Rob Katz, nearly all year-round hourly employees have been furloughed for at least the next month or two, and all salaried employees’ will take a pay cut for the next half-year. That includes Katz himself, who is giving up his entire salary for six months.
“I recognize this is very disappointing news to be receiving and I had hoped we would not have to take this action. But with each passing week, the financial consequences have become more apparent,” Katz said in a letter April 1. “We continue to find ourselves living through an unprecedented time as the situation with COVID-19 grows more challenging, with everyone across our planet now dealing with very real and significant health risks and impacts. This crisis has hit the travel industry particularly hard.”
The cuts came just two weeks after ski resorts around the country prematurely ended their seasons out of concern for the coronavirus pandemic, and mere days after many of them outlawed uphill travel for skiers who wanted to still earn their turns sans lift service.
This coming weekend would have been Stowe’s annual Easter sunrise service, now canceled.
Katz said the early closure of Vail’s North American operations will cost the company at least $180 million to $200 million in the third quarter, which just ended.
Katz said furloughed hourly employees will still receive full health care coverage and the company will pay all premiums.
Cuts for salaried employees will be done by tier, with 5 percent reductions for those up to a certain point, and higher reductions for higher-ranking managers, up to a 25 percent reduction “for our most senior executives.”
Vail is also eliminating all cash compensation for members of its board of directors for six months, suspending its 401(k) match, and eliminating its June and September dividends to shareholders, which will save more than $140 million.
The company is reducing its capital spending by $80 million to $85 million across the board, “with the intention to defer all new chairlifts, terrain expansions and other mountain improvements, while protecting the vast majority of our maintenance capital spending,” Katz said.
At the local level, Jeff Wise, the senior communications manager for Vail’s Northeast operations — Stowe, Okemo and Mount Sunapee — had little to add, saying there are no Stowe-specific details about the capital spending freeze.
Kath said he remains “very hopeful that both the economy and travel will return to normal” by next ski season, but pointed out that Vail’s Australian winter season and North American summer mountain operations are scheduled to ramp up in the next couple of months. Those operations account for 20 percent of Vail’s total revenue.
“I am sure many of you are wondering if these actions will be enough,” Katz wrote. “Will there be more changes coming? Once again, if I am honest with myself, I have to give the toughest answer for any CEO — I really don’t know.”