Vail Resorts: An experiential empire for 50 cents on the dollar

Last week, I debuted The Ground Up on YouTube, a brand-new series dedicated exclusively to real estate opportunities.

One of the four companies I covered there was Vail Resorts (MTN)… which might seem like an odd choice for anyone who knows it. After all, Vail makes money by selling lift tickets and season passes, not square footage to rent.

However, The Ground Up isn’t just interested in real estate investment trusts (REITs). I’ll cover those as well, but it’s about a much wider understanding of real assets that includes:

And other avenues that help investors build wealth while adhering to our Wide Moat standards of principal preservation. So Vail Resorts, a C-corp, qualifies easily with its enormous real estate portfolio of about 90 holdings.

While a good chunk of the actual land it utilizes is owned by the federal government, it still operates real estate assets on those properties, from entire mountain resorts to hotels, employee housing, and shops. Besides, it’s in the middle of a transformation that’s emphasizing those assets much more than before.

Vail’s prior playbook is struggling, you see. Its billion-dollar seasonal “Epic Pass” program – which represented 65% of its total lift revenue and 75% of total visitation in fiscal-year 2025 – is slowing down.

The company’s spring 2025 Pass sales, for starters, fell about 1% year over year. And then the 2025-26 season itself involved exceptionally warm temperatures and little snowfall.

As a result, Vail’s North American ski visits plunged 12.5%, with 14.8 million total visits… down from 16.9 million the previous winter. Also as a result, it sold about 10% fewer Epic passes, forcing Vail to raise prices to cover its losses.

It only makes sense then that shares tumbled, too. But if this experiential real estate operator can pull off the turnaround I think it can? That just means it’s trading at a bargain.

For now.

Here’s my main reason for optimism: Rob Katz.

This is the man who ran Vail Resorts from 2006 to 2021. So he was responsible for the Epic Pass program, which launched in 2008 and grew into the powerhouse profit-maker it was for so long.

But the company began to falter after that. When Katz returned in May 2025, it was only to find that Vail’s North American skier visits had fallen 3% year over year in 2024-25. And by mid-September, Epic Pass sales for 2025-26 were also down 3%.

Then “the winter that wasn’t” happened on top of it all.

Fortunately for investors, Katz appears as innovative as ever, candidly acknowledging that the company has some changes to make.

On the one hand, he recognizes that Vail became the world’s largest ski resort operator by acquiring new properties and promoting its Pass program. Between 2013 and 2019 alone, it bought 28 ski resorts, quintupling its portfolio.

Naturally, it used each one to fuel the Epic Pass system even further, all of which investors loved. At its peak, shares were selling for just under $370 in 2021.

But today, they’re trading just over $150 under the realization that Vail’s former growth tactics aren’t cutting it anymore. That’s why, earlier this month, Katz unveiled a multi-year initiative.

Called Epic Experience, it’s built around loyalty programs and repeat visits rather than constantly seeking out hordes of new customers. This new strategy involves five “pillars”:

Vail’s pricing strategy will largely remain the same through all of this. And it’s not expanding its properties or adding new ski lifts along the way like it would have before.

Instead, the plan is largely focused on working with what it already has to make those assets more worthwhile than ever.

There’s an obvious logic to focusing on improving the customer experience. Happy visitors are more likely to come back, renting more gear, upgrading lessons, and consuming more food.

They also generate more usable market data along the way. And that’s a big deal in the ski industry, which sees substantial annual turnover. This can be for a variety of reasons, but resort hopping is definitely one.

So Vail’s new initiative can kill two birds with one stone. It can cut down on straying members while simultaneously creating buzz from continuing customers who tell others about their great experiences.

Behind the scenes, it will also use its new and improved incoming data to run more effective omnichannel advertising – something Vail hasn’t excelled at in the past. It’s heavily relied on email marketing, which Katz now says isn’t working.

Something needs to change, and this is the something.

It’s also worth noting how little paid media spend Vail has run compared to its competitors before this point. So management has re-evaluated every option available – including online ads, social media, and its mobile app – and where its money will be best employed.

At this time, however, before investors see the results of all that effort… Vail’s free cash flow multiple sits at 14.3x instead of its normal 24x. This is also despite analysts expecting free cash flow to grow 24% next year and 13% in 2028.

That would put its dividend payout ratio in a safer place, to be sure. While it’s dropped from 103% last year to 87% today – a marked improvement – we’d like to see more progress made there.

Though we admit we’re more than happy to take advantage of its hefty 6.1% yield in the meantime.

If Katz succeeds in executing his five-point plan, Vail could deliver an annualized return of roughly 35% – even without any expansion in its valuation multiple. And if the market rewards that progress by moving the stock closer to its historical valuation, annualized returns could climb above 50%.

That would be what I call buying 42 resorts for 50 cents on the dollar… complete with a 6.1% lift ticket paying you to wait.

Happy SWAN investing!

Brad Thomas
Editor, The Wide Moat Daily

The Wide Moat Show’s July 16th episode focused on “7 strong buys” – complete with two stocks trading at especially attractive price points. And we were pretty pleased with those finds.

If you were too, you’re going to love the “7 more bargain stocks” we’ve found in this latest video. We’re talking massive discounts that we’ve discovered!

Click here to watch Nick Ward and me discuss what these companies are… why they’re trading so cheaply…

And what kind of returns we think they can make for intrepid investors in the months ahead.