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Good afternoon, and welcome to the Vail Resorts Fiscal Second Quarter 2024 Earnings Call. Today's conference is being recorded. Currently, all callers have been placed in a listen-only mode, and following management’s prepared remarks, the call will be opened up for your questions. [Operator Instructions] I would now like to turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. Please go ahead, ma'am.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2024 second quarter earnings conference call. Joining me on the call this afternoon is Angela Korch, 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 and 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, March 11, 2024, and we undertake no duty to update them as actual events unfold. Today's remarks also 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. Let's turn now to our fiscal 2024 second quarter results. Given the unfavorable conditions across our North American resorts, we are pleased that our results for the quarter demonstrate the resiliency of our strategic business model and our network of resorts and loyal guests. The results for the second quarter were negatively impacted by challenging conditions at all of our North American resorts through January with approximately 42% lower snowfall across our western North American resorts compared to the same period in the prior year and limited natural snow and variable temperatures at our Eastern U.S. resorts, which comprise our Midwest, Mid-Atlantic, and Northeast resorts. "Despite the impacts of conditions, Resort reported EBITDA for the second quarter increased approximately 8% compared to the prior year, primarily driven by the stability created by our season pass results. Resort EBITDA margin also improved 3.3 points in the second quarter compared to the prior year driven by disciplined cost management. "While visitation declined, our ancillary businesses performed well, in particular our ski and ride school, dining and rental businesses experienced strong growth in spending per visit compared to the prior year. We are pleased with the strong execution across our mountain resorts, as well as the impact of the Company's investments in our employees, technology, and on-mountain experience." Now I would like to turn the call over to Angela to further discuss our financial results, season-to-date metrics and fiscal 2024 outlook.

Thanks, Kirsten, and good afternoon, everyone. As Kirsten mentioned, the results for the second quarter were negatively impacted by unfavorable conditions across our North American resorts. Net income attributable to Vail Resorts was $219.3 million or $5.76 per diluted share for the second quarter of fiscal 2024 compared to net income attributable to Vail Resorts of $208.7 million or $5.16 per diluted share in the prior year. Resort reported EBITDA was $425 million in the second fiscal quarter, which compares to resort reported EBITDA of $394.8 million in the same period in the prior year. Turning to our season-to-date metrics. The reported ski season metrics are for the period from the beginning of the ski season through Sunday, March 3, 2024, compared to the prior year period through March 5, 2023. And for our company's North American destination mountain resorts and regional ski areas, excluding the results of the Australian ski areas and Andermatt-Sedrun in both periods. The data mentioned in this release is interim period data and is subject to fiscal quarter end review and adjustments. Unfavorable conditions negatively impacted season-to-date visitation, which was down 9.7% compared to the fiscal year 2023 season-to-date period. Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up 2.6% compared to the fiscal year 2023 season-to-date period. For our [inflow] business results, season-to-date ski school revenue was up 5.5%, dining revenue was down 0.5% and combined retail and rental revenue for North American resort and ski area locations was down 9.3% compared to the prior year period. Across our North American resorts, unfavorable conditions negatively impacted season-to-date visitation, which was below both prior year levels and our expectations based on the number of guests visiting and their frequency. Following the Martin Luther King Jr. holiday weekend, challenging conditions persisted until early March at Whistler Blackcomb and our Tahoe resorts, and while conditions improved at our Rockies and Eastern resorts, visitation did not improve as quickly as expected. We expect a portion of the lower visitation is related to the challenging conditions in the first half of the season as well as a shift in visitation patterns. Despite the decline in season-to-date visitation relative to the prior year period, we are pleased with lift revenue growth driven by the stability created from our season pass program, the strength in our ancillary spending per skier visit across our ski school, dining, and rental businesses, and the improving trends as the season progresses. Now turning to our outlook for fiscal 2024. Due to the season-to-date underperformance, we are lowering our guidance for fiscal 2024. For the remainder of the season, we are expecting improved performance compared to the season-to-date period, including an expected shift in visitation patterns into March and April. This is based on our significant base of pre-committed guests and their historical behavior patterns, the improvement in conditions across our western North American and Northeast resorts, and our lodging booking trends for the Spring Break period. While we are lowering guidance for the fiscal year, we know that the financial impact of the weather disruptions was greatly mitigated by our advance commitment products, which create stability for our Company, our shareholders, and our communities in exchange for an incredible value to the guest. We now expect net income attributable to Vail Resorts for fiscal 2024 to be between $270 million and $325 million, and resort reported EBITDA for fiscal 2024 to be between $849 million and $885 million. We estimate resort EBITDA margin for fiscal 2024 to be approximately 29.6% using the midpoint of the guidance range. Our guidance includes an estimated $4 million of acquisition-related expenses specific to Crans-Montana, but does not include any estimates for the closing costs, operating results or integration expense associated with the Crans-Montana acquisition, which is expected to close this spring. The updated outlook for fiscal 2024 assumes a continuation of the current economic environment and normal weather conditions for the remainder of the 2023/2024 North American and European ski season and for the 2024 Australian ski season. The guidance assumes an exchange rate of $0.74 between the Canadian dollar and U.S. dollar related to the operations of Whistler Blackcomb in Canada, an exchange rate of $0.65 between the Australian dollar and U.S. dollar related to the operations of Perisher, Falls Creek and Hotham in Australia, and an exchange rate of $1.13 between the Swiss Franc and the U.S. dollar related to the operations of Andermatt-Sedrun in Switzerland. Our balance sheet remains strong, including total cash and revolver availability as of January 31, 2024, of approximately $1.4 billion with $812 million of cash on hand and $630 million of combined revolver availability across our credit agreements. As of January 31, 2024, our net debt was 2.4x trailing 12 months total reported EBITDA. We remain confident in the strong free cash flow generation and stability of the underlying business model. Given these dynamics, we are pleased to announce that our Board of Directors declared a quarterly cash dividend on Vail Resorts common stock of $2.22 per share, representing an 8% increase in our quarterly dividend. The dividend will be payable on April 11, 2024, to shareholders of record as of March 28, 2024. We remain committed to returning capital to shareholders and intend to maintain an opportunistic approach to share repurchases. We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high-return capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. As previously announced on November 30, 2023, the company entered into an agreement to acquire a majority stake in Crans-Montana Mountain Resort in Switzerland. The company's second ski resort in Europe. Crans-Montana is an iconic ski destination in the heart of the Swiss Alps, with a unique heritage, incredible terrain, passionate team, and a community dedicated to the success of the region. This acquisition aligns to the company's growth strategy of expanding its resort network in Europe, creating even more value for our pass holders and guests around the world. Much like Andermatt-Sedrun, the company believes Crans-Montana has a unique opportunity for future growth. The transaction is expected to close the spring, subject to third-party consents. Now I'll turn the call back over to Kirsten.

Thank you, Angela. We remain dedicated to delivering an exceptional guest experience, and we will continue to prioritize reinvesting in the experience at our resorts, including consistently increasing capacity through lift, terrain, and food and beverage expansion projects, along with investments in technology to further elevate the guest and employee experience at our resorts. As previously announced, we expect our capital plan for calendar year 2024 to be approximately $189 million to $194 million, excluding $13 million of incremental capital investments in premium fleet and fulfillment infrastructure to support the official launch of My Epic Gear for the 2024/2025 winter season, $11 million of growth capital investments at Andermatt-Sedrun and $1 million of reimbursable capital. Including My Epic Gear premium fleet and fulfillment infrastructure capital and one-time investments, our total capital plan for calendar year 2024 is expected to be approximately $214 million to $219 million. This excludes any capital expenditures associated with the Crans-Montana acquisition, which remains subject to closing. At Whistler Blackcomb, the company plans to replace the four-person high speed Jersey Cream lift with a new six-person high speed lift. This lift is expected to provide a meaningful increase to uphill capacity and better distribute guests at a central part of the resort. At Hunter Mountain, subject to approvals, we plan to replace the four-person fixed-grip Broadway lift with a new six-person high speed lift and plan to relocate the existing Broadway lift to replace the two-person fixed-grip E lift, providing a meaningful increase in uphill capacity and improved access to terrain that is key to the progressive learning experience for our guests. At Park City, we are in the planning process to support the approved replacement of the Sunrise lift with a new 10-person gondola, in partnership with the Canyons Village Management Association in calendar year 2025, which will provide improved access and enhanced guest experience for existing and future developments within the Canyons Village. At Park City and Hunter Mountain, beyond the planned lift investments, we plan to enhance snowmaking systems to improve the experience for key terrain, increase early season terrain consistency and improve the efficiency through the installation of automated and energy-efficient snowguns. We also plan to further support the company's Commitment to

[Operator Instructions] Our first question comes from Shaun Kelley, Bank of America.

Hi. Good afternoon, everyone. Kirsten, Angela, maybe we could just start with the visitation patterns you saw because there's clearly – it seems like there's two parts in here. You called out those challenging conditions. I think which we all saw and clearly, you documented early in the season and some of that continued. And then the second part where you saw some change in visitation patterns. And I'm wondering if you could just help us maybe divide between those two a little bit, if you could explain them overall, kind of what you saw behaviorally? And if you could help us to sort of help quantify the two buckets so investors could get a sense of certainly the weather impacts as you see them for this year as they start thinking about building up next year? Thank you.

Thank you, Shaun. If you look at Q2, I would say, incredibly challenging conditions, as we noted, 42% lower snowfall than the prior year, which definitely had an impact on visitation. When we look post MLK, some things shifted. We continue to see some challenging conditions at Whistler Blackcomb and Tahoe while conditions improved at the Rockies – in the Rockies and the East. Visits, however, did not improve as we had expected. We did, however, see were President's weekend the trends improve, not all the way to our expectations, but the trends did improve over that President's Day holiday. As we look forward to spring, we're looking at a lot of different information, Shaun. One, conditions are looking pretty good across the Board at our resorts overall. I would say two lodging indicators in our lodging as well as our market lodging. And I would also then say and most importantly, is our data about our guests and our pass holders, we obviously have a significant base of pre-committed guests and have visibility into their behavior, visibility into who has already pre-committed and has a pass, but have not even visited the resorts at all yet. And what we're seeing season-to-date is that there is a higher percentage of those guests that have not yet utilized their pass, which suggests based on historical behavior, a shift in visitation until later into the season, and we would apply that same assumption as it relates to lift ticket guests as well. So when we think forward to spring, it's really a combination of – we think the conditions are in good shape, the lodging indicators for our lodging in the markets that our resorts are in are looking favorable and then the data that we have because so many of our guests are pre-committed, and we can see if they have visited or not and how frequently.

And sorry, just as a follow-up here, but is there any risk that – again, there's some pattern here that's changing that is more permanent. Again, we're looking at a lot of the same visitation data, I think the investor base was as well. And the question we're sort of getting is just why? Is it a question of shifting? Or is there a behavioral change that maybe happening in terms of when they're willing to go, what they're willing to do or possibly even a reaction to sort of the pricing environment? Just maybe you could help us think about what your best guess is on the behavior? Is it really all timing? Or is there some change in just the way people are consuming skiing, be it this season or just kind of what you're seeing because we have had a lot of the season go by so far. So we should have some sense of just how they're acting.

Yes. We have a lot of information about our pass holders and those are guests who have obviously already pre-committed. And based on historical behavior, we're making an assumption that at a normal historical level that they will still visit. Whether or not there's kind of a broader trend going on, I think it is really hard to say given the season is not over yet. I think we'll probably have better visibility into that once we get through spring, it would appear that season-to-date is really significantly impacted by unfavorable conditions, and it would appear based on our historical data on guest behavior that there is a shift, and we certainly see our lodging trends moving in that direction, but a broader kind of underlying impact. I don't think that we can say for certain is there's anything like that going on at this time, and we'll know more once we get through the full season.

Our next question comes from Jeff Stantial with Stifel.

Hey. Great. Good afternoon, everyone. Thanks for taking our questions. Just starting off here on the announced prices for the Epic Pass in the upcoming season, 8% higher year-on-year. That's consistent with last season's pricing action. But if you think about pricing as a spread over CPI that does seem to suggest more pronounced price taking this year relative to last. So curious if you just expand on this decision a bit more? And I guess, more specifically, what sort of data do you look at that gets you comfort around potentially elasticity? Thanks.

Thanks, Jeff. We have, as you know, historically consistently priced above inflation given the investments that we make and the guest experience at our resorts. If you look at each year, the data that we look at is guest behavior. We look at the investments we're making, and we look at inflation. When we're looking at inflation, we're looking at total inflation, but we're also looking at things like services inflation because, obviously, we're in the services business, and we also look at admissions inflation. So we're really looking holistically at inflation and then our own guest behavior and price elasticity that we have based on the results of our – in our pass business. So overall, those are all of the factors that go into our decision this year, the increase, as you noted, is an 8% increase. Last year was also an 8% and the year prior was a 7% increase.

That's great. Thank you for that, Kirsten. And then for my follow-up, I was hoping you might just expand upon some of the resiliency that you called out in some of the ancillary lines, in particular in ski school and dining. I guess how much of this growth in revenue per visit is driven by guest mix or easy comps? Or is this going to be mostly strong underlying demand or a return on some of the initiatives that you've talked about at recent conferences? Thanks.

Yes. I think what we're seeing is that the guests that are coming are still spending money on those ancillary businesses. So you heard that in our comments about ski school, about dining, about the rental business, and we're really pleased to see that behavior. Some of the initiatives that you're alluding to like My Epic Gear maybe as a new initiative would not really given it's only in a pilot will not be having a material impact in this year, but we would expect it to going forward as that business scales. But I think the spending on ancillary is certainly, I think, a positive indicator for the business as is even with the challenging snow conditions and lower visitation that our overall EBITDA was up for the quarter.

Our next question comes from Laurent Vasilescu with BNP Paribas.

Good afternoon. Thank you very much for taking my question. I wanted to ask about weather disruptions. In the prepared remarks, it's mentioned that you're rolling out enhanced snowmaking systems at Park City and Hunter Mountain to improve the guest experience. Kirsten, can you provide a little bit more detail there? How is the technology different from what you have currently? How much CapEx is required to roll this technology out? And should we expect this rollout to expand beyond these two resorts?

Yes. Obviously, we're always looking at ways that we can keep investing in snowmaking and automation and high-efficiency snowmaking is a key area of opportunity for us. When we talk about our growth strategies going forward, we really do view that one of the key growth strategies is resource efficiency and that comes from things like [risk management] and guest self-service, but one of the other ways that, that comes is through automation and things like automated snowmaking help contribute to that. We do have automated snowmaking currently at some of our resorts, and I would anticipate every year as we look at capital, we'll be assessing if there's further opportunities to expand that investment where we can to get the highest efficiency and also to ensure that we can maximize the season and the resorts where it can have an impact.

Very helpful. And then I want to ask about retail and rental revenues. It declined 15% in the quarter. So I think about five points of that by my math was driven by the exit of certain lease locations last year. Are you at the current footprint of 250 retail and rental locations in North America? Is that the right number going forward? Or do you think there's an opportunity to reduce that, especially with My Epic Gear as it gets rolled out across the ecosystem?

So regarding rental and retail overall, rental, just to talk about that business and then forward, rental and retail rental. As we noted, we did achieved growth in our rental yields, which we're very pleased about season-to-date. The retail side, which I think you alluded to, was impacted by the exit of 19 rental and retail locations in Aspen and Telluride, which we deliberately chose to exit those locations to focus our resources on our core Mountain resorts as strategic priorities. So that was an impact as well in Q2. And there are also some headwinds in retail that I think are not dissimilar from what's happening in the outdoor retail industry overall right now. In terms of looking forward in My Epic Gear and what that means for brick-and-mortar versus the business model, I think a lot of that will depend on the evolution and the success of the My Epic Gear business. One of the things that I really like about that business model is it really utilizes the existing infrastructure that we have in terms of distribution centers and warehouses and locations for the gear without the need for the guest to go into a brick-and-mortar location because we're essentially through the app delivering the gear they want, when they want it, I can't say for sure how that's going to play out in terms of the need for brick-and-mortar locations, but I think it will definitely evolve, especially. And we'll probably know more as we get through year one of the launch and how that business performs on a broader level at scale. So more to come on that. A little too early to know.

Our next question comes from Matthew Boss with JPMorgan.

Great. Thanks. I appreciate all the color. So maybe two-part question. Kirsten, can you elaborate on underlying customer spending trends? Or maybe when you think through the weather and visitation shifts that you cited, is there any change in your view to the multiyear topline growth just based on the season or any underlying lead indicators that you're most focused on? And then for Angela, with margins this year expected about 150 basis points below 2019, are there any structural constraints that you see to recapturing this margin shortfall next year? And if you think about the core underlying growth of the business, is mid-single-digit EBITDA dollar growth. I think that's been the historical run rate. Any change to that in your view?

Thanks, Matt. I'll tack the first question that you outlined about underlying spending trends. At this point, I'm not seeing any underlying spending trends that are concerning, obviously, come the season, so when our pass sales ended in early December, we had unit growth on pass sales and a very high flow-through on price in terms of the dollar sales on pass sales, which is certainly a big indicator for us. Q2 was 42% less snowfall and visitation impacted by that seems the spend visit looking healthy and strong on ski school, dining and rental, I think, is also a very strong indicator. I'm not seeing any indicators right now that would reflect the kind of big shift in spend. What I am seeing is indicators of a shift in visitation from the first part of the season, and into spring is what we're assuming. I'm not seeing any other indicators that would reflect that our guests are pulling back on their spending right now. I'll let Angela answer the second question about margin.

Yes, Matt, on margin, we talked about going into this season that we expected our margins to kind of go back to the midpoint of our prior guidance of 31%. And that was obviously impacted though by what happened this year with Q1. Outside of Q1, right, what you saw – what we just talked about in the winter, we saw our margins impacted for the winter season by the conditions and the revenue impact in Q2 and that continued into season-to-date. So for the full-year, the revised forecast is 29.6% at the midpoint. I would say though more broadly to your question really about our ability to expand this over time. We do see our broadly the ability to move this over time, right? We do have a high cost structure, which gives us operating leverage tied to the revenue growth of the company. And so we do see opportunities here for both resource efficiency and for right what we've talked about in terms of ways that we can expand our margins over time. Sorry, your second part of your question was on the growth rate. And we don't give the forward-looking kind of growth algo in terms of revenue or EBITDA growth but we do talk about really what those drivers are, right, for our business model, right? We see the ability to kind of continue to grow in our advanced commitment and continue to take what you've seen us do historically, which is price above inflation that you also see what we did with our price for pass launch this coming year.

So one other comment, Matt, just to circle back on your question is on guest spend. It is also that we are very fortunate that we have an enormous amount of loyalty among our guest base and our pass holder base, and it is really incumbent on us to keep reinvesting into the guest experience in dining My Epic Gear innovation like the app that keep – retain that loyalty and also retain that spend that you asked about.

That's great color. Best of luck.

Our next question comes from David Katz, Jefferies.

Good afternoon, everyone. Thanks for taking my questions. I'm curious on two things. When we look at the European mountains that we have, thinking about those in the context of what the company has done historically in terms of really adding a ton of value to them over time. In general terms, are these mountains that we think can sort of add that kind of value? Or are they just sort of a different market? And I just had one quick follow-up on the guide, which is are we – is the change entirely because of weather, mostly because of weather or part weather in part visitation? I'm just trying to sort of unpack that a little bit? Thank you.

Hi, David. With regards to the European resorts, we absolutely believe that the strategy to expand into Europe can drive value creation. And we believe that Andermatt-Sedrun has unique growth potential because of the nature of the resort and the investments that have been made there and that we will make there. And I'd say similar for Crans-Montana, which is a very well-known brand, and we believe with investment has a unique growth potential. Each of them individually have potential but the real opportunity longer term is where we can take it from here. Similar to the approach we had in North America, is there an opportunity to build a network that can create further stability for the resorts in Europe and even unlock greater potential there. That is what we are really focused on.

And David, I'll hit on the second part of your question. And in terms of the impact, right, the conditions obviously were a big factor that we called out in the quarter when we have snowfall down 42% across our North American Western resorts. That's obviously a big change and impacts our visitation. And so what we noted though, there is also right things in – when it improves in Rockies in the East, we did see improved results, although it was slower, right, it didn't respond as quickly as we expected, which was also a contributing factor to the reduced guidance for the full-year. And we also noted just we're seeing some of the shift in behavior pattern into kind of the March and April period based on the items Kirsten outlined kind of earlier, our pass holder data that we have in terms of their behavior, our lodging indicators and obviously, conditions improving.

Got it. Thank you very much.

Thanks David. I think important that it is very – the expectations we have for spring are very tied to the information we have about our guest behavior and our base of pre-committed debt.

Our next question comes from Patrick Scholes with Truist.

Hi. Good afternoon. A couple of questions here. First one, you somewhat alluded to, but how would you say your destination scale, the one that comes over Christmas and New Year's performed or the destination visitor performed versus, say, your drive to? Was that a bit more as expected? Or was that a disappointment as well? Thank you.

Thanks, Patrick. All of our visitation was impacted season-to-date by having the snow conditions. I think for the guests that did come, we did see, as we noted, the strong spend per guest. So that would reflect if we have guests that are spending on ski school and dining and rental that tend to orient more to destination visits which is a great sign. But I'd say overall, visitation was impacted across the board by having snowfall down so substantially across the network.

Okay. So fair to say that the rough expectations were for both of those were, I guess, equally disappointing? Or was one any less bad than or less worse than you expected?

I would say both segments were impacted due to the snow conditions and the in terms of the year-over-year and versus our expectations, both were impacted. Having a base of so many guests that are pre-committed into a pass, certainly, helped us enable us to deliver the strong EBITDA up. But across the board, we saw impacts. We're not really quantifying one or the other right now. And I think will have a much better understanding of the total impact on destination versus local at the end of the season, given this upcoming time period is…

Okay. Then my next question – okay. My next question is on this recent A-Basin sale. Was that something you looked at? Or were you concerned about antitrust issues with that? Thank you.

Thanks. Yes, we obviously had a very long-term relationship with A-Basin over 20 years of a partnership and saw that Alterra made the announcement of an acquisition there. Way back in the 1990s when we acquired Keystone and Breckenridge, we actually divested Arapahoe Basin and then transitioned into a partnership, which we had very successfully for over 20 years. And it makes a lot of sense to us that Alterra appears to be pursuing a strategy that might be more similar to our strategy of an owned and operated model. And we have a lot of respect for Arapahoe Basin and hope it is very successful for them.

Our next question comes from Megan Alexander, Morgan Stanley.

Hi. This is Louise Doss on for Megan. Thanks for taking our question. We wanted to start by asking a follow-up to some of the earlier questions on visitation. It's encouraging that you've already seen an improvement quarter-to-date based on your commentary, but it also seems like you are expecting further improvement here in March and then April. So we were hoping that you could maybe quantify some of what is embedded as it relates to visitation and the updated guide for 3Q? And are you expecting kind of similar improvement that you saw in February or perhaps more given the spring break and early Easter dynamics?

Hi. Thanks for the question. Yes, we've said about our rest of year guidance, right, as we've been looking at kind of as the trends have progressed through the season-to-date period and then we're looking at our guest behavior to say why do we think that implies. And we have a significant base of pre-committed guests that we understand their behavior. And so we are assuming that we'll have a shift in visitation patterns in the March and April from both that and also just right what we mentioned before in terms of conditions and lodging bookings and that is in the visitation rest of your assumptions. Obviously, that translates into revenue guidance for the rest of the year as well.

Another way to think about it is the expectation that those – that our guests in spring, given the conditions are in a much better place would return to more typical historical behavior.

Okay. Great. Thank you so much. And I understand that you aren't going to guide for 2025 at this point. But one of the questions we are getting is how to think about how much of the reduction in the guide is related to abnormal weather and thus perhaps that you could get back next year? Would it be possible to maybe just quantify how much of the 2Q underperformance was related to weather?

I think on a full-year fiscal year basis, we'll be able to provide more context when we get through the season if we're heading into next fiscal year because so much of this is seeing what the behavior changes are as we go through. And there's still a substantial part of the season left for us. So you can expect that we'll provide more details and commentary on that later in our fiscal year.

Our next question comes from Chris Woronka, Deutsche Bank.

Hey. Good afternoon everyone. Thanks for taking our questions. I wanted to ask a little bit about the ancillary, right? And maybe we could drill down and just kind of get a sense for some of the growth items that held up a lot better than your skier visits. Can you maybe give us a sense for what's pricing versus what's transactional? Any kind of way to slice and dice the way people are using ancillary versus how much of it is coming from price? Thanks.

Yes. I'll let Angela weigh in with her perspective and additional thoughts on this as well. But I think the easiest way to think about it is a combination very – based on the line of business on capture, what the capture of our guests was to spend per guest or per visit and also the pricing increase that was taken on each line of business. And it varies by business, but generally a combination of those factors. Angela, did you have any other comments that you wanted to make on it?

Yes. Just building on that, of course, we look – we do look and see across all of our lines of business that we generally take price above inflation there. So there is a pricing component that you'll see, and we do that dynamically depending on where we're seeing also peak demand periods or by line of business. And this year, in particular, we talked about some of our specific initiatives around F&B, in particular, returning getting captured back and really how to awareness campaigns and other initiatives to drive F&B. And then you saw on ski school, right, up 5.5% on revenue growth, which was obviously much higher than the visitation trend, which shows that we continue to have success driving both volume and capture across that line business as well.

Okay. I appreciate that. And then the second – the follow-up question is really related to lodging. And I know you called out having fewer units to rent through the rental program. Can you tell us – is that more of a structural issue? Is that something that going forward? Or is that just going to vary year to year in terms of how many you have available?

Yes. That does vary from year to year. It can depend on a lot of things, both in terms of which properties we have in our property management pools. Also can depend on owners' desire to take units on and off the market, depending kind of on their own needs. So that will just vary based on trends each year that we're seeing.

Our next question comes from Brandt Montour from Barclays.

Good evening everybody. Thanks for taking my question. So during COVID, you guys cut the price of the pass meaningfully, right? And units grew 50% and now it seems like you're seeing some folks not use the pass to some certain extent. And I guess the question is, are you concerned at all over elevated churn from either pricing elasticity with the price hike or from people going back to work and not having as many days to travel post this revenge travel sort of normalization phase that we're all going through. What are your thoughts on that?

That's correct, Brandt. We took a 20% price reset in FY2022 based on price elasticity data and the goal to move a much greater percentage of our visits committed in advance for this exact reason that trying to create stability because of the weather variability that impacts the ski industry, and we were quite successful in doing that. Then took another, then took 7% in group passes again, 8% and group passes again last year. Pass utilization, whether that's frequency or the timing of when a guest uses their pass, varies every year. We have a lot of data and information on it, and we have a lot of data on how that's predicted to their renewal rate. And even with the weather variability that we've had, as you might recall from December when we finished our pass sales, our renewal was a huge driver of the growth, which is the loyalty to our pass program. So as we think about this year, this year and their utilization is greatly impacted by I don't think I can emphasize enough, snowfall being down 42% is a significant impact on the ski industry. And so the really the belief is that our pass holders, based on their historical behavior should return to a normal typical utilization. And then the price increase that we're taking for next year is based on the data that we have about our price elasticities and what we believe is the right approach to our pricing going forward. And just as a reminder, when we took the price reset, we did say and we have consistently executed on that we believed that there were still – were still price increases we could take from the reset, and we've consistently delivered on that.

Okay. That's super helpful. And then a follow-up, sort of a different question or same question, different flavor. You guys have a lot of data, right? And then you have past data for 12 or 14 years. And so can you look back at times when you had two years in a row of poor weather or even one year. I mean, last year, we had you had poor weather and you had great pass sales the next year. And I'm curious if there's any correlation either positive or negative, of how pass sales go for a year following a year with bad weather. Are you most more likely to see elevated churn? Or are you more likely to see pent-up demand?

Yes. You're absolutely right, Brandt. We have a lot of pass data and really years and years and years of data even understanding when someone doesn't use their pass a single day what their renewal rate looks like. And so we can get highly predictive and pretty accurate in terms of pass renewal going into the following season because we have so much data on that. And we, of course, being in the ski business have had many years where we've had weather challenges and disruptions so that we can see that. That is that data will be factored into the forecast that we have for our pass sales going into FY2025 and the data about what we expect in spring of this year and utilization by our pass holders based on their historical behavior is factored into the guidance that we just published as well.

This concludes the Q&A portion of today's call. I would now like to turn the call back over to Kirsten Lynch for closing remarks.

Thank you, operator. This concludes our fiscal 2024 second quarter earnings call. Thanks to everyone who joined us today. Please feel free to contact me or Angela directly, should you have any further questions. Thank you for your time this afternoon. Goodbye.