In 1970, Hunter S. Thompson ran for sheriff of Pitkin County, Colorado on a platform that included renaming Aspen to “Fat City” to discourage developers. His target: the “greedheads, land-rapers and other human jackals” capitalizing on the town’s name. His argument was simple. Aspen was being sold, piece by piece, to people who saw mountains as money.
“I saw politics as an art of self-defense,” Thompson wrote. “They were after me and they were going to take the meadow in front of my house and change it unless I fought with them. Like everyone else who’s survived, I know that if you turn your back on the bastards, they’ll cut you down. The greedheads work eight days a week.”
He lost by fewer than 100 votes (and there is an incredible Rolling Stone article worth reading on the saga). The Republicans and Democrats literally formed a coalition to stop him. The developers won.
Thirty-two years later, journalist Hal Clifford published Downhill Slide: Why the Corporate Ski Industry is Bad for Skiing, Ski Towns, and the Environment, documenting how publicly traded corporations had gained control of American skiing in the 1990s and were “extracting value from the mountains, just the way a gold company or a timber company was a hundred years ago.” His conclusion: “They have done all this in the search for greater wealth and profits, yet their shareholders have fared poorly at best, and at worst have lost their shirts.”
Twenty-four years after that, Vail Resorts is, in some way, a reflection of Hal’s prediction. The stock is down 65% from its 2021 high of $376 and back to levels seen in 2016. Revenue has grown 44% since fiscal 2018 while net income has declined 56%. The company spent $1.5 billion buying back its own stock at an average price roughly 45% above where it trades today. An activist shareholder sent an 88-page presentation calling for the CEO, CFO, and board chair to be fired. The CEO was fired. The old CEO was brought back.
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Thompson’s greedheads wore cowboy boots and carried blueprints for condos. Today’s greedheads wear Patagonia vests (which I may or may not own), buy back shares instead of reinvesting in the product, and build the same soulless base area from Vermont to British Columbia. The target changed, but the dynamic is identical: attempting to extract value from a sport leveraged to nature faster than the community can adapt.
This isn’t a hit piece on Vail. The internet has enough of those. This also isn’t an expose into the culture of skiing, which is closely intertwined with the business of skiing. This is a financial analysis of what happens when you try to run a mountain more akin to a software company, and why the market is now repricing the entire thesis and what alternatives might be afoot in the industry.
Part 1: What Vail Actually Is
Vail Resorts (NYSE: MTN) owns and operates 42 mountain resorts across four countries. The portfolio spans destination icons (Vail, Whistler Blackcomb, Park City, Breckenridge, Stowe), Tahoe properties (Heavenly, Northstar, Kirkwood), three Australian resorts, two Swiss properties, and roughly 20 small regional/local ski areas in the Midwest and Northeast that came via the 2019 Peak Resorts acquisition.
The whole network is connected by the Epic Pass, which provides access to 90+ mountains globally and now accounts for approximately 75% of total visitation across Vail’s North American resorts.
For fiscal year 2025 (ending July 31), the company generated $2.98 billion in revenue, $844 million in Resort EBITDA, and $280 million in net income. The market cap sits at roughly $4.7 billion and they carry roughly $2.9B in debt.
How They Make Money
The revenue mix tells a story about what this business really is:
- Lift/pass revenue: ~$1.5B (51%) – This is the engine. The Epic Pass is pre-sold, non-refundable, and the incremental cost of one more skier through the gate is essentially zero. This is the highest-margin revenue line and the one that provides weather insulation. Think of this as a cash flow hedge.
- Ski school: ~$285M (10%) – High-margin labor. Premium priced ($200-800/day), but entirely volume-dependent.
- Dining: ~$275M (9%) – Captive-audience revenue. The $18 (scratch that, $28) burger has no substitution risk at 10,000 feet. But when visits drop 12%, dining drops 16%.
- Retail/rental: ~$300M (10%) – The weakest line. Two consecutive years of revenue declines. People buy gear online now. Plus, ski gear has not changed in 15+ years.
- Lodging: ~$320M (11%) – High revenue, nearly zero profit. Lodging EBITDA is roughly $22M on $320M in revenue. That’s a 7% margin. It’s a strategic amenity, not a profit center.
- Other: ~$275M (9%) – Summer operations, real estate brokerage, etc.
The Mountain segment generates approximately 97% of Resort EBITDA. Everything else is noise.
Where Profitability Actually Lives (and Doesn’t)
The Epic Pass is a genuinely a good financial product. It stabilizes revenue, creates a massive data asset (15 million+ individual customer profiles), and provides a floor under the business in bad snow years. In the current FY2026 season, the worst Rockies snowfall in 30+ years, skier visits are down 12% but lift revenue is only down 3%. That gap is the pass doing its job.
Unfortunately, the pass only protects the top of the P&L. When people don’t show up, dining revenue drops 16%, ski school drops 15%, and retail drops 6%. Half the business has zero weather insulation.
Meanwhile, free cash flow has been declining even as revenue grows. Operating cash flow went from $710M in FY2021 to $555M in FY2025. Capex has risen from $193M to $235M. Free cash flow has fallen from roughly $518M to $320M.
And capital returns have far exceeded what the business generates. In FY2025: approximately $330M in dividends plus $270M in buybacks equals $600M returned against $352M in free cash flow. The difference is funded by debt. Total debt stands at $2.93 billion. Net debt is 3.0x trailing EBITDA.
Late Apex Partners, the activist shareholder who dropped an 88-page bomb on the board in January 2025, put it simply: from 2019 to 2024, Resort Reported EBITDA increased 18%, yet free cash flow declined 15%. The metric management used for compensation had diverged from actual cash generation by 33 percentage points.
Part 2: When Did Vail Actually Make Money?
The peak was FY2018: $380M in net income on $2.01B in revenue for an 18.9% net margin. They haven’t come close since. Revenue has grown 47% since then, adding nearly $900M, and net income is on track to be less than half of what it was.
What happened between FY2018 and now?
Labor inflation (~$175M annual headwind). In FY2023, Vail projected a $175 million increase in labor expense, including the move to a $20/hr company-wide minimum. This was partly structural and partly self-inflicted.
Interest expense (~$126M annual headwind from the FY2017 base). Interest went from $42M in FY2017 to $180M in FY2025, driven by acquisition debt convertible notes, and the general rate reset from near-zero to 5%+. They just issued $500M in new notes at 5.625%. Going from 0% debt to 5.6% debt on $500M adds $28M in annual interest cost overnight.
Cost structure bloat. Operating expenses in FY2023 increased $314M, or 22.4%, driven by wages, inflation, and the incremental overhead of managing 42 resorts across four countries.
Part 3: The Capacity Trap
Here is where the conventional analysis stops and the structural argument begins.
Vail Resorts is not a ripping software company. It’s not a subscription company, despite what the Epic Pass suggests. It’s more akin to a restaurant that can’t open new locations. It is supply constrained, and the more of the thing you sell, the worse, at a point, the experience becomes.
A Chipotle can sell, say, 1,000 burritos a day. When it maxes out, it opens the store a few blocks over. A ski resort can serve roughly 12,000-18,000 skiers on a given day (depending on the resort’s Comfortable Carrying Capacity), and when it maxes out, the product gets (significantly) worse for everyone already there. And lets not forget, its an elastic good or service which means people can simply skip it.
Back to the capacity problem, every ski area is hogtied in more way than one. A restaurant can extend hours, add a second seating, renovate to add tables. A ski resort cannot meaningfully add terrain (its very hard) and consistently serving the same product (experience) is incredibly difficult. The Forest Service isn’t issuing new leases. Federal environmental review for a terrain expansion takes 5-10 years and costs millions with no guaranteed approval. A proposed expansion at Crested Butte in the 1990s encountered so much opposition the resort abandoned it entirely. There hasn’t been a brand-new ski mountain in the Pacific Northwest since the 1960s. The supply of skiable terrain in North America is, for all practical purposes, fixed.
So what does a rational operator do when demand exceeds a fixed supply?
In most industries, you raise prices to find equilibrium. Luxury goods are famous for this. Unfortunately, this has huge negative externalities in skiing, an affluent sport to begin with. But still, in many ways, Vail did the opposite. The Epic Pass was deliberately designed to increase volume by lowering the per-day cost. A $900 pass amortized over 20 ski days is $45/day. That’s cheaper than skiing was in the 1990s. More passes sold, more bodies on fixed terrain, longer lift lines, less powder to be skied (can you even ski powder in bounds anymore?).
On peak days, resorts routinely exceed their Comfortable Carrying Capacity by 25-30% to service passholders and vacationers alike.
This creates a doom loop:
- Sell more passes (the only revenue lever)
- More bodies on fixed terrain (demand exceeds capacity)
- Worse experience (lift lines, crowding, degraded snow)
- Brand damage (“Evil Empire,” “they are just out for money”)
- Attempt to monetize everything else to the point of “margin optimization” ($28 burgers, $50 parking, $800 lessons)
- Further degrades experience
- Repeat
And the escape valve? If there is one, I’d argue its backcountry skiing, where Vail captures (almost) zero revenue. US backcountry participants jumped from 700,000 to over 4.3 million in just a few years. The fastest-growing segment of American skiing is the one where the industry’s largest player makes nothing.
Part 4: The $1.5 Billion Bonfire of Buybacks
Instead of investing in infrastructure, capacity, or the guest experience, Vail spent $1.5 billion buying back its own stock. Since fiscal 2022 alone, they repurchased more than 5 million shares for over $1.1 billion. The most aggressive year was FY2023: roughly $500 million at an average price near $229 per share.
The stock is now at $131.
Every single share repurchased from FY2018 through FY2025 was bought above today’s price. The rough value destruction on the post-FY2022 buybacks alone: approximately $450 million. That’s real cash that left the company, spent on shares that are now worth substantially less instead of something meaningful.
A buyback is an investment decision. The company is saying “our stock is the best use of this cash.” When the stock drops 45% after you buy, you destroyed capital. $1.1 billion in cash traded for the elimination of shares now worth roughly $655 million. The difference is gone.
And they appear to have funded it with debt. The company issued $500M in 5.625% Senior Notes in July 2025 partly to cover liquidity after aggressive buybacks and dividends. They borrowed money at 5.6% which makes all those buybacks that much more expensive.
For context: that $1.5 billion could have built new infrastructure. Or funded employee housing across every mountain town in the portfolio. Or expanded snowmaking capacity to offset the worst Rockies snowfall season in 30 years. Or gone into the bike park side of things. Or paid down its debt (or at least required less debt). Instead, it went to financial engineering that didn’t work.
Rob Katz, who returned as CEO in May 2025, personally bought $5 million in stock at ~$131 on March 16, 2026. The insider buy received a lot of attention but its a PR stunt, being $5M is roughly his total comp per year. It says “I believe in the company*. But the reality is the company he runs has spent $1.5 billion of shareholder money at far worse prices.
Part 5: Was This Inevitable?
This is the question that separates a finance piece from a hot take. Did Vail “destroy” skiing, or is skiing just intrinsically difficult as a business?
Hal Clifford saw the destruction coming in 2002. His Downhill Slide documented how the “Big Three” publicly traded ski companies of the 1990s (Vail, Intrawest, American Skiing Company) were “theme park/real estate developers masquerading as sports facilities.” He identified the structural collision between “Wall Street’s demand for unceasing revenue growth and the fragile natural and social environments of small mountain communities.”
But Clifford also gave the nuanced answer when asked, a decade later, whether the demise of the ski bum lifestyle was inevitable: “Probably. We have an American tendency to take something charming and original and commodify it. Ski culture was similar to surf culture. This isn’t necessarily an entirely bad thing… the only way to preserve something is to put it in amber, and who wants to live in that?”
This is where culture and business collide, and I don’t want to understate this. Vail may have negatively contributed to the culture, but it isn’t solely responsible for it.
Running a ski resort is closer to running a small municipality than a business. Labor is 35-40% of operating costs, and the workers can’t afford to live in the towns they serve. Snowmaking consumes 67% of a resort’s total energy budget. A new chairlift costs $5-10 million. A gondola: $10-30 million. Insurance runs $500K to $3 million. Revenue is compressed into 4-5 months while costs run 12 months. And roughly 29% of American ski areas operate at a loss in any given year.
These challenges are structural. They have nothing to do with who owns the resort. JHMR faces them. Aspen faces them. The 200-acre family hill in New Hampshire faces them. The number of US ski areas has been declining for decades, from 700+ in the 1980s to roughly 480 today.
What Wall Street Changed: Time Horizon
Every mountain town was on a gentrification trajectory before Vail Resorts showed up. Aspen was “Fat City” by 1970. Jackson has the nation’s highest per-capita income from assets and the highest income inequality. Telluride, Park City, Steamboat, Bozeman, Sun Valley… the pattern is the same everywhere: mining town becomes ski town, ski town becomes resort town, resort town becomes wealth magnet, locals get displaced. Thompson identified it 55 years ago.
Vail didn’t create this dynamic. Vail accelerated the financialization it. The difference is speed and who captures the value.
A mountain resort managed with a 40-year time horizon can absorb change gradually. They can focus on the skier, first. They can improve the experience if need be. Cap capacity. Reinvest everything in the product. Accept lower (but sustainable) operating margins to build the underlying value of the brand. Let the scarcity value of the asset compound. As an example, the Kemmerers didn’t get rich from JHMR’s operating income (well, depends how you define rich). They got rich because they bought a one-of-a-kind asset in 1992 and it appreciated for 31 years before before handing it off to a new group of stewards. Same as buying a sports franchise.
A mountain resort managed for quarterly earnings and “maximizing shareholder value” seems to compresses those same forces into the present and attempts to extract value rather than compounding it. That’s intrinsically Vail (and often Wall Street’s) shortcoming. There is an incentive to pull as much profit forward, today, as possible often at the expense of tomorrow. The incentives are in the wrong place, which I must admit is ironic, because the actual value of a share should be all future cash flows discounted back to present value (but we know that’s not actually how equities work).
Part 6: The Contrast of other Ownership Structure
Thirty minutes over Teton Pass from where I’m writing this sits Jackson Hole Mountain Resort. Same industry. Same structural headwinds. Opposite ownership model. Opposite outcome. Well, mostly.
JHMR is co-owned by Teton County residents Eric Macy and Mike Corbat, their families, and a small group of co-investors including Jay Kemmerer. The Kemmerer family owned it for 31 years before selling in 2024, and their highest priority was maintaining its status as an independent, family-owned resort. They didn’t run an auction. They didn’t sell to Vail or Alterra. They sold to friends who live in Teton County with the aim of long term durability.
Total investment under Kemmerer ownership: over $300 million. All of it went into the mountain. The Bridger Gondola. A new Aerial Tram. High-speed quads. Snowmaking expansion. New facilities. This season, the new Sublette quad means every major lift on the mountain is now high-speed (which may or may not be good).
For six consecutive seasons, JHMR has capped daily lift access. Season pass holders ski without reservations. Ikon and Mountain Collective holders must reserve spots. Tickets sell out (capacity capped). The product justifies the price because the experience isn’t degraded by overcrowding, and they seem okay being realistic with the amount of profit they drive year to year, because they are not trying to appease short term focused investors. I honestly don’t ski there super often, but when I do, the on hill experience is absolutely world class. Best there is when it comes to riding lifts.
JHMR faces every structural challenge Vail faces. Labor shortages. Energy costs. Climate variability. Seasonality. Capex demands. And I know a lot of my friends reading this are going to say “JH lost its soul 20 years ago”. Sure. Change is inevitable. But I’ll pay to ski JHMR. I won’t pay to ski Vail. And yes, I know, terrain and snow have a lot to do with this, but if the lines were like vail resorts and chaos was unimaginable on hill, I would sing a different tune about JHMR, too.
The ownership of JHMR can optimize for 40 years instead of 4 quarters. They don’t need the mountain to produce as much cash as possible. They need it to be worth more next decade. That’s a fundamentally different optimization function.
This is the sports team analogy. An NFL franchise is worth $5-10 billion not because of any given season’s P&L, but because someone stewarded a scarce, irreplaceable cultural asset over decades. The mountains are the same. Vail, Whistler, Park City, Jackson Hole are coveted assets with scarcity value that appreciates (almost) regardless of season to season operating performance. The question is whether you steward that asset or extract from it.
The Private Equity Example
The Crown family has owned the Aspen Skiing Company since the 1980s and co-founded Alterra with KSL Capital Partners. Worth noting: Alterra’s CEO just stepped down and rumor has it poor performance is to blame. We could compare and contrast Alterra and Vail all day and come to no firm conclusion, but the one thing worth flagging is that Alterra is PE-owned. So does private equity put incentives in better places, or just different ones?
For the uninitiated: PE-owned doesn’t mean patient. A PE fund is still on a clock. The fund needs to divest within its lifecycle, usually around ten years. That means ownership needs to see the asset tangibly appreciate from acquisition to exit, either through profit growth or higher valuation multiples (or both). The time horizon is longer than quarterly earnings pressure, sure. But it’s still not aligned with the 30-to-40-year compounding horizon that a ski resort naturally rewards. You’re still optimizing for a transaction, just a slower one.
That’s the deeper point: the structural economics of skiing may be incompatible with both public markets and conventional private equity. The transparency and short-termism of the former, the exit pressure of the latter. This is where family office ownership, the JHMR model, might be the structure that actually fits the asset. Not because family offices are smarter, but because their time horizon more closely matches the mountain’s. No quarterly calls. No fund lifecycle. No exit clock. Just: make the mountain better, let the scarcity value compound, and hand it off to the next steward.
Part 7: The Repricing
Let’s bring this back to the stock.
MTN traded at 25-30x earnings during the 2017-2021 run because the market treated it like a growth company, rates were low and COVID created a lot of distortion in the market around outdoor goods (if you read this substack, you know this). Acquisition-driven revenue growth, expanding pass sales, “recurring revenue” narrative. The stock was priced for compounding.
But this isn’t a growth business. It’s a mature, capacity-constrained, weather-dependent operator with a fixed asset base, a leverage-heavy balance sheet, and a 6.5% dividend yield that exceeds free cash flow. The re-rating from $376 to $131 isn’t just because of a bad snow year. It’s the market slowly figuring out that $3 billion in revenue might be close to the ceiling, not a waypoint on the way to $5 billion. Its also the market re-rating the real amount of risk within this asset (weather, fickle people who have other options, elasticity etc).
That said, the underlying assets are valuable. Vail Mountain, Whistler, Park City, Crested Butte are irreplaceable, scarce, and appreciating in intrinsic value regardless of any given quarter. Nobody is building new Whistler. In the hands of a long-term steward, these properties are extraordinary.
But the market isn’t pricing the assets, it’s pricing the operating model. And the operating model, with its $3 billion in debt, its $330 million annual dividend obligation, its history of buybacks at prices that are now 45% underwater, and its structurally declining margins on growing revenue, is telling you something. This is a riskier asset with less growth. Who wants to own that when you could instead own something like, say, Google?
Clifford wrote it in 2002: “Only when control of skiing is wrested from publicly traded corporations, which value profit to the near exclusion of all other values, and vested with people committed to the long-term success of the sport and of mountain towns will skiing, and ski towns, have a fighting chance.”
Twenty-four years later, the stock chart is writing the same sentence, just in a language public equity owners understand.
Part 8: Where this leaves us
I’ve spent most of this piece on financials and incentive structures. What I’ve underweighted is something simpler: experience is a reward loop, and the loop is based on the whole experience, not any single part of it.
Consider the average Front Range skier. They leave Denver at 5:30 AM to beat traffic on I-70. They don’t beat it. They sit in a 120-minute crawl through the Eisenhower Tunnel, arrive to a full parking lot (which is likely paid), followed by a shuttle to the base, wait 30 minutes for the first chair, ski mediocre snow that’s been chopped up by 10 AM, eat a $22 bowl of chili in a cafeteria that smells like wet boots, and then sit in two hours of eastbound traffic to get home. That’s a 12-hour commitment for maybe 3 hours of actual skiing, and the skiing probably wasn’t anything to write home about. Hell, I’d wager your autonomic nervous system was triggered most of the experience. The entire thing was an exercise in “don’t.” Don’t crash the car. Don’t get run over by a skier. Don’t get cut in line. Don’t be a sucker for the $28 cheeseburger.
Broken reward loops do not produce loyalty. People do not complain endlessly. They just stop showing up, or they redirect their time and money elsewhere: backcountry touring, mountain biking, snowmobiling, anything that feels more rewarding from start to finish. The behavior change is already in the numbers. Epic Pass units declined for the first time in the program’s history.
That is the deeper problem, not just for Vail, but for the entire corporate ski model. These are not quarterly headwinds. They are slow-moving structural forces that erode the willingness to spend. A company can cut costs and reshuffle management. It cannot fix I-70, make it snow, or reverse twenty years of accumulated experience debt.
So did Vail break skiing?
I’m not sure it matters anymore. The question I care about is whether anyone is going to fix the incentives to be more aligned with the long term success of the sport I love.
Thompson fought the greedheads in Aspen in 1970 and lost by fewer than 100 votes. But the Freak Power candidates who came after him won their races, and the policies they built gave Aspen 50 years of institutional resilience. The fight wasn’t pointless. It bought time. Clifford diagnosed the corporate extraction model in 2002 and prescribed: “Only when control of skiing is wrested from publicly traded corporations and vested with people committed to the long-term success of the sport and of mountain towns will skiing have a fighting chance.” He was right then. He’s right now.
The kind of change that might actually matter would require owners with longer time horizons and a fundamentally different relationship with the asset. Less extraction. More stewardship. Less financial engineering. More investment in the thing itself.
But I’ve watched this industry long enough to know that what works and what wins are not always the same thing. The $131 stock price says the market is repricing Vail’s model. It does not say the market is ready for a better one.
As a skier and someone who lives in the shadow of the Tetons, I would love to believe that’s where this ends. That the stock price forces a reckoning. That incentives get realigned between owner, operator, and skier. But I don’t see how anything materially changes with respect to how Vail Resorts owns and operates its business.
And maybe that’s the irony of the whole thing. Vail may have made skiing worse. Vail’s business is clearly going the wrong direction. But what’s left might actually be fewer people and a better on hill experience even if its bad business.
Jeff Brines writes this newsletter and is from Victor, Idaho, 30 minutes over Teton Pass from Jackson Hole Mountain Resort. He is a fractional CFO/CTO at GuideRail Advisory and a technology entrepreneur. None of the above constitutes investment advice.