Vail Resorts shareholder Late Apex Partners LLC sent a letter Monday to the resort company’s board expressing alarm at what the firm called deteriorating brand value and demanding change.
In the letter, Late Apex founder Taylor Schmidt said, “Over the past five years, Vail’s performance has been unacceptable. We believe Vail is fixable, but the board must act now to hold management accountable.”
“Vail Resorts received this letter from an investor, which was the first communication the company had received from this individual,” an unidentified Vail Resorts spokesperson said Tuesday. “We engage frequently with our many different shareholders and value their feedback.“
Late Apex Partners outlined what the shareholder considers successes and failures of the company in the letter and an accompanying research presentation, and called for the replacement of Vail Resorts CEO Kirsten Lynch and CFO Angela Korch.
Financial and other news media, including The Wall Street Journal, reported this week on the shareholder’s letter and presentation.
The letter also blamed “Vail’s DEI-related histrionics” for squandering opportunities for expansion with local and regional investments.
Schmidt asserted that Vail has massive potential whereby the company’s consistent visitation and stability as the largest resort operator in the world is enough to fuel Late Apex Partners’ continued investment in Vail Resorts, making it the firm’s single largest position.
“However,” an the presentation said, “Vail’s early success has led the company to become complacent. We view Vail’s core failure as its total loss of focus on its North Star: delighting the customer.”
Schmidt declared Vail Resorts has become known locally “as the evil empire,” having “cut out the heart of each mountain,” and said, “Vail’s recent ski patrol strike at Park City represents a boiling point. Management must go.”
The Park City Professional Ski Patrol Association recently ratified a new contract with Vail Resorts following a 13-day strike that resulted in significant complications on the mountain as holiday crowds, limited terrain and safety concerns left many guests frustrated and disappointed. The strike occurred from Dec. 27 through Jan. 7, during which available terrain ranged from 13% to 30% of the mountain’s capacity.
The presentation drew parallels with the success of Alterra Mountain Company’s Ikon Pass, and compared Alterra’s partnership and expansion of Deer Valley Resort, which trades at $540,000 in replacement costs per skiable acre, while Vail trades at $175,000 in comparison.
“Alterra prioritized maintaining the unique identity of each resort. Maintaining the local heritage of ski resorts deeply resonated with core skiers,” according to the presentation.
“The Park City ski patrol strike underscores management’s willingness to penalize guests for their own failures. In efforts to cut costs, Vail has walked away from partnerships, alienated the ski community, and destroyed consumer equity,” the presentation asserted.
Late Apex Partners LLC called for the ousting of CEO Lynch, CFO Korch and Chairman Robert Katz. Chairman Katz has sat on the board for 28 years. Late Apex credited Katz with “building Vail into a juggernaut,” though they claim that Katz has sold over 80% of his stock holdings in Vail Resorts, citing that as evidence of management’s lack of confidence in the company’s future.
The research and letter claimed that Lynch and Korch are the principal parties responsible for Vail Resorts’ drop in value, and asserted that they lack control of the company.
“Given Katz’s longstanding leadership imprinted on the culture, we question who is the ‘real boss’ at Vail: Katz or Lynch?” the presentation said.
Late Apex Partners and Taylor Schmidt declined to comment aside from the letter and presentation.
Meantime, Park City Mountain has returned to form with ski patrol back at work and over 95% of terrain available this week. Vail Resorts has offered a 50% credit for each day skied at Park City Mountain between Dec. 27 and Jan. 8, during the strike. As of Tuesday morning, Vail Resorts shares were trading at $171.53 — 23.26% down year over year.