The travel industry has faced more than its fair share of challenges over the past several years. The COVID-19 pandemic brought travel to a standstill, and even as people have returned to the road and released pent-up demand, companies providing travel services still face considerable struggles to deliver the high-quality service that travelers expect. That gets particularly difficult when weather doesn't cooperate.
A couple of travel stocks gave updates Wednesday morning on how the recent winter storms in late December affected their operations. For United Airlines Holdings (UAL -1.25%), investors seemed generally pleased with the way the airline giant withstood pressures that hit some of its competitors harder. Meanwhile, Vail Resorts (MTN -0.35%) loves to get snow, but challenges in getting travelers from their homes to Vail's destination resorts weren't necessarily what shareholders wanted to see.
United flies higher
Shares of United Airlines Holdings climbed 3.5% in premarket trading Wednesday. The airline's fourth-quarter financial report came out late Tuesday, and it included a lot of positive news both about past performance and what it expects for 2023.
United's fourth-quarter results not only showed huge bounces from year-ago numbers, but also showed that the airline has recovered from the hit it took at the beginning of the COVID-19 pandemic. Total operating revenue of $12.4 billion was up by more than half from year-ago levels and 14% higher than in the same period before the pandemic in 2019. Net income weighed in at $843 million, reversing a year-earlier loss and rising 31.5% from 2019 levels.
United highlighted its quick recovery from the weather event dubbed Winter Storm Elliott, with 90% of travelers from Dec. 21 to 26 arriving at their destinations within four hours of their scheduled arrival time. United called out its extensive investments in technology and infrastructure as well as the resilience of its workers in bouncing back quickly from the harsh storm.
Shareholders were also pleased with United's outlook, which includes a forecast for between $10 and $12 per share in earnings for 2023. With the stock trading in the low $50s, that seems to offer a huge opportunity for value investors if United can make good on its expectations.
Vail gets more visitors
Shares of Vail Resorts, meanwhile, were little changed Wednesday morning. The ski resort operator released some of its business metrics for the early part of the ski season, and they revealed a mixed picture for investors.
In general, Vail saw solid growth for the 2022-2023 season. Total skier visits rose 12.5% through Jan. 8 compared to the same period in 2021 and 2022, with total lift ticket revenue rising 5.3% year over year. Vail enjoyed massive gains in ancillary revenue sources, with ski school sales climbing 36% and dining revenue up 58%. Retail and rental revenue posted a 34% advance.
CEO Kirsten Lynch noted, however, that visitation levels at its resorts in the western U.S. fell below expectations, specifically citing airline disruptions during the peak holiday period as well as extreme weather forcing some resorts to close temporarily. Lynch was hopeful that visitation levels will rise later in the season, due in large part to solid season pass sales coming into the period.
Nevertheless, Vail now expects that full-year fiscal 2023 adjusted pre-tax operating earnings for the resort segment will be in the lower half of the previous guidance the ski resort operator provided in September 2022. That didn't seem to worry investors too much, but it is something to keep in mind when Vail releases its full quarterly numbers in March.
