Please stand by. Your program is about to begin. If you need assistance on today's conference, please press star zero. Good afternoon, welcome to the Vail Resorts Fiscal 2023 Q2 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. If you'd like to ask a question at that time, please press star one on your telephone keypad. If you need to remove yourself from the queue, press star two. To get to as many questions as time permits, we ask that you please limit yourself to one question and one follow-up. At any time, if you should need operator assistance, press star zero. I want to turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. You may begin.
Thank you. Good afternoon, everyone. Welcome to our fiscal 2023 Q2 earnings conference call. I'm pleased to have Angela Korch joining me on the call today, who recently rejoined Vail Resorts as 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. 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 ninth, 2023. 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. With that said, let's turn to our fiscal 2023 Q2 results. Overall, we are pleased with the strong guest experience being delivered at our resorts, supported by the investments we made in our resorts and in our employees, which enabled greatly improved staffing levels and employee satisfaction scores, a return to normal operations, and strong guest satisfaction scores. Our ancillary businesses, including ski school dining and rental and retail, experienced strong growth compared to the prior year period when staffing shortages constrained capacity of ancillary businesses.
We believe these investments in staffing and our commitment to enhancing the guest experience establish a strong foundation for future growth. Improved conditions at our Colorado, Utah, and Tahoe resorts enabled select early resort openings and drove strong early season local visitation. The easing of travel restrictions in Canada contributed to a strong rebound in destination visitation at Whistler Blackcomb relative to the prior year period. As discussed in our January metrics release, visitation at our Western US resorts was negatively impacted by airline travel disruptions during the peak holiday period, as well as severe weather disruptions at our Tahoe resorts. In Tahoe, significant snowstorms continued to impact resort access and limit our ability to fully open our resorts throughout the remainder of the quarter.
Across our 26 Midwest, Mid-Atlantic, and Northeast resorts, collectively referred to as our Eastern U.S. resorts, results for the quarter were negatively impacted by abnormal weather conditions, which significantly reduced operating days, terrain availability, and activity offerings across the region. This impacted demand and increased operating costs, including snowmaking, grooming, and related labor costs. In particular, results at our Eastern U.S. resorts were significantly below expectations in the post-holiday period as conditions did not return to normal after the holidays, as was incorporated in our guidance, with January having only 50%- 60% of lifts and terrain open during that period. Compared to the Q2 of fiscal 2022, resort net revenue increased approximately 21%, and we achieved record Q2 visitation and resort net revenue as our ancillary lines of business continued to significantly outperform the prior year.
The recent significant investment in our employees helped drive increased staffing levels relative to the prior year, enabling our mountain resorts to deliver normal operations of important guest experiences such as our restaurants, lodging, ski and ride school, and rental and retail locations, which helped drive a return of ancillary spending. Dining revenue rebounded strongly from the prior year period, though underperformed expectations for the quarter as guest dining behavior has not fully returned to pre-COVID-19 levels following two years of significant operational restrictions associated with COVID-19. Resort-reported EBITDA decreased approximately 1% from the prior year as profitability was impacted by the investment in our employee and guest experience, early openings and expanded terrain at our Western resorts, as well as increased operating costs from the abnormal weather conditions at our Eastern U.S. resorts.
We achieved normalized staffing levels this season to ensure we are delivering a strong guest experience. We are pleased with the significant improvement in guest satisfaction scores, which have exceeded pre-COVID-19 levels at our destination resorts. Now I would like to turn the call over to Angela to further discuss our financial results, season-to-date metrics and fiscal 2023 outlook.
Thanks, Kirsten, and good afternoon, everyone. It is great to be back with Vail Resorts and to be speaking with you today. For the Q2 of fiscal 2023, net income attributable to Vail Resorts was $208.7 million or $5.16 per diluted share, compared to the prior year of $223.4 million or $5.47 per diluted share. Resort Reported EBITDA was $394.8 million in the second fiscal quarter, which compares to Resort Reported EBITDA of $397.9 million in the same period in the prior year.
Turning to our season to date metrics for the period from the beginning of the ski season through Sunday, March 5, 2023, compared to the prior year period through March 6, 2022. The reported ski season metrics are for the company's North American destination mountain resorts and regional ski areas, including the results of Seven Springs, Hidden Valley and Laurel Mountain in both periods, and excluding the results of the Australian ski areas in Andermatt-Sedrun in both periods. The data mentioned in the release is interim period data and is subject to fiscal quarter end review and adjustments. We are pleased with the continued growth in visitation and ancillary revenue growth throughout the season. Season to date, total skier visits were up 3.6% compared to the fiscal year 2022 season to date period.
Season to date total lift ticket revenue, including an allocated portion of our season pass revenue for each applicable period, was up 2.5% compared to the fiscal year 2022 season to date period. For our ancillary results, season to date ski school revenue was up 27.6%. Dining revenue was up 37.2%. Retail and rental for North American resort and ski area store locations was up 21.2% compared to the prior year period. Season to date results at our Eastern U.S. resorts continued to be negatively impacted by periods of both unseasonably warm and extreme cold weather, which disrupted operating days, impacted demand and increased operating costs.
Across our Eastern U.S. resorts, over 25% of planned operating days for the 2022, 2023 ski season were negatively impacted by extreme weather events, including many days with full or partial resort closures. At our Tahoe resorts, significant snowstorms continued to impact resort access and limited our ability to fully open our resorts. In the Rockies, destination visitation has continued to improve relative to expectations as the season has progressed past the peak holiday period. Whistler Blackcomb continues to see a strong rebound in destination visitation, including international, relative to the prior year period, driven by the easing of travel restrictions in Canada.
Our ancillary businesses continued to see strong growth over the prior year period, driven by increased staffing levels that enabled our mountain resorts to deliver normal operations of important guest experiences such as our restaurants, lodging, ski and ride school and rental and retail locations, which helped drive a return of ancillary spending. Now turning to our outlook for fiscal 2023. While we continue to expect strong demand from our destination guests at our Western North American resorts for the remainder of the season, we are lowering our guidance for fiscal 2023, primarily due to the significant weather disruptions at our Eastern U.S. resorts throughout the season to date period, as well as continued significant snowstorm disruptions at our Tahoe resorts.
For fiscal 2023, we expect contribution margin from our 26 Eastern U.S. resorts, excluding an allocated portion of past product revenue, to underperform initial expectations provided in September 2022 by approximately $43 million, with the majority of the underperformance occurring after the peak holiday period. The weather disruptions in the East and in Tahoe impacted both operating days and visitation and also increased operating costs. Our Eastern U.S. resorts have a significantly lower portion of skier visits in advanced commitment products relative to our Western destination resorts. The financial results this year further strengthen our resolve to continue to drive guests into an advanced commitment product, particularly in our Northeast markets.
While we are disappointed to be lowering guidance for the fiscal year, we know that the financial impact to the company of weather and travel disruptions was greatly mitigated by our advanced commitment products, which provide an incredible value to the customer and much greater stability to our company and our communities. We now expect net income attributable to Vail Resorts for fiscal 2023 to be between $282 million and $328 million and Resort Reported EBITDA for fiscal 2023 to be between $831 million and $859 million. We estimate resort EBITDA margin for fiscal 2023 to be approximately 29.4% using the midpoint of the guidance range.
The updated outlook for fiscal year 2023 assumes a continuation of the current economic environment, normal weather conditions and no material impacts associated with COVID-19 for the remainder of the 2022, 2023 North American and European ski season or the 2023 Australian ski season.
It's important to note that there continues to be uncertainty around the economic outlook and the impact that may have on travel and consumer behavior. The guidance assumes current exchange rates as outlined in our earnings release. Relative to our original September 2022 guidance, we estimate the movements in exchange rates will result in a fiscal 2023 guidance impact of approximately negative $6 million for Resort Reported EBITDA. Our balance sheet remains strong. Our total cash and revolver availability as of January 31st, 2023 was approximately $1.9 billion, with $1.3 billion of cash on hand, $415 million of U.S. revolver availability, and CAD 212 million of revolver availability under our Canadian facilities. As of January 31st, 2023, our net debt was 1.9 times trailing twelve 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 $2.06 per share, representing an 8% increase in our quarterly dividend. The dividend will be payable on April 11, 2023, to shareholders of record as of March 27, 2023. Our board of directors has increased our authorization for share repurchases by 2.5 million shares to approximately 3.5 million shares, and we intend to be aggressive in returning capital to shareholders while always focusing on the long-term value of our shares.
We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guests and employee experience, high return, capacity expanding capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase programs. Now I'll turn the call back over to Kirsten.
Thank you, Angela. We remain dedicated to delivering an exceptional guest experience, and we'll continue to prioritize reinvesting in the experience at our resorts, including consistently increasing capacity through lift, terrain, and food and beverage expansion projects.
As previously announced, the company expects to invest approximately $180 million-$185 million, excluding one-time investments related to integration activities, deferred capital associated with the Keystone and Park City projects, $5 million of reimbursable investments associated with insurance recoveries, and $10 million of gross capital investments at Andermatt- Sedrun. At Keystone, we received U.S. Forest Service approvals and plan to complete the transformational lift-served terrain expansion project in Bergman Bowl, increasing lift-served terrain by 555 acres with the addition of a new six-person high-speed lift. At Breckenridge, we plan to upgrade the Peak 8 base area to enhance the beginner and children's experience and increase uphill capacity from this popular base area.
The investment plan includes a new four-person high-speed five chair to replace the existing two-person fixed grip lift, as well as significant improvements, including new teaching terrain and a transport carpet from the base to make the beginner experience more accessible. At Stevens Pass, we are planning to replace the two-person fixed grip Kehr's Chair with a new four-person lift, which is designed to improve out-of-base capacity and guest experience. At Attitash, we plan to replace the three-person fixed grip Summit triple lift with a new four-person high-speed lift to increase uphill capacity and reduce guest time on the longest lift at the resort. These projects are subject to regulatory approvals and are currently planned to be completed in time for the 2023-2024 North American winter season.
Additionally, the company plans to expand parking by more than 500 spaces across Heavenly, Mount Sunapee, Liberty, and Roundtop to improve the guest experience. At Whistler Blackcomb, subject to final permitting, we plan to replace the four-person high-speed Fitzsimmons lift with a new eight-person high-speed lift in calendar year 2023. We now plan to replace the four-person high-speed Jersey Cream lift with a new six-person high-speed lift in calendar year 2024, given Doppelmayr Canada has informed Vail Resorts that they cannot install both lifts this summer due to their labor and resource constraints. The company is planning to accelerate certain investments in our gear rental business to enhance the experience for guests into calendar year 2023, which will offset the deferred cost related to the Jersey Cream lift installation.
The company is planning to introduce new technology for the 2023-2024 ski season at its U.S. resorts that will allow guests to store their pass product or lift ticket directly on their phone and scan at lifts hands-free, eliminating the need for carrying plastic cards, visiting the ticket window, or waiting to receive a pass or lift ticket in the mail. Once loaded on their phones, guests can store their phone in their pocket and get scanned hands-free in the lift line using Bluetooth Low Energy technology. In addition to the significant enhancement of the guest experience, this technology will also ultimately reduce waste of printing plastic cards for pass products and lift tickets and RFID chips as part of the company's Commitment to Zero.
For the first year of launch, to ensure a smooth transition, the company will provide plastic cards to all guests, and in future years, plastic cards will be available to any guests who cannot or do not want to use their phone to store their pass product or lift ticket. We are also excited to announce the launch of our new My Epic app, which will accompany our mobile pass technology and will include interactive trail maps, real time and predictive lift line wait times, personalized stats, and other relevant information to support the guest experience. The company is also investing in network-wide scalable technology that will enhance our analytics, e-commerce, and guest engagement tools to improve our ability to target our guest outreach, personalize messages, and improve conversion.
In addition to these investments, we are planning to invest approximately $10 million at Andermatt- Sedrun in high impact growth capital projects as an initial step in a multiyear strategic growth investment plan to enhance the guest experience on the mountain, which will be funded by the CHF 110 million of capital that was invested as part of the purchase of our majority stake in Andermatt- Sedrun. As part of the calendar year 2023 investments, we are planning to upgrade and expand Sedrun's snowmaking to enhance the guest experience. In addition, we plan to enhance the on mountain dining experience with renovations to the Milez and Natschen restaurants and replacement of the Valtgeva restaurant. These investments are expected to be completed ahead of the 2023/2024 European ski season and remain subject to regulatory approvals.
Including $1 million of one-time investments related to integration activities, $10 million of deferred capital associated with Keystone and Park City projects, $5 million of reimbursable investments associated with insurance recoveries, and $10 million of gross capital investments at Andermatt-Sedrun, our total capital plan for calendar year 2023 is expected to be approximately $206 million-$211 million. Turning to pass sales, we are excited to launch pass sales for the 2023/2024 season with a wide range of advanced commitment products, including our Epic Day Pass, which provides one to seven days of access at our owned and operated resorts, and our unlimited Epic Pass products, which can provide unlimited access to 41 resorts every day of the season, and additional access to partner resorts with no reservations required at any resort except Telluride.
For the 2023/2024 European ski season, we are excited to add Disentis as a long-term partner resort, providing pass holders access to the largest ski area in the heart of Switzerland, spanning across Andermatt, Sedrun, and Disentis. We are pleased to welcome our pass holders back to the program as we roll out new technology and infrastructure upgrades next season. We look forward to welcoming more guests to the benefits of our advanced commitment program. On average, our pass prices have increased 8% over the prior season's launch price and continue to represent a strong value to our guests. In closing, I would like to thank all of our employees, especially our frontline teams, for their passion, hard work, and commitment to creating an experience of a lifetime for our guests. I particularly want to thank all of our employees in the Tahoe region.
A state of emergency has been declared for the Tahoe region as a result of the expected upcoming storms, and the safety of our employees and our guests continues to be a top priority. The guest experience that our employees create is our mission as a company and lies at the center of our success. We all look forward to welcoming guests to our mountain resorts this spring. At this time, Angela and I will be happy to answer your questions. Operator, we are now ready for questions.
At this time, if you wish to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing star two. Again, please limit yourself to one question and one follow-up. We'll take our first question from Shaun Kelley of Bank of America.
Hi. Good afternoon, everyone. Hi, Kirsten and Angela.
Hi, Shaun.
Just maybe to lead off here, you know, obviously it was a pretty challenging operating environment. You know, two areas that, you know, I'd love to just hit on briefly. One, would be could you quantify some of the disruption in Lake Tahoe? It seems like you know, you were able or willing to do that in the Northeast, you know, Tahoe, we've all read and seen the headlines. The environment there is pretty dramatic. Is that not material, or is there a reason maybe because it's ongoing that we haven't? Secondarily, Kirsten, if you could just comment, there was a change on the executive front, as it relates to the operations.
You know, could you just comment a little bit on that and sort of what's being done to maybe, you know, adjust the organization to some of the volume levels that we're seeing in the business right now?
Thanks, Shaun. Appreciate your comments. You know, there are a lot of things that we are very pleased about from this season as you noted, a challenging operating environment. We are, you know, incredibly disappointed by the limits to our operations in the East region as well as in the Tahoe area as well. We quantified the East region in particular because of how significant it is that there are 26 resorts in that region. The majority of the impact occurred after the peak holiday season and we had expected it to improve. Instead it actually got worse. The Tahoe storms and impacts of those storms are factored into our guidance. We believe once we get through that cycle, set us up to have a strong spring in Tahoe.
As it relates to the operations and. Can you repeat your second question, Shaun, just to make sure I'm clear?
Yeah, I mean, I believe the Chief Operating Officer, you know.
Oh, yes.
Was changed. Bill Rock was obviously, you know, promoted up there. You know what maybe what prompted that change and, you know, what will be some of the priorities on the operating front, just maybe as we kind of adjust to what the volumes are in the business right now.
Regarding the President of the Mountain Division, this decision to me is about the right leadership for the future of the Mountain Division. We are incredibly grateful for James and his contributions over the many years he's been with the company. He's had a significant impact across many different businesses, including developing leaders. Bill Rock is the right leader for the future of the Mountain Division and to take that division into the future. Bill brings almost three decades of experience in the industry, incredible expertise and experience in mountain operations, and is an incredibly strong leader. We are very excited to have Bill move into that role, effective May first.
Thank you very much.
Thanks, Shaun.
Our next question is from Ben Chaiken of Credit Suisse. Your line is open.
Hey, how's it going?
Hi, Ben.
I guess trying Shaun's question a different way. There's a lot of moving parts operationally this year. You have weaker West Coast destination, which was discussed in the January update of Tahoe weather and then poor East Coast snowfall, obviously.
Mm-hmm.
You called out East Coast being a $43 million contribution margin impact post-holiday. I guess, simplistically, after adding back the $43 million of East Coast impact as the remainder of the delta relative to the January guide, Tahoe, or was Colorado, Utah lighter than originally expected? If that makes sense.
Yes. The majority of the decrease from the January metrics guidance to our current guidance is the impact that we experienced in the East, which is why we quantified that. The remainder of the guidance adjustment, the most significant driver of it is Tahoe. Of course, we're always looking at every resort, and all of the indicators, and those are all factored into that. I think you can interpret it that the part of that being the FX that we already noted. I think you can interpret that the next biggest driver of the reduction is Tahoe. The East impact is just so significant, we wanted to make sure that we quantified that, and it's a combination of demand impacts as well as cost impacts.
Understood. That's very helpful. Then, in your prepared remarks, you mentioned some gear rental investments. Can we dig in there of what might be offered next year? Then related, I think better capturing ancillary spend is a growth area for you guys. Now that you have a few years of both full season and day passholder benefits to analyze, are there any broad strokes you can provide in terms of how penetrated you are of the theoretical TAM? Like, is this an eight out of 10, two out of 10, somewhere in between? That'd be great.
Well, we believe, as you know, we believe that ancillary is a big opportunity for us, and we believe we've created a foundation with our network and our over two million pass holders that we've built an incredible foundation that enables us to do some things that we haven't been able to do in the past. Ancillary is one of those opportunities. I would anticipate that we will talk more, in more detail about that at the upcoming investors conference.
Okay. I guess more color on the gear rental investments then, or is that available now?
We, we're not ready to share anything specific on that as we're continually investing in that business. Anything else that we wanna discuss on ancillary, we'll share and talk about in more depth at the investor conference. Completely agree with you that there is a big opportunity. On gear rental in particular, it's a very competitive landscape. There are a lot of players in the market, and we do believe that there's an opportunity for growth there.
Okay. Thank you very much. I appreciate it.
Thanks, Ben.
Our next question is from Chris Woronka of Deutsche Bank. Your line is open.
Hi, good afternoon, everyone. I think one of the things in the prepared comments, right, was a mention of trying to get more folks that typically just go to the East Coast into an advanced commitment product. Well, how do you do that? I mean, is that a function of? Are you gonna have to use price to do that? Is there, or is there another way to try to get more of those folks into a pass?
Thanks for the question, Chris. You know, the East is quite unique for us in that it over-indexes on lift tickets relative to our other geographies. When you think about the progress that we've made in building our pass business, we have really transformed our Rockies and our West region resorts in terms of a commitment in advance to a pass. The East is a little bit different, where there's still a large percentage of the visitation that occurs on lift tickets. That is part of the reason why we saw an impact from the limitations on our operations and a significant impact because of that reliance on lift tickets. We are very focused on it, and we believe that it is a big opportunity for us in terms of stability for the company.
By the way, what happened here with the East is exactly why we have been focused on pass. It is exactly why this strategy of moving as many of our guests into a pass is so critical. In the East, in particular, we have products and pricing that have already launched into the marketplace, and the goal is to use our data to really be targeted, segmented, and targeted to convey the benefits of moving from a lift ticket into an advanced commitment product. We have a Northeast Value Pass that has been in the market for a couple of years. We also have an Epic Day Pass that is specifically tailored for those local resorts in the Midwest and Mid-Atlantic and East.
Our goal is to continue to grow the pass business, really focus on that East area, and at the same time, by moving that, those visits out of lift tickets into the pass, that we create more stability for the company, for situations like this. I certainly think that the significance of what our teams in the East have been dealing with, in terms of, late openings, early closures, limited terrain. The significance of what they are dealing with could actually have been a much more significant impact on the company than this guidance reduction that we're announcing. We're very pleased that with the stability that we have, and we believe there's more to be done there.
Okay, thanks. Super helpful with all the detail. Just as a follow-up, and you guys had talked a lot about this last year, employee housing investments. It sounds like, you know, there's less pressure there this year, but maybe you can just give us a quick update and rundown of, you know, where you are in your initiatives and whether the market conditions are improving or not in that, in that regard on employee housing.
Absolutely. We are so thrilled to have gotten fully staffed, the investments that we made in our employees and wages and benefits, really resulted in us getting to a great staffing situation. Affordable housing in our mountain communities is always a challenge. It has been a challenge for a long time, and I think it continues to be a challenge. Obviously, this year, thankfully, it was not, it did not prevent us from getting fully staffed. What you'll see from us is that we will be continually focused on it and continually looking for opportunities, whether that is building housing on our own land or creating partnerships in our mountain communities to enable projects.
We have a couple of projects, one that came online this year at Park City Mountain, and we have some that are in various stages of the process of getting to approvals or construction. This just needs to be a continual focus for the company. Is it always going to be something that prevents us from getting staffed? Obviously not, since we got fully staffed this year. That does not mean that we ever take our foot off the gas in trying to make this better because it is such a huge challenge in our mountain communities.
Okay. Very helpful. Thanks, Kirsten.
Our next question is from Laurent Vasilescu of BNP Paribas.
Good afternoon. Thank you very much for taking my question. Kirsten, it's great to hear about the investments in the high-speed chairlifts, as, you know, these investments have been made over the years. As we think about this ski season and how just disruptive it was in the East Coast with the warm season, do you think you might need to make some more investments in snowmaking capabilities to potentially offset this long-term headwind?
Yeah, I think that's a great question, Laurent. I think, you know, that's something that we absolutely will be looking at and assessing. You know, we have some incredible high-efficiency snowmaking in the East and our mountain operations team will be looking at, you know, where do we need to make additional investments for the future? I would say in this particular situation with what happened in the East region and the significant impact was related to cold temperatures. You know, these resorts in this grouping of the East are virtually 100% reliant on snowmaking. In order to do snowmaking, you need cold temperatures. What happened this year is they could not get enough cold temperatures to actually make the snow, and in some cases, we're down to grass in some areas as early as January.
Yes, on the snowmaking and on pass and the network that we've created and continually moving people out of lift tickets into a pass.
Great. That may be a good segue for the hands-free pass. I saw a couple weeks ago, T-Mobile announced a partnership with you to roll out 5G. Is that 5G capability, is that tied to supporting the hands-free pass, or is that to maybe, you know, roll out future capabilities on the technology front?
We are very proud to have a partnership with T-Mobile and, their support and enthusiasm for what we do in creating an experience of a lifetime, and they are very excited to be a part of it. The partnership is not directly related to the innovation that we have created and are launching. Although I know that as partners, they want to find ways to actually support that and the overall guest experience to make it strong next year and in ongoing years.
Very helpful. Thank you very much for taking my questions.
Our next question is from David Katz of Jefferies. Your line is open.
My question. Good morning. Can you just talk for a minute, please, about skier visits? And, you know, in some areas, I think you talked about pressure, but can you talk about areas where it was particularly strong, and in particular the Colorado segment and how those markets are doing in terms of visitation?
Yes. You know, I think, the Rockies or the Colorado resorts, I think we continue to be pleased with the results that we're seeing in that segment and believe that we are set up for a strong spring, meaning the conditions are fantastic. The timing of Easter is actually very conducive to vacations, occurring over spring break. I think we're set up in a good spot. The other place that has been very strong and we're really pleased with is Whistler Blackcomb. We have seen a very strong return of destination visitation to Whistler Blackcomb, incredible momentum, a return of international visitation, and all of the trends and indicators continue to support that we should be set up for a strong rest of season at Whistler Blackcomb.
Understood. Am I permitted one quick follow-up? I just wanted to ask on the cost side, of things.
Mm-hmm.
It's an area we're trying to get our arms around. Are some of the cost increases, it sounds like were unexpected, and we should treat those as really a separate, a separate driver beyond the $175 that we talked about last year at analysts' meeting, right?
Yes. We, as you know, made a very deliberate investment in our employees. We invested $175 million in staffing and wages, and we have not changed that investment. We are fully committed to that investment. We do see other cost impacts, though, directly related to the severe weather disruptions in the East as well as in Tahoe, because the impact of the severe weather when it limits or constrains or impacts our business operations can drive costs up in the form of more snowmaking, more grooming, and the related labor associated with that. That is what I would put into that category of not something we were planning for. We always budget for normal, and I would say the East and Tahoe have been dramatically abnormal.
Understood. Appreciate the insights, and thanks for taking my questions.
Thanks, David.
Our next question is from Brandt Montour of Barclays. Your line is open.
Hey, everybody. Thanks for taking my question. First, another one on skier visits. I'm just trying to get my arms around this, you know, the same store excluding Andermatt of 3.6% growth. I think, you know, on a reported basis, it's up low teens. Is it fair to assume that that's on... How much of that is Andermatt? How should we think about sort of the rest of the season. Since there's a pretty big gap there.
I would say that the biggest drivers of our skier visit number are the momentum that we see with Whistler Blackcomb, the Rockies, the negative impacts on demand that you see from the East and Tahoe, the impacts on closures and resort operations that has constrained demand at those resorts. Vermont has faced some challenging conditions this year. We do not see that as a material impact on the full year visitation for the company.
Okay, great. Thank you for that. The buyback program, you guys upped the buyback program. We noticed that you didn't buy any stock back in this quarter. I guess what kept you out of the market this quarter? Are you thinking of something more programmatic or more opportunistic? Help us think about how you're thinking about buybacks.
Thanks, David. We did get an authorization to increase our share repurchase authorization from the board and, you know, have kind of indicated that we intend to be more aggressive in our share repurchase programs with that authorization. You know, there's no long-term change to our disciplined approach to capital allocation. You know, we always prioritize high return capital projects, investing in our people, strategic acquisitions. This is one part of, you know, returning excess cash to shareholders. We did both the increase in the dividend and the increase in the share authorization. Really shows kind of how, you know, committed we are and how we still believe in the long-term stability of the business and the growth outlook.
Okay. Thanks so much.
Our next question is from Patrick Scholes of Truist. Your line is open.
Hi. Good afternoon, everyone.
Hi, Patrick.
Hi. There's been some negative media attention, both in print and social media about hours for the J-1s in Colorado. I wonder if you can just touch base on that. You know, was that sort of an over-hiring situation? You know, in that regard, you know, do you see less hiring of J-1s going forward, especially in Colorado next year? Thank you.
Thanks, Patrick. J-1s represent less than 10% of our workforce at Vail Resorts, and on average, the hours for J-1 employees are on target. The goal that we have as a company is to always be very disciplined about cost and always be flexing and adjusting. This is normal. We do this every year. It's our responsibility in running the company that we're constantly flexing, adjusting our operations based on demand, based on the business, based on the time of week, and based on the time of year. That's a normal way of how we operate our business. I understand that that may not meet some of the expectations of some of our employees, and we try to support them in helping them address that.
To be clear, we do not guarantee hours, and we always, as operators of ski resorts, adjust and flex based on the needs of the business and the demand.
Okay. Thank you. That's it.
Thanks, Patrick.
Our next question is from Omer Sander of J.P. Morgan.
Hey, Kirsten and Angela, thanks for taking my question. I was hoping you can talk on days where your resorts are open and accessible, can you talk about what you're seeing from a skier visitation standpoint relative to your initial expectations, specifically for the Epic and Epic Local versus some of the day passes?
In terms of utilization of the passes, you know, we don't disclose pass utilization details. What I will say on a macro level is the overall utilization of our passes is up, and we feel great about that. It certainly sets us up well going into the next selling cycle. The most obvious reason why utilization would be up is because we had a very poor early season last year where people did not get out, and weren't able to ski during that early season time period as we had some challenging snow conditions that led all the way up to Christmas. This year, I'm very pleased with what I see on a macro level with our utilization.
Generally, we see that it matters that our pass holders feel like they're getting the use out of the pass, that they're getting out and enjoying the resort. I think that puts us in a great position as we head into our pass sales for next year.
Okay. Thank you.
Our next question is from Ryan Sundby of William Blair.
Hey. Thanks for the question too. I wanted to touch on your comments about dining underperforming expectations somewhat as guest behavior hasn't returned to pre-pandemic levels. Any more color on why you think you're seeing more of a lag there versus some of the other business lines? Is there a geographic or resort specific piece to that? Or is this kind of occurring across all your resorts?
Yeah. You know, our dining is on mountain, right? Predominantly. We spent two years, Ryan, basically, putting in significant restrictions to that on mountain dining for our guests and basically quote, unquote, "training our guests to go find other alternatives." The growth in our dining line of business is incredibly strong versus prior year, but it is lagging getting all the way back to where it was. I think there's just a more work that we need to do to sort of undo the two years of restrictions and sort of training of our guests to find other options and, you know, bring them back into those on mountain dining resorts. I am completely confident that we can actually do that.
It's just that we didn't get all the way back to that consumer behavior in this season. I'm quite confident that we will be able to get back there.
Got it. That makes sense. Then I guess as my follow-up on the $40 million in pass revenue that was pulled forward because of some of the resort closures. Just from a modeling standpoint, are there any costs tied to that revenue? Should we think about that dropping straight to the EBITDA? Does that then fully reverse in Q3 or is it kind of a back half thing?
Thanks, Ryan. Yeah. The movement in the pass revenue from Q2 into Q3 has relates to two things. One that we disclosed in the prior year of the impact from the operating days moving more out of Q2 and into Q3 last year, and then this year, some of the early openings. The combined impact of that is the $40 million that we disclosed. That has some variable costs associated with it, but it's very minor.
Okay, great. Thank you.
Our next question is from Jeffrey Stantial of Stifel.
Hi there. This is Jackson Gibb on for Jeff. Yeah, so I wanted to talk about the dividend raise. To us, it looks like it's a quarter early and a little bit smaller than it has been historically. Are you planning to raise the dividend again on Q3? If not, is there any reason why this raise was a little bit below historical averages?
Yes. This is normally when we would evaluate the quarterly dividend, and so it is actually consistent with when we had historically done it. We had suspended the dividend during COVID, and when we reinstated it, you know, it came in at a partial level, and then the level that we've been at the $1.91 per share, was an 8% increase from where we were prior to COVID. It is consistent with actually what we've have done.
Okay. Understood. Thank you. Then if I could one more on the Epic Pass early bird pricing, it looks like about an 8% increase, like you mentioned in the prepared remarks. It's a bit more than last year's increase and ahead of your pre-COVID pricing patterns season to season. Should we think of this as a passing through of higher inflation? If so, should we expect similar patterns in window ticket pricing? Just wanna get some color on how you're balancing price elasticity with trying to drive more advanced commitment conversion into next season.
Yes. We are always looking at the market dynamics, guest behavior dynamics, also factoring in the investments we make into the guest experience and what our business objectives are that we're trying to achieve in our pricing decisions. We do have, as you know, a lot of data about our guests, their behavior, and price elasticity. When you look back historically, for the past business, you know, years and years back, we have historically always priced slightly ahead of inflation, and that is what you see us doing this year as well. I would say we look at it every single month, and we are constantly assessing what is the right price and what is the right actions to take. This 8% price increase, I would view, is pretty consistent with how we have historically priced our passes.
You know, if you exclude sort of the COVID time periods where there were a lot of unusual actions being taken. Historically, it's pretty consistent with how we've approached it.
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 2023 Q2 earnings call. Thanks to everyone who joined today. Please feel free to contact me or Angela directly should you have any further questions. Thank you for your time this afternoon. Goodbye.
This concludes today's Vail Resorts fiscal Q2 2023 earnings call and webcast. You may disconnect your line at this time. Have a wonderful day.