SAM Magazine—Broomfield, Colo., Oct. 1, 2024—Vail Resorts has unveiled a "resource efficiency transformation plan" that will save $100 million over the next two years, and then $100 million a year after that. The plan is designed to improve organizational effectiveness through a combination of scaled operations, global shared services, and expanded workforce management. The aim is to prepare VR to effectively absorb additional resorts during another phase of growth.

The plan will eliminate some of VR's workforce—overall, less than 2 percent, the company says—including 14 percent of the corporate staff, less than 1 percent of operations staff, and 0.2 percent of frontline staff. Impacts in operations are said to be focused on management structure and back-end support structure. As of July 31, the company employed approximately 7,600 year-round employees and 44,900 seasonal employees.

This plan comes two years after VR raised wages, especially for seasonal and hourly employees, by $175 million a year.

VR said that as it has expanded over the last decade—from 10 owned resorts to 42, across four countries—it has acquired a base of knowledge that affords "a unique opportunity to transform resource efficiency given the scale of its 42 owned and operated mountain resorts, its common enterprise technology ecosystem, and its robust data and analytics capabilities."

The transformation plan includes three pillars: 

Scaled Operations: The company's operations leaders have developed operating best practices "by observing how the ski industry solves the same problems differently across the U.S., Canada, and Australia. The company can leverage those best practices and introduce new tools to scale the way operations are supported across the company. This will enable operations to focus on the guest experience and reduce the administrative burden on frontline managers," the company said.

During the analysts call following the release of VR's Q4 and full-year financial report last week, Lynch noted that "scaled operations really represents the largest part of the transformation plan ... because that's where the majority of our cost structure resides."

Lynch noted that while VR "did capture synergies in our corporate support functions and technology integration" over the past decade, that did not extend to operations before now.

Global Shared Services: The company plans to consolidate and outsource its internal business services (such payroll support, accounts payable and receivable, IT service center) and call centers into best-in-class global shared services and create a structure that can expand to support future global acquisitions. "The same services would be executed and provided," Lynch said. "They would just be executed and provided in a different way that is more scalable for us as we grow."

As for the growth targets? "We are focused on targets within North America that we believe are accretive to our portfolio and we have a very large focus on expanding in Europe," Lynch told the analysts. "And ultimately, ideally, we'd love to expand into Japan as well."

Reports from Switzerland indicate that VR has interest in Flims Laax Falera and Verbier/4 Vallées, which could join Andermatt-Sedrun and Crans-Montana Mountain Resort in Switzerland, which VR has acquired over the past two years.

Expanded Workforce Management: Vail Resorts recently implemented workforce management technology across its North American resorts "to provide frontline managers with the tools and data insights needed to allocate talent based on the guest experience and demand, resulting in more efficient use of hours. The tool also gives frontline team members visibility, access, and cross-training for available shifts in-resort and network-wide," according to VR.

VR is expanding the workforce management system by "leveraging best practice models, adding lines of businesses and departments, and adding new functionality."