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Good day, everyone, and welcome to the Vail Resorts Second Quarter Fiscal 2018 Earnings Call. Today's call is being recorded. At this time, I would like to turn the call over to Rob Katz, Chief Executive Officer. Please go ahead.
Thank you. Good morning, everyone. Welcome to our fiscal second quarter 2018 earnings conference call. Joining me on the call this morning is Michael Barkin, our 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 risk and uncertainties as described in our SEC filings and actual results -- actual future results may vary materially. Forward-looking statements in our press release issued this morning along with our remarks on the call are made as of today, March 8, 2018, and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non-GAAP financial measures. Reconciliations of those measures are provided in the tables included with our press release, which along with our quarterly report on Form 10-Q, which we filed -- were filed this morning with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com. So with that said, let's turn to our second quarter fiscal 2018 results. Given the historically low snowfall across the Western U.S. this winter, we are pleased with our results for the quarter, which demonstrate the resiliency of our strategic business model, the network of resorts and loyal guests we have developed. Compared to the prior year, total lift revenue increased 6.6% despite visitation being down 3.1%, primarily as a result of strong pass sales for the 2017-2018 North American ski season. We continue to see good destination guest visitation and spending trends, with total ski school revenue up 2.6% compared to the prior year period. Total effective ticket price increased 10% in the second quarter compared to the prior year due to price increases in both our lift ticket and season pass products as well as lower visitation by season pass holders. Dining and retail rental revenue declined 0.8% and 6.3%, respectively, compared to the prior year.
Through January 31, conditions across the Western U.S. remained challenging, with season-to-date snowfall in Vail, Beaver Creek and Park City at the lowest levels recorded in over 30 years, while Tahoe was more than 50% below the 20-year average. While open terrain in Colorado began to improve toward the end of the quarter, it remained very low in both Utah and Tahoe. Despite these difficult conditions, our results were generally in line with our performance last year, which we believe reinforces the stability of our business model that is focused on advance purchase products led by our season pass, destination guest-focused marketing strategies and our geographically diverse resort network. This year, we are benefiting from the strength of Whistler Blackcomb, which, through the second quarter fiscal 2018, achieved record visitation from its global customer base, including strong results from U.S. and other international guests from Mexico, Australia and the U.K. Results from Stowe have also been positive despite some very cold temperatures over the important holiday period, and we expect that Stowe will perform in line with our initial expectations for fiscal 2018. Now I would like to turn the call over to Michael to further discuss our financial results and our season-to-date metrics.
Thanks, Rob, and good morning, everyone. Before discussing our results and fiscal 2018 guidance, I want to remind you that you can find a more complete discussion of our financial results for our second quarter and fiscal 2018 ended January 31, 2018, in our quarterly report on Form 10-Q, which was filed this morning with the SEC. Our Form 10-Q and our earnings announcement can be found on our website at www.vailresorts.com. As Rob mentioned, we are pleased with our second quarter performance and the stability of our results in the face of historically challenging conditions across our Western U.S. resorts. Resort net revenue was $734.4 million, an increase of 2% compared to the prior year. Resort reported EBITDA was $308.9 million, an increase of 1.2% compared to the prior year. Mountain revenue was $670.9 million, up 2.6% from the prior year, while Mountain reported EBITDA was $305.3 million for the second quarter, up 2.1% from the prior year. Our lodging results for the second fiscal quarter were also impacted by the adverse conditions at our Colorado resorts. Revenue, excluding payroll cost reimbursements decreased 3.4% compared to the prior year, primarily due to a decline in the average daily rate at our Colorado properties as well as lower operating results from Colorado Mountain Express resulting from the challenging conditions and modest visitation declines. Net income attributable to Vail Resorts Inc. was $235.7 million for the second quarter of fiscal 2018 or $5.67 per diluted share as compared to net income of $149.2 million or $3.63 per diluted share for the same period in the prior year. Fiscal 2018 second quarter net income included a onetime net tax benefit of approximately $64.6 million or $1.55 per diluted share related to the recently enacted U.S. Tax Cuts and Jobs Act. Our balance sheet remains very strong. We ended the fiscal quarter with $235.5 million of cash on hand and our net debt was 1.7x trailing 12 months total reported EBITDA. Turning now to our season-to-date metrics for the period from the beginning of the ski season through March 4, 2018, compared to the prior year period through March 5, 2017. The reported ski season metrics are for our North American resorts adjusted as if Stowe was owned in both periods and also adjusted to eliminate the impact of foreign currency by applying current period exchange rates to the prior period for Whistler Blackcomb's results. The metrics exclude results from Perisher and our urban ski areas in both periods. The data is interim period data and is subject to fiscal quarter end review and adjustments. Our metrics have improved since our last update in January, with the improving conditions especially in Colorado. Season-to-date total lift revenue at the company's North American resorts including an allocated portion of season pass revenue for each applicable period was up 1.6% compared to the prior year season-to-date period. Our ski school revenue declined by 0.6%; dining revenue declined 4.2%; and resort retail rental revenue declined by 7.4%, all compared to the prior year season-to-date period. While total visitation was down 4.9% compared to the prior year season-to-date period, visitation improved in late January and throughout February, with the better conditions and increased terrain. Conditions did not improve as quickly as we would've liked when we issued our January metrics release. However, we have experienced much better conditions in Colorado in February, have seen a strong improvement in conditions in Utah in the last 2 weeks and just in the last week, I've seen dramatically improved skiing in Tahoe after the last storm cycle. This is creating significantly better conditions for spring skiing across our network.
Given our performance to date, the delayed improvement in conditions and assuming conditions in terrain availability remain relatively consistent with the current status through the remainder of the ski season, we now expect resort reported EBITDA for fiscal 2018 to be between $607 million and $627 million, which is predicated on current Canadian and Australian foreign exchange rates. Regarding the recently enacted U.S. Tax Cuts and Jobs Act, we expect the legislation to significantly reduce our effective tax rate in cash tax payments. We expect cash tax savings related to the act will total approximately $40 million for calendar 2018. The cash tax savings are primarily derived from the reduction in the federal statutory rate from 35% to 21% and the accelerated deductibility of capital expenditures. From a book tax perspective in the second quarter, we are also benefiting from the remeasurement of our deferred tax liabilities at the new statutory rate, which is creating a $71 million benefit to book income tax provision in the quarter. This remeasurement is a noncash and onetime impact. We plan to utilize the cash tax savings by reinvesting in our business, including employee wage increases and capital investment at our resorts as well as by increasing our return of capital to shareholders. I'll now turn the call back over to Rob.
Thanks, Michael. Given the performance of our business despite the difficult conditions this year, we are increasingly confident in the strong cash flow generation and stability of our business model. We will continue to be disciplined stewards of our capital and are committed to strategic high return capital projects, continuous investment in our people and returning capital to our shareholders through our quarterly dividend and share repurchase programs. We are pleased to announce the Board of Directors has approved a 40% increase to our quarterly dividend and declared a quarterly cash dividend on Vail Resorts common stock of $1.47 per share, payable on April 11, 2018, to stockholders of record on March 27, 2018. Moving to our calendar year 2018 capital plan, we expect to invest approximately $100 million in capital during calendar year 2018, excluding anticipated investments for U.S. summer-related activities, onetime integration-related capital expenditures and capital investments associated with third-party reimbursements. The plan includes approximately $80 million of maintenance capital expenditures and several high-impact discretionary investments. As previously announced, the plan includes the discretionary investment of approximately $40 million or CAD 52 million at Whistler Blackcomb as part of an approximate $50 million or CAD 65 million total capital plan at the resort. This represents the largest annual capital investment in the resort's history. We believe this plan will dramatically improve the on-mountain experience for our guests, with enhanced lift capacity, improved circulation and a significantly elevated experience for skiers, riders and sightseeing guests. The centerpiece of this investment will be a new gondola, running from the base to the top of Blackcomb Mountain, replacing the Wizard and Solar 4-person chairs, with a single state-of-the-art gondola, providing an experience protected from the elements and expect a 47% increase in uphill capacity and a mid-station to allow guests to access and circulate around Blackcomb Mountain. We also plan to upgrade the 4-person Emerald express chairlift to a high-speed 6-person chairlift, providing increased capacity and reduce lift line wait times for important beginner and intermediate terrain on Whistler Mountain. Finally, we expect to upgrade the 3-person fixed grip Catskinner chairlift to a 4-person high-speed lift, with improved lift alignment to provide increased capacity, better access and improved circulation to critical teaching terrain and terrain parks at the top of Blackcomb Mountain. Together, these investments are expected to result in an approximate 43% increase in lift capacity, relative to the existing lifts that will be replaced. At Park City, we will continue our transformational investments, with the focus on enhancing the family, food and service experience for our guests from around the world. In the Canyons area of Park City, we plan to upgrade the fixed grip High Meadow chair to a 4-person high-speed lift, improved grading and expand snowmaking to create a world-class beginner and family learning zone. This will be complemented by snowmaking investments to improve access for beginner and intermediate skiers traveling from the Quicksilver Gondola to the Canyons base area.
We also plan to make 2 significant investments in the dining experience at Park City. We will expand Cloud Dine, a unique modern mountain dining experience overlooking the resort, with 200 additional seats and we'll be renovating and upgrading the Park City Mid-Mountain Lodge, to create a signature dining experience that will bring fine-dine quality cuisine to what we expect will be one of the premier, fast casual, on-mountain restaurants in the industry.
Each of these projects reinforces our commitment to Park City's position as the best resort for families and culinary experiences, and continues to build on the significant improvements we've made at Park City over the last 4 years, including the Quicksilver Gondola, the new Miner's Camp restaurant, the expanded and upgraded Red Pine Lodge and the renovated Summit House restaurant. At Heavenly, we plan to replace the Galaxy 2-person chairlift with a 3-person chairlift to increase capacity and allow us to reopen 400 acres of high-quality intermediate terrain. At Perisher, we plan to upgrade the Leichhardt T-bar to a 4-person chairlift and a significant upgrade to snowmaking, enabling better beginner access and a reduction of crowding and wait times as well as the addition of new terrain. At Vail, we will begin a multiyear investment plan in the resort's snowmaking system to open more terrain earlier in the season. The capital plan also includes approximately $2 million in investments to improve our energy efficiency as part of our Epic Promise initiative to achieve a 0 net operating footprint by 2030.
Note that all of our resort projects are subject to regulatory approval. We also plan to continue to invest and enhance enterprise-wide technology improvements that support our increased scale, improve the guest experience and continue to build our database marketing efforts. In particular, we are investing in a complete overhaul of our resort point-of-sale transactional system that will reduce transaction times and improve the guest experience. We are also continuing to invest in our data-driven marketing technology by significantly enhancing our automation capabilities to more efficiently reach our guests through multiple digital channels, and we'll be investing in other innovative service-oriented technology products -- projects. We plan to invest approximately $8 million in calendar year 2018 related to the integration of Stowe with our guest-facing technology and backend systems and the completion of the Whistler Blackcomb integration. We also plan to invest approximately $3 million in calendar year 2018 for Epic Discovery summer activities, including the completion of a new zip line at Breckenridge and bike trail expansions at Vail. We were also planning to spend approximately $6 million during calendar year 2018 on capital projects to repair infrastructure that was damaged due to snowfall, including the Heavenly coaster and the Ten Mile Room in Breckenridge. We expect that repair costs will be covered by insurance proceeds. Earlier this week, we launched season pass sales for the 2018-2019 season, which marks the 10th anniversary of the Epic Pass. The introduction of the pass in 2008 changed the landscapes of the snow sports industry, making skiing and snowboarding more accessible than it had ever been before. Prior to the Epic Pass, most passes across the industry were dramatically more expensive and provided access to only a single resort. The industry-leading Epic Pass provides unlimited, unrestricted skiing and snowboarding across this company's network of truly iconic mountain resort destinations. The 2018-2019 season pass lineup includes several important additions to enhance the value of the passes to our guests. The Epic Local Pass will now offer unlimited skiing at Stowe, which will provide more options for our guests in the Northeast. The Epic Pass will include 7 days of skiing or snowboarding at the world-renowned Telluride Ski Resort, with no blackout date. Telluride is an iconic destination resort that will expand the offering to Epic Pass holders, who value the variety of outstanding resorts that the Epic Pass offers. Earlier this week, we announced that the Epic Pass Lineup will include 7 days of access to the resorts of the Canadian Rockies, including Kicking Horse and Fernie, complementing Whistler Blackcomb with 6 additional Canadian resorts. Additionally, the 2018-2019 Epic Pass, Epic Local Pass and Epic Australia Pass will include 5 consecutive days of skiing or snowboarding in Hakuba Valley's 9 ski resorts in Japan, with no blackout dates. This long-term partnership with Hakuba Valley has been very well received by our Australian guests who are enthusiastic about the opportunity to ski in Australia, North America and now Japan, on their Epic Australia Pass. With access to 61 mountain resorts in 8 countries, the Epic Pass offers unparalleled access to skiers and snowboarders. The Epic Pass and Epic Local Pass are on sale now for $899 and $669, respectively, and include additional benefits for those who purchase early. To mark the 10th anniversary of the Epic Pass and to pay homage to Vail's founders, the company announced a new Military Epic Pass available to active U.S. Canadian and Australian armed force members, veterans and their dependents. Additionally, Vail Resorts will donate $1 from every 2018-2019 season pass sale to Wounded Warrior Project to benefit wounded veterans and their families. Finally, earlier this week, we informed our employees that we would be increasing our company's minimum wage for next season, from $11 to $12.25 in Colorado, Utah and California and from CAD 11.35 to CAD 13 at Whistler, with commensurate increases in our other locations. We will also be making additional targeted compensation adjustments across our employee base and continue to invest in additional affordable housing to ensure that we can provide an experience of a lifetime to everyone who works at Vail Resorts. These investments will represent a material portion of the savings the company will derive from the new tax law. Our employees are vital to delivering exceptional guest experiences at our resorts and this investment in wages to support our employees is critical during a period of low unemployment and rising cost of living. I would like to thank all of the Vail Resorts employees for their passion and dedication to consistently delivering an experience of a lifetime to each other and to our guests. At this time, Michael and I will be happy to answer your questions. Operator, we are now ready for questions.
[Operator Instructions] We'll take our first question from Shaun Kelley with Bank of America.
Rob, maybe to start, obviously, during the quarter and very recently, there have been a couple of announcements about a sort of a new pretty comprehensive competitive offering in ski season pass landscape. I'm wondering if -- can you comment on just sort of your initial impressions of that offering and specifically your thoughts on what the impact may or may not be to Vail Resorts? That'll be helpful?
Yes, I guess what I'd say is as we've said many times, we genuinely really welcome competition in the industry because we think that's better for skiers and riders. And I think even after everything we've seen, I think we still feel that the Epic Pass at $899 is really the only pass that delivers unlimited, unrestricted access at an amazing value, with a pretty clear message for guests. And that the Epic Local provides an even better value at $669, with just a few pretty simple restrictions. So the Epic Pass includes, like, 5 of the top most popular resorts in North America, with many more in the top 15, all of which we own and operate. So that drives real value to our guests from the pass. And so I think nothing has changed, I think in our perspective, about our position on those products, certainly over the entire selling season. And I think one of the other thing that we've noted is we've obviously driven a lot of growth over the last number of years in our spring pass selling period and one of the ways we've done that is by offering people that they only have to put $49 down now, and I think then buy the rest of the pass in the fall and that kind of respects their commitment and also the fact that obviously, skiing's not going to happen for a while. And it's not clear that others have done that same approach, which I think makes it potentially, in comparison to our pass, is a little more challenging. So I think in the end, when we look at, I think, what they're putting out there, I think we feel like it's good that people have a lot of choices. But no, I don't think this, in any way, changes kind of our own trajectory and how we think we can deliver on our own kind of strategic objectives. The key is for -- yes, we need to deliver on it. That's -- and as long as we do what we need to do, I think we stay on track.
Maybe to just dig a little deeper on it, I think the key concern we've heard from a number of investors is around the destination pass piece right? So that's been a disproportionate amount of your growth over the last couple of years. You clearly highlighted what you've been able to do with some of the network effect in your own business. Is there anything there that gives you either comfort or kind of on the competitive side, gives you kind of some strength that you think is particularly appealing to that destination customer? Because we know there's real positive mix as it relates to what destination customers tend to pay for their pass products.
Yes, I think what's important to highlight is that we have been competing for quite some time with other products like the Mountain Collective over the M.A.X. Pass or the Rocky Mountain SuperPass. And in some ways, right, I think -- and I understand that I think that those products have been successful and well received by, I think, many skiers and riders at the same time that we've been very successful with our pass. I think in some ways, there's just a shifting on kind of who we're competing with and no doubt, there will be many skiers and riders that find any of our competitive products attractive. But again, we've kind of come back to the strength of our resorts, the simplicity of our pass, the -- all of the database marketing efforts that we have in terms of -- which, I would say, may be more than anything, is how we've driven so much of the growth over the last number of years. And some of the new things we've added this year, right? New resorts, new offerings. Yes, I think -- I guess what I'd say is, our resorts have been competing with other resorts and other pass products for a long time. And it's good. It's good for the industry. And yes, does not shift our view in terms of what we can accomplish.
Great. One last one, just on the -- kind of on the overall financials. You mentioned that, obviously, the tax reform piece has been a significant windfall and your plan is to reinvest some of that, or it sounds like a significant portion of that. Just kind of from a directional perspective, any color you can give us on how much of that is -- should we expect or think of as a kind of a headwind on either the G&A or expense line item as we move into the 2000 -- kind of into the fiscal 2019 season? Should we really think of that as being close to a $40 million type number? Or is it spread out over a couple of years? Just some guidepost of how you're thinking about it.
Yes, I think, certainly, the tax piece is a real benefit to us. I think as Rob mentioned in his remarks, we're certainly, as we have been, continuing to invest on the employee wage side as we've done in the past. As it relates to the G&A or kind of the underlying overhead structure, that would be very modest, related to this.
We'll go next to Anthony Powell from Barclays.
Can you talk about how you approach pricing for the Epic Pass this year after the tough start to the snow season? And we know it's early, but have you seen or do you expect any change in the willingness to renew, given some of those challenges earlier on this year?
I think obviously, we take a lot of things into account in terms of how we price and I think it tends to be more about the value that we feel we can deliver to guests. And in many ways, I think we have been more modest with our price increases around many of our passes because we want to broaden their appeal. And I think that's a philosophy that I think we've had for the last 10 years and I think we're going to continue with. In terms of renewal, I think guests and passholders, skiers and riders, I think understand that there are some better seasons and some more challenging seasons, some better parts of the season and some more challenging parts of the season. And I think the loyalty that they have, because of the value that our pass provides, we've seen real strength in that, even when we've had more difficult seasons. I think the good news right now is that we've got -- we are shaping up to have a good finish to the season in March, which I think will provide a great experience to skiers and riders across every single one of our regions. And so I think that certainly will go a long way. But even in years, like some of the tougher years in Tahoe, we talked about actually we saw some real resiliency in that passholder base because I think this is more of a long-term loyalty commitment that's around kind of the value that it provides to people.
And you've signed 2 long-term alliances recently with Telluride and Hakuba Valley. Can you talk about the length of these alliances? The [ eventual ] terms and why do these relative to an acquisition?
Well, I think -- so two things, we're not disclosing the terms of those deals. But so why this versus others? I think there are going to be resorts who are not interested in necessarily having a discussion about an acquisition for a whole host of reasons. And that's something that we very much respect. We think it's critical for our success and for our -- when you look back over the last 10 years, for our historical success, to know that you own and operate, right, the core part of your season pass program and all of those resorts because of the alignment, the agility, the flexibility, all the different pieces, the ability to use the full complement of data that you have that's critical if you're trying to build a program, I think, like we have. But I still think, given the size and scope of our -- the network of resorts and the kind of way that they're located and the power of it, I think adding, right, some very unique special partners to really kind of augment, right, some of the slices of our database, I think is terrific. And so in our mind, this was a way for us to really bring some folks on who just have outstanding resorts with amazing cachet and that are not duplicative with the exact same resorts that we have, which was also kind of important. So I'd say -- the one thing I would say is we take the same very thoughtful, methodical, disciplined approach to these partnerships, one by one, making sure that it's something that really will move the needle.
We'll go next to the Chris Woronka with Deutsche Bank.
I want to ask on Stowe, as you begin to kind of analyze the -- your customer flow there, are you seeing kind of what you expected yet in terms of kind of cross [ pollenization ] with your Western resorts?
Yes, I think what we've seen and I think we talked about it in prior calls, that we do think Stowe provided a nice boost in some of the Northeast markets that we were in, which is what we are hoping obviously to get from it. We think, obviously, a number of people who came on to our path obviously were looking for that dual benefit of both Stowe and obviously the Western resorts. We don't have any kind of final analysis on exactly what -- how many people went to both resorts, but we'll be looking at that when the season is over and see how that ultimately shaped up. I will say, what we see though is the ability to go to multiple resorts often is more important than whether people actually go to multiple resorts. And we see that even within our networks in Colorado, Utah, Tahoe. So we probably -- I think there'll be a piece of that, that's going to be important there. But I'm sure we'll see good crossover. I mean, I think one thing I can certainly say is that certainly with Whistler Blackcomb, we've seen obviously a big increase in U.S. visitation to Whistler Blackcomb. We've seen a big increase in Epic Pass usage to Whistler Blackcomb. So I think that has been a pretty strong example, I think, of the power of the Epic Pass if you've got kind of the key destination resorts that people want to visit.
Great. And then just on kind of turning to ancillary sales for a second. It looks like in some of the categories, you still had pretty good growth on a per skier visit basis. Can you talk a little bit about what's driving that? And can that continue in the current environment?
Yes, I mean, I think we were pleased with the results across the ancillary lines of business as we saw with visitation. Certainly, challenges relative to the weather conditions, but one of the key pieces of our business model is that we really do provide a full vacation experience for destination guests. And somewhat regardless of the weather, we've got strong destination visitation and that tends to result in a correlation to spending. And so I think we saw that continue, despite the weather challenges this year.
We'll go next to Tyler Batory with Janney Capital Markets.
So I wanted to ask little bit more about the metrics that you've given through March, are you able to parse out little bit more what you're seeing specifically in each region. I'm also curious what you saw at Whistler, specifically in February and into March there.
Yes, I think like we talked about in the release this morning, I think we saw that certainly with the improving conditions in Colorado, you saw some improvement in our metrics from the January release to this release, certainly, still some challenges that we talked about in Utah and Tahoe in particular. I think we've seen a continuation of the strong performance at Whistler Blackcomb as a result of multiple factors. One, certainly from the beginning of the season on Whistler Blackcomb has had really good conditions throughout the year. I think we continue to see the momentum of the resort in terms of its brand and the experience that the resort provides to guests. And then as Rob just mentioned, certainly, strength in being able to drive our Epic Pass visitors to that resort in part because they now have the choice as to where they want to ski based on the type of experience, the type of conditions and I think that certainly benefited our results at Whistler Blackcomb this year.
Okay, great. That's helpful. And then just follow up on the season pass questions here. Are you guys able to make any broad comments generally on penetration rates, maybe for season pass or maybe for the Epic Pass specifically? And then I'm also wondering if, potentially, you could talk about sales or penetration rates in specific markets? I don't know if you're -- I'm assuming you're more sales on the West Coast than Northeast. But I just wonder if there's any general color you could share on that front.
I guess what I'd say is yes, we don't really discuss specific penetration rates and I think our pass program is pretty broad. We're around the U.S, around the world, in terms of kind of where our strength is. Most metropolitan areas on the U.S, I'd say probably a little less in L.A. over the years. But apart from that market, we have a pretty strong connection to a lot of -- especially now with Whistler, I think pretty good connection, I think, to a lot of different places. Obviously, we now have stronger connections obviously in Australia and Latin America. Again, less so in Europe because -- in Central Europe, but pretty good connections now in the U.K. as well, especially with the North America plus Whistler combination. So it's a pretty broad -- our program, we sell passes in all 50 states, and in 100, plus or minus, countries. And so it's a pretty broad program, which I think also helps in terms of the stability of the growth over time because we're not dependent on any one market.
We'll go next to Brett Andress with KeyBanc Capital Markets.
Can you talk about the trends you saw in the quarter in international visitation to your resorts? It seems like Whistler was very successful at driving those guests. But did you see any particular strength in any of the other resorts? And I guess, as you look into this year's pass selling season, what countries do you have the most confidence in that you'll see growth or do you think it could be more broad-based this year?
Yes. I would say I think the international trends have largely been consistent with the last couple of years, which is real strength in Whistler and just from almost all markets and I think more of a struggle in the U.S. because of the strong U.S. dollar. And I think that kind of continued through this year, then obviously, in a number of our U.S. resorts they had challenging conditions early in the season. So I think that was another, I think, headwind for them. I think as we look out on pass sales, no, we have been growing pretty consistently over time and we would absolutely assume that, that will continue. Certainly, Australia with the addition of Hakuba, I think gives us, yes, just a terrific tailwind, candidly, in that market, just the enthusiasm we've already seen and the ability to connect Japan, Whistler and the U.S. resorts with Australia is a pretty powerful combination. But I think the fact that we've broadened the portfolio every year helps. And then the bigger, more important driver comes back to our more targeted database-driven marketing, right? And the history that we have on our guests and their behavior and the fact that we've been collecting data, not just on season pass skiers but on lift ticket buyers now for a few years, that really gives us a boost as we go out to find new prospects for people to join the pass.
Got it. And kind of a follow-up on that, and I know it's very early and pass sales started 2 days ago, but are there any kind of anecdotes you can share with us on demand this year, whether it's strong 1-day sales, Internet traffic? Or as you're talking about before, any insight you'd be able to capture from that CRM system? But then also following up on that, I guess can you give us some detail on how your renewal rates have trended over the last few years? And are you expecting any kind of weather pressure on the renewables this year given what we've seen?
So on the first question, no, we're not going to comment on yesterday's results. But I would say so before passes went on sale, I think, yes, we were very pleased with the enthusiastic response, very positive response that we've received to each of these announcements that we've made. We've seen a lot of -- yes, just so many skiers and riders that were thrilled to see Telluride on the pass, so many that were thrilled to see RCR in the pass, obviously, Hakuba really had a tremendous amount of enthusiasm. And I think, our Military Epic Pass, we've seen tremendous positive response, obviously from folks in the military and their families. But also from folks not in the military, just appreciating the connection that we're trying to make to the Armed Forces and making the mountains more accessible. So certainly, I think in the pre -- we're not going to comment on results at this point, but certainly before getting into results, I think, there was a lot of, yes, very upbeat mood, I think, by our passholders and by the broader community about what we were doing. I think yes, we're not -- I'm not going to comment on renewal rates. And I would say, no, I think in the -- we do not believe that the softer start to the season will ultimately have any kind of material effect on our results for the season pass selling season. Of course, that said, we've just begun. So we don't really have any insight and we'll be sharing those insights once we get to June.
And with no further questions on the queue, I would like to turn the call back over to Rob Katz for any additional or closing remarks.
Thank you, operator. This concludes our fiscal second quarter 2018 earnings call. Thanks to everyone who joined us on the conference call today. Please feel free to contact me or Michael directly, should you have any further questions. Thank you for your time this morning, and goodbye.
And this does concludes today's conference. We thank you for your participation. You may now disconnect.