Season Passes - Impact on Ski Resorts

[LKLA]

Below are some comments made by Vail Resorts regarding their Epic Pass sales.

Given the "deal" of unlimited skiing for $800-$900, I am wondering how Vail - and others - are impacted by season passes. While operators are likely attracted to the recurring/stable and early receipt of revenue from season passes, they would also seem to be loosing significant margin when compared to single, or even multi-day, ticket sales.

Of course, the season pass and the single/multi-day ticket revenue is just part of the revenue. Food, retail, lessons, lodging, and other revenue streams also play an important - perhaps increasingly important - part of the overall revenue.

• Total skier visits, including a full season of Whistler Blackcomb results, increased 20.1%, while total visitation at U.S. resorts declined 5.4%, primarily as a result of the poor early season conditions in Colorado and the late timing of the Easter holiday.

• Total Effective Ticket Price increased 3.6%, driven by season pass and lift ticket price increases across our resorts and lower visitation per pass.

• Season pass sales through September 24, 2017 for the upcoming 2017-2018 North American ski season increased approximately 17% in units and 23% in sales dollars (includes Whistler Blackcomb and Stowe pass sales in both periods).

• Season pass program continued to drive both growth and stability with season pass revenue increasing 32.9%, including Whistler Blackcomb.

• Continuing to move people to purchase their season pass earlier in the selling period.

• Significant increase in Whistler Blackcomb pass products, in large part due to an earlier price deadline than Whistler Blackcomb has had in the past.

 

[Jilly]

Well the price of a Epic pass vs WB regular pass is showing up. Not sure what Stowe's pass is vs the Epic. But it must in the same area of pricing. It was a substantial decrease for WB.

 

[LKLA]

Well the price of a Epic pass vs WB regular pass is showing up. Not sure what Stowe's pass is vs the Epic. But it must in the same area of pricing. It was a substantial decrease for WB.

I believe the Epic Pass costs about half of what the Stowe single mountain season pass used to cost. Beyond that, the Epic Pass also lowered - impacted - pricing on other east coast multi-mtn passes and single mountain season passes. For example, it would seem challenging for a single mountain with 1/2 the trails of Stowe to charge the same or more for a season pass.

 

[Don in Morrison]

If everyone had to pay walk-up ticket window prices all the time, there would be a lot of folks, me included, who wouldn't be skiing at all. Taking a little less revenue is easier to justify if the alternative is taking none at all.

 

[mdf]

Total Effective Ticket Price increased 3.6%, driven by season pass and lift ticket price increases across our resorts and lower visitation per pass.

I've wondered about that. How many passes get purchased (because of the relatively low up-front cost) by people whose plans to ski more don't work out? Sort of the health-club business model. Your best customers are the ones who never show up.


Hey! I just realized I'm an example of that! I had an A-Basin season pass this past season that I never used, purchased as a cheap upgrade to a 2016 Spring pass.

 

[Philpug]

My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, the walk up window tickets end up being the profit.

 

[LKLA]

My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, the walk up window tickets end up being the profit.

In a nutshell!

The pass covers capital expenses (the basics) while single / multi-day tickets, along with high margin sales from food, lessons, retail..., are the cash cows.

If that is indeed the case, then there must be a % of total revenue ceiling of sorts beyond which operators do not want season passes to climb. Perhaps 20% of revenue coming from season passes is better than 10%, but would you want season passes to represent 40% of total sales, or to represent say 70% of ticket sales?

 

[Dave Marshak]

My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, the beers and cheeseburgers end up being the profit.

FIFY

dm

 

[Philpug]

My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, the beer and EPICburgers end up being the profit.

FIFY

dm

My bad, FYFIFY (Fixed Your FIFY)

 

[Dave Marshak]

How many passes get purchased (because of the relatively low up-front cost) by people whose plans to ski more don't work out? Sort of the health-club business model. Your best customers are the ones who never show up.

When my son worked for one of the big operators, he told that the average season pass was used only 10 days a year.
But it's not the health club model. The passholders are still spending on beer and cheeseburgers and valet parking when they show up. Maybe health clubs could learn from that and start selling beer and cheeseburgers.

dm

 

[Sibhusky]

In a nutshell!

The pass covers capital expenses (the basics) and single / multi-day tickets, along with food, lessons, retail..., are the cash cows.

If that is indeed the case, then there must be a % of total revenue ceiling of sorts beyond which operators do not want season passes to climb. Perhaps 20% of revenue coming from season passes is better than 10%, but would you want season passes to represent 40% of total sales, or to represent say 70% of ticket sales?

Interestingly for here, SKIER VISITS (not revenue) was 364,000 last year, and of that number 157,000 was from passholders. So, if we assume the typical passholders get maybe 18-20 days in (with many of us getting three to five times that, but I know people who pay for a pass yet actually only go three times) it means the passholders pay maybe $20-40 (after all there's kid passes and junior passes and senior passes, so I'm just winging it) for a day, but those non-passholders are paying $60-73 per day. So, double or triple. And the majority of skier visits now are day tickets, even though 60% (the majority) of SKIERS are local. A pretty attractive reason to cater to day ticket holders.

 

[4ster]

Dave Marshak said: ↑

Philpug said: ↑
My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, $900 PRIVATE LESSONS the beer and EPICburgers end up being the profit.
FIFY

dm
My bad, FYFIFY (Fixed Your FIFY)

FYFIFY again

 

[Sibhusky]

$900???? God, I'm living in Nirvana.

 

[Dave Marshak]

Dave Marshak said: ↑

Philpug said: ↑
My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, $900 PRIVATE LESSONS the beer and EPICburgers and VALET PARKING end up being the profit.
FIFY

dm
My bad, FYFIFY (Fixed Your FIFY)

FYFIFY again

I see your FYFIFY and raise you a FIFY.

dm

 

[mdf]

Dave Marshak said: ↑

Philpug said: ↑
My ultra simplistic view, (discounted) season passes, are to cover the operating costs for the ski area, $900 PRIVATE LESSONS the beer and EPICburgers and VALET PARKING end up being the profit.
FIFY

dm
My bad, FYFIFY (Fixed Your FIFY)

FYFIFY againI see your FYFIFY and raise you a FIFY.

dm

Maybe they should try just giving away the passes....

 

[LKLA]

When my son worked for one of the big operators, he told that the average season pass was used only 10 days a year.
But it's not the health club model. The passholders are still spending on beer and cheeseburgers and valet parking when they show up. Maybe health clubs could learn from that and start selling beer and cheeseburgers.

dm

That makes sense - that the average season pass holder visits around 10 days. I don't think it is much higher than that (I will get stats to confirm).

But in the end does that really matter? Meaning, once the season pass is sold and the operator gets the money, what significant difference does it make if the pass holder shows up or not? What really matters is in their ability, or lack of ability, to spend money on the other revenues streams, often high margin revenue streams, such as food and beverage, lessons and ski school, retail purchases, lodging, ski rentals,.... or even real estate purchases.

Season pass holders do not seem to be as active in those other revenue streams. The % of skiers I know with season passes who bring their own lunch or who never/rarely take lessons or who shop for gear via online or off-season bargains is much, much higher than non-season pass holders. It seems that for every non-season pass holder I speak to who pays for lodging that there are multiple season pass holders I meet who do not.

 

[graham418]

That makes sense - that the average season pass holder visits around 10 days. I don't think it is much higher than that (I will get stats to confirm).

That makes sense.. I read that the average skier goes 2.2 times per season, making all of us who do it as much as we do are the outliers, the 1%ers.
So I don't think the resorts lose out. Seasons pass holders help create a stable income base, and the day pass buyers are the gravy.

 

[Dave Marshak]

Season pass holders do not seem to be as active in those other revenue streams. The % of skiers I know with season passes who bring their own lunch or who never/rarely take lessons or who shop for gear via online or off-season bargains is much, much higher than non-season pass holders. It seems that for every non-season pass holder I speak to who pays for lodging that there are multiple season pass holders I meet who do not.

I don't know about that. At the ski area where I worked, there were some passholders who conspicuously brought their own lunches, but they also had their kids in the programs. There were also a lot of passholders who owned property on the mountain, and were members of one or more of the spendy clubs the mountain sponsored. You never saw them in the cafeteria, but they were spending more on the mountain than the day trippers, or anyone else for that matter.

dm

 

[Sibhusky]

They get the season pass money out of me and the locker, that's it. In fourteen seasons here, I've been in three lesson programs. Each time I swore I wouldn't do it again. (If I break that resolution, it'll be a private lesson.). I pack a lunch. I do have a few friends who shell out for a nice hot lunch everyday, I keep wondering if they've added it up.

 

[epicentre]

Season pass holders do not seem to be as active in those other revenue streams. The % of skiers I know with season passes who bring their own lunch or who never/rarely take lessons or who shop for gear via online or off-season bargains is much, much higher than non-season pass holders. It seems that for every non-season pass holder I speak to who pays for lodging that there are multiple season pass holders I meet who do not.

Pocket PB&J; Powerbars, and even my own Thermos of Coffee everyday. Ain't no one can afford a $2.50 coffee! They did eventually get me with a locker, but having one is so nice I just consider it part of the season pass price now.