Season Passes - Impact on Ski Resorts

[Sibhusky]

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.

Yes, I used to complain about the locker prices, but the first year they kept us guessing until was it September?, I realized that my panic about having possibly missed the renewal letter meant I'd pay a lot for that locker. And every time I return midday for dry gloves, different skis, different goggles, whatever, I say, "This is why you're paying for this locker."

 

[New2]

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

• Season pass sales... increased approximately... 23% in sales dollars

• season pass revenue increasing 32.9%

Can one of you MBA types explain to me the difference between these figures?

 

[LKLA]

Can one of you MBA types explain to me the difference between these figures?

The first one - 23% - refers to seasons passes for the 17/18 season.

The second sone - 32.9% - refers to the entire 217 fiscal year (Vail is on a July 31 ending fiscal, not calendar, year).

 

[Monique]

I'm one of those who has a season pass and pays for lesson programs, but brown bags it most days. It's only partly about the money - Breckenridge doesn't publish information that would be helpful to those with dietary restrictions. Sometimes if you ask, you can stand around for one of the cooks to come forward and guess at whether there's flour in something. It's not particularly confidence-inspiring.

But even knowing that I personally can get away with some contamination, that $18 burger or $14 soup (or whatever it is) looks even more pathetic without the bun / roll. And not particularly appetizing or sufficient.

It's honestly flabbergasting to me that my parents' grocery store in rural coastal North Carolina has extensive gluten free options, while Breck can't be bothered to stick a V or GF label on anything.

If I had an option for a yearly locker, I'd strongly consider it. But the price right now is something like $12 for single use of a day locker - are you kidding me? They must have done the math and figured out that enough people *would* use them. I have to think that at half the price, a lot more people would go for it.

 

[DanoT]

Yes, I used to complain about the locker prices, but the first year they kept us guessing until was it September?, I realized that my panic about having possibly missed the renewal letter meant I'd pay a lot for that locker. And every time I return midday for dry gloves, different skis, different goggles, whatever, I say, "This is why you're paying for this locker."

So how much is a locker at Whitefish and do you get to use it year round?

At Sun Peaks I was on a locker waiting list for 7 years before I got mine and the only reason it came available was that they gave up trying to rent them out seasonally to skiers in winter and golfers in summer. Not enough golfers so they changed to year round rental with a big increase in price and some people let their lockers go.

I pay $400CDN/year and the lockers are huge, accommodating 4 pair of skis, 2 pair of boots with tubes of room temp air pumped into each boot, room for shelves and hooks for extra gear.

 

[Sibhusky]

I can get three pairs of skis in easily without a lot of gymnastics. Four is possible, but would be an accident waiting to happen. I don't leave my boots, I want warm boots for one thing, plus several times the pipes above (whether they are for the fire sprinkling system or the kitchen, I don't know) had some kind of problem and water was pouring out of the ceiling. So, hell no, not leaving the boots although many do.

Now I'm going to look up my locker price and cringe again... Oh, right, they don't list them because of the multi-year waiting list (I'm going to have to leave it to someone in my will).. Looking elsewhere... $320 US, so $398 CDN. For just the winter, and sounds like smaller. Maybe eight feet high and 12x16? Wild guess, might be bigger. I wouldn't want it in summer, I'd be looking to lease it out, but doubt there would be takers since there's no pool. The lights aren't even on and most of the doors are locked on that level in summer. That tells me no one is using the lockers.

 

[fatbob]

It all depends. I suspect a lot of Epic pass holders are adept at brown bagging, knowing where to score free parking, stashing a sixer in a snowhole etc. But equally I'd bet there are plenty of weekend warriors who spend like tourists because hey it's the weekend.

Season passes lock both those groups in. Tourists only spend for 3-4 days, a weekend warrior spends every weekend and comes back for the same next year. A local dirtbagger will be the guy buying your cocoa or coffee or bloody mary on a day when the weather is so foul no one else is up the hill.

 

[PTskier]

Vail Resorts sells cheap passes and makes their money on food & beverage sales (it seems to me). I agree with Monique about pricing. I'll see how deep the gouge has gotten at the Whistler on-mountain restaurants with the new ownership. The Whistler season pass gives a food discount. The Epic Pass does not.

All the EU menus I've seen have excellent symbols representing allergen & gluten ingredients in each item. The U.S. could easily do as well if anyone in charge cared.

In the spring at some of the Cascade Mt. resorts on week days it seems like the only skiers are old guys with season passes and bag lunches. I don't think they sell enough day tickets to pay for the electricity for the griddle.

 

[Sibhusky]

Not that it's something I look for, but I seem to remember Gluten Free on a menu at Whitefish's base lodge this summer. At the Summit, there's just a board overhead, so I doubt if it's on that. I wouldn't believe a cook at any of the cafeterias, tho.

 

[Xela]

Back to the question: What's the impact on the resort?

1. Increases visits and ancillary purchases by existing customers, due to season pass discount

2. Scares away future customers, due to high day ticket rates

 

[LKLA]

Back to the question: What's the impact on the resort?

1. Increases visits and ancillary purchases by existing customers, due to season pass discount

2. Scares away future customers, due to high day ticket rates

1 . Are increased visits always a net positive for resorts? If you sell a season pass for $400 and someone skis 50 days, is it really a good deal for the mountain to have someone skiing at an average of $8 a day? Is the mountain going to be able to "offset" that extremely low margin (negative margin) by selling food, lessons, retail goods, lodging, day care,...?

2. Does not sound like a positive for the operators to cannibalize one skier group for another. You want additive or incremental revenue, not one or the other. More so when day ticket prices have a much higher margin and day ticket skiers spend more on other revenue streams.

 

[LKLA]

Vail Resorts sells cheap passes and makes their money on food & beverage sales (it seems to me). I agree with Monique about pricing. I'll see how deep the gouge has gotten at the Whistler on-mountain restaurants with the new ownership. The Whistler season pass gives a food discount. The Epic Pass does not.

All the EU menus I've seen have excellent symbols representing allergen & gluten ingredients in each item. The U.S. could easily do as well if anyone in charge cared.

In the spring at some of the Cascade Mt. resorts on week days it seems like the only skiers are old guys with season passes and bag lunches. I don't think they sell enough day tickets to pay for the electricity for the griddle.

1. Not sure Vail makes their money on F&B like you say they that they do - Seems impossible since dining represents 8-9% of their on mountain revenue. Ticket sales (season and day) on the other hand represent 50-55% of on mountain revenue.

 

[mdf]

I would guess that the real story is that expenses are mostly fixed and the marginal cost per additional skier is relatively small. Under those circumstances, they just have to maximize the ticket revenue (day vs season vs forget-it customers) without factoring in costs. Then whether that season pass holder skis 10 days or 50 days or not at all makes little difference.

 

[Jully]

I would guess that the real story is that expenses are mostly fixed and the marginal cost per additional skier is relatively small. Under those circumstances, they just have to maximize the ticket revenue (day vs season vs forget-it customers) without factoring in costs. Then whether that season pass holder skis 10 days or 50 days or not at all makes little difference.

Agree. I don't think resorts care so much as to what a season pass holder's cost per day is. The lifts run regardless.

The resorts care about getting more people to the resort, because the more people there, the better the chances are that some of them are going to spend money on everything else.

Vail might only get 10% of its revenue from Dining sales, but it gets 50% of its revenue form non-ticket/season pass sources (including dining). The season pass is a method of getting more people to increase that other 50%.

I also think (though have no data to back this up) that for every brown bagger who skis 40 days on their $629 Epic Local pass there is a ski family that only skis 3-5 days and now buys a pass instead of a few tickets here and there.

 

[4ster]

I don't think resorts care so much as to what a season pass holder's cost per day is. The lifts run regardless.

^This
& once they have your money they can open or close the lifts as they please .

 

[LKLA]

Agree. I don't think resorts care so much as to what a season pass holder's cost per day is. The lifts run regardless.

The resorts care about getting more people to the resort, because the more people there, the better the chances are that some of them are going to spend money on everything else.

Vail might only get 10% of its revenue from Dining sales, but it gets 50% of its revenue form non-ticket/season pass sources (including dining). The season pass is a method of getting more people to increase that other 50%.

I also think (though have no data to back this up) that for every brown bagger who skis 40 days on their $629 Epic Local pass there is a ski family that only skis 3-5 days and now buys a pass instead of a few tickets here and there.

Vail gets 55% of its lift ticket sales from season passes. That is very different than 50% of its total revenues!

Of course they care what skiers pay per day. Fixed costs are high, which is exactly why they would care. They have very little wiggle room in what costs they can stop and turn on as needed. They will care even more if they have to make a lot of snow, which costs them even more money and further depresses their margins. They might care even more if temporary working visas are impacted as could be the case and their labor costs go up.

Season pass holders are not the folks who increase the other revenue streams. Data shows very much the opposite. It is the "weekend warrior" or the "one ski vacation a year" skier who largely supports those other revenue streams.

People do not spend money like you imply they do - not that many families buy a $700 pass to ski 3-5 days. I don't know any families (4 people) shelling out +$2,500 without thinking it through very carefully first (the average household income in the US is $55-60,000).

 

[fatbob]

I think we're also missing the force of attraction of season pass holders. Where are they going to drag their paying buddies and extended family to? Not somewhere where they have incremental ticket costs most of the time. I've seen it first hand at Vail ticket office over New Year - college kid thinks he's on a score with a free stay in his bud's family condo, rocks up to ticket office with his pass holding bud, gets quoted buddy pass price. Goes white.

 

[Jully]

Vail gets 55% of its lift ticket sales from season passes. That is very different than 50% of its total revenues!

Season pass holders are not the folks who increase the other revenue streams. Data shows very much the opposite. It is the "weekend warrior" or the "one ski vacation a year" skier who largely supports those other revenue streams.

I was referring to an old pie chart of Vail's revenue streams that listed ticket and pass sales at 50%. Other forms of on mountain revenue were the other 50%. I can't find the image now though, but it was in an article talking about basically horizontal integration. Vail and other resorts that may try to take things from the Vail model want to get people to the resort to spend money on the other things at the resort. To do that they have to get people to the resort first. Cheaper season passes are the most effective at getting people to do that.

The other benefit is that season pass sales are less weather dependent since they are pre-season. You could make the argument that they are just as weather dependent, just dependent on the previous season instead of the previous week's weather, but I think that is still less volatile.

People do not spend money like you imply they do - not that many families buy a $700 pass to ski 3-5 days. I don't know any families (4 people) shelling out +$2,500 without thinking it through very carefully first (the average household income in the US is $55-60,000).

The average family on the Epic pass definitely does not make $55,000. I've met quite a few people (with kids) that buy the Epic pass for a ski week out west. It floors me, but I've met them. The average ski family vacationing out west income and the average US household income are quite different lol (different conversation though).

 

[mdf]

I've met quite a few people (with kids) that buy the Epic pass for a ski week out west. It floors me, but I've met them.

Isn't one week about break even for a pass vs day tickets? And if there is a chance you might add a couple days somewhere else....

 

[x10003q]

Vail gets 55% of its lift ticket sales from season passes. That is very different than 50% of its total revenues!

Of course they care what skiers pay per day. Fixed costs are high, which is exactly why they would care. They have very little wiggle room in what costs they can stop and turn on as needed. They will care even more if they have to make a lot of snow, which costs them even more money and further depresses their margins. They might care even more if temporary working visas are impacted as could be the case and their labor costs go up.

Fixed costs have zero to do with using a season pass 1 time or 100 times.

Season pass holders are not the folks who increase the other revenue streams. Data shows very much the opposite. It is the "weekend warrior" or the "one ski vacation a year" skier who largely supports those other revenue streams.

On the East Coast, most skiers are weekend warriors. There are certainly a large percentage of weekend warriors who are season pass holders. How are you classifying weekend warrior season pass holders? Are they increasing revenue or not increasing revenue?

People do not spend money like you imply they do - not that many families buy a $700 pass to ski 3-5 days. I don't know any families (4 people) shelling out +$2,500 without thinking it through very carefully first (the average household income in the US is $55-60,000).

58% of skiing households have income of $100k or more in 2014-2015. 18% of skiing households have income of $50k or less.
http://www.rrcassociates.com/wp-con...A-National-Demographic-article.compressed.pdf

Season pass holders use local lodging, pay for lockers, parking passes, and season long programs for themselves or their kids.