Tipping

[Ken_R]

At VR calculating the pay rate requires an Excel spreadsheet, a monkey with a ouija board, and a tide table.

Yeah but its easy to see how much VR charges their customers... a LOT.

I would love to know how much an instructor gets paid vs how much one pays for the lesson.

 

[Josh Matta]

I for one would love a freer market in ski teaching. but damn democrats and republicans like corporatism more than they like competition.

If concession ski schools were a thing it would be far better for the consumers and the ski teacher, and heck it might even cause skier growth instead of skier decline which leads to more price gouging.

 

[Eric267]

what cert level is your neighbor?

2 I think. He's been there 6 years at least. Makes a lot of seasonal tips doing the winter long kids programs on weekends.

 

[Blue Streak]

Yeah but its easy to see how much VR charges their customers... a LOT.

I would love to know how much an instructor gets paid vs how much one pays for the lesson.

You are right.
But my guess is that the percentage runs from about 12% to 20%, not including tips.

 

[Kneale Brownson]

Ski school revenue supports ski patrol, safety, snowmaking, grooming, guest services and all the ancillary administrative activities.

 

[Ken_R]

Ski school revenue supports ski patrol, safety, snowmaking, grooming, guest services and all the ancillary administrative activities.

I though that is what the Lift Ticket revenue is for. Also Food and Beverage pulls in a lot of money. In the case of Vail you have hotel operations, property managing, retail sales among other businesses as revenue generators for VRi.

 

[Kneale Brownson]

lift ticket revenue supports multi-million dollar high-speed lifts and their maintenance/operation. Every revenue-producing activity of a resort supports not only itself but many aspects that are not self-supporting. You can stay at the cheap motel down the road or you can pay for valet equipment service and stay slopeside.

 

[Monique]

I though that is what the Lift Ticket revenue is for. Also Food and Beverage pulls in a lot of money. In the case of Vail you have hotel operations, property managing, retail sales among other businesses as revenue generators for VRi.

lift ticket revenue supports multi-million dollar high-speed lifts and their maintenance/operation. Every revenue-producing activity of a resort supports not only itself but many aspects that are not self-supporting. You can stay at the cheap motel down the road or you can pay for valet equipment service and stay slopeside.

Taken together, the implication is that if ski school weren't so expensive, lift tickets/season passes would have to get more expensive to compensate.

 

[LKLA]

Taken together, the implication is that if ski school weren't so expensive, lift tickets/season passes would have to get more expensive to compensate.

The FACT is that in order for mountains to be able to offer season passes that break-even at 5-7 days vs window prices and still be profitable, they are going to depend on either 1) A huge increase in skiers, which Vail Resorts has benefited from a huge increase in skier visits by offering the Epic pass, or 2) Skiers spending money on food, drinks, lessons, rentals, lodging, retail, spa services, hosting parties or events, which Vail Resorts has also been able to achieve).

A mountain can surely look forward to people buying a season pass and never using it or using it just one or two days, but that is not how you run a business (to say the least). It's just not logical/reasonable/realistic that people with enough brain cells to get off a chairlift will continue to buy a season pass if they don't use it (maybe they do it one season, maybe two...maybe it happens once every ten seasons).

 

[Monique]

A mountain can surely look forward to people buying a season pass and never using it or using it just one or two days, but that is not how you run a business (to say the least). It's just not logical/reasonable/realistic that people with enough brain cells to get off a chairlift will continue to buy a season pass if they don't use it (maybe they do it one season, maybe two...maybe it happens once every ten seasons).

And yet, gyms are notorious for exactly this approach, and they seem to be doing fine.

In fact, I listened to a news story about the difference in costs between your typical "year+ commitment" gym and the "serious" gyms. The serious gyms where people train regularly, consistently, several times a week are MUCH more expensive because they can't have nearly as many members. And they'll (somewhat counterintuitively) kick you out if you don't show up regularly, so that someone else who WILL use the space can train there.

 

[at_nyc]

Taken together, the implication is that if ski school weren't so expensive, lift tickets/season passes would have to get more expensive to compensate.

Taken together, the implication is people who take lesson are subsidizing skiers who do not take lessons.

 

[mdf]

I have no problem in theory with mark-up, or with the idea that all the profit centers get agglomerated together to support all the cost centers. The problem for lessons is that the mark up is so large and so visible that it fails the blink test.

 

[Monique]

Taken together, the implication is people who take lesson are subsidizing skiers who do not take lessons.

Correct, which is pretty interesting to me because (here at pugski) we often say that cheap lessons would improve skier retention. But maybe not if the ticket price shot up!

Of course, VR could "probably" afford a few beginner lessons at a loss ...

 

[LKLA]

And yet, gyms are notorious for exactly this approach, and they seem to be doing fine.

In fact, I listened to a news story about the difference in costs between your typical "year+ commitment" gym and the "serious" gyms. The serious gyms where people train regularly, consistently, several times a week are MUCH more expensive because they can't have nearly as many members. And they'll (somewhat counterintuitively) kick you out if you don't show up regularly, so that someone else who WILL use the space can train there.

I don’t know much about how gyms make money (they don’t have much else to offer aside from the gym membership itself). I do know how ski resorts work though and it’s not by selling passes to people who use them one day.

By the way - the gym industry is changing as well so not sure your statement is going to hold true for much longer. Soul Cycle, Fly Wheel, Barry’s Boot Camp, Peloton,... to name but a few are changing the very model you mentioned and taking market share from that business model at alarming rates.

 

[crgildart]

I have no problem in theory with mark-up, or with the idea that all the profit centers get agglomerated together to support all the cost centers. The problem for lessons is that the mark up is so large and so visible that it fails the blink test.

This, and the revenues are not being trickled down to those who actually facilitate those revenues Someone here mentioned all the wonderful things those revenues finance. Have the benefits packages offered to ski school employees gotten better in proportion to the private lesson price increases at these destination resorts? Pretty sure the benefits packages offered to top management, way above that ski school, have gotten way better..

 

[Monique]

By the way - the gym industry is changing as well so not sure your statement is going to hold true for much longer. Soul Cycle, Fly Wheel, Barry’s Boot Camp, Peloton,... to name but a few are changing the very model you mentioned and taking market share from that business model at alarming rates.

To be fully transparent, I'm not knowledgeable about any of these business models.

I got burned badly when I left a martial arts studio mid-contract when I was in my early 20s. I'd had yearly or more contracts with them since I was a teen, and of course there was a verbal "If you have to move or anything like that, we'll cancel." Well, I moved, but not far enough - and the head instructor retired and left the school to his protege. I didn't like his instruction as well, not to mention an incident where I felt he was being inappropriate at a tournament. (Mid 20s dude massaging shoulders of female teen athlete? Maybe it was innocent, but it squicked me and I was 100% dismissed when I brought it up to the head instructor.) Not to mention the case of the missing hand made Korean sword for which I paid more than I could afford, and which never materialized.

So imagine my surprise when a collection agency came after me for the entire remainder of the contract, including months that hadn't happened yet.

Yeah, I was a kid and a sucker and all of that, but I will never do a yearly contract for services like that. Just won't. I pay month to month for a membership at a rock climbing gym with a nice weight lifting room. I pay a little extra, but I feel better about it.

 

[LKLA]

To be fully transparent, I'm not knowledgeable about any of these business models.

I got burned badly when I left a martial arts studio mid-contract when I was in my early 20s. I'd had yearly or more contracts with them since I was a teen, and of course there was a verbal "If you have to move or anything like that, we'll cancel." Well, I moved, but not far enough - and the head instructor retired and left the school to his protege. I didn't like his instruction as well, not to mention an incident where I felt he was being inappropriate at a tournament. (Mid 20s dude massaging shoulders of female teen athlete? Maybe it was innocent, but it squicked me and I was 100% dismissed when I brought it up to the head instructor.) Not to mention the case of the missing hand made Korean sword for which I paid more than I could afford, and which never materialized.

So imagine my surprise when a collection agency came after me for the entire remainder of the contract, including months that hadn't happened yet.

Yeah, I was a kid and a sucker and all of that, but I will never do a yearly contract for services like that. Just won't. I pay month to month for a membership at a rock climbing gym with a nice weight lifting room. I pay a little extra, but I feel better about it.

You are NOT the only one! I joined a gym called Equinox here in NYC at $150 a month for one year and went less than six times (five of them in the first week).

Gyms are usually places most of us don't want to go to! Most people I know don't all that much like to work out. Any excuse they can make to avoid going to the gym, they do. I myself am one of those (unlike my wife who works out 4-5 days a week).

Hopefully people feel differently about skiing - they actually look forward to going and will make any excuse to go

 

[crgildart]

In the end, at least at the destination resorts, the elasticity of demand seems to be measured correctly since it seems that the market is paying these prices and lessons are booked solid over peak season. Would tips be higher or lower if private lesson prices were significantly dropped? I'm thinking tips would be lower as lower income people entered the market where currently just higher income people are paying. So, it's arguable that these $1,000/day plus price strategies yield higher tips for instructors than a $300/day model would... After all, it's not like you can work more than one all day lesson right??

 

[LKLA]

In the end, at least at the destination resorts, the elasticity of demand seems to be measured correctly since it seems that the market is paying these prices and lessons are booked solid over peak season. Would tips be higher or lower if private lesson prices were significantly dropped? I'm thinking tips would be lower as lower income people entered the market where currently just higher income people are paying. So, it's arguable that these $1,000/day plus price strategies yield higher tips for instructors than a $300/day model would... After all, it's not like you can work more than one all day lesson right??

I do hope people tip ski instructors if they had a good experience. Unfortunately, that does not seem to always be the case. As an example, I would venture to say that most parents do not tip ski instructors when they pick up their kids from an all day group lesson. That has been my observation after dozens of pick-ups.

I think it may not be correct to put all mountains under the same umbrella. The local and drive-to mountains like Jiminy Peak charge significantly less ($300 for a six hour private lesson), while the overnight mountains like Sugarloaf charge more ($420 for full day private) and the fly/destination resorts like Deer Valley charge the most ($950 for a full day private).

In my experience, prices are high, at least at the mountains we ski. The last three mountains we visited - all in New England - had full day lessons priced between $750 and $900. I've taken tennis and golf lessons at some of the best resorts/clubs in the country and the cost is significantly less than that. We've hired fishings guides, mountain biking guides for the day and the cost has been 1/2 of that.

I am not sure if lowering the prices would be such a bad idea. Our family has taken over 50 lessons in the last 2-3 seasons and not once have we been turned away because it was full. And, I have spoken to many, many people who would love to take a lesson or enroll their child in ski school but can not afford to do so.

I have not seen any data that shows which of those three "groups" does the most lesson business, but my hunch is that it is the destination resorts given that they tend to attract the most affluent skiers (both % and number-wise) since it costs much more to take a family of five skiing for a week is Aspen Colorado than it does at Hidden Valley in Missouri.

I think the biggest driver behind lesson fees, at least at the larger mountains, is that the mountains are usually part of a season pass and they are trying to "make up" for any money they left on the table with season pass holders. As it has been written about here - the season pass business is largely based on both getting more skiers on the mountain but also more revenue per skier (either by enticing them to spend and/or by raising prices - lessons being one such example).

 

[Erik Timmerman]

I'm feeling like the Cleveland Browns right now. Managed to have a "perfect" week this week on the tipping frontier.