buyer's market

Here’s Why Skiing Got So Expensive and So Cheap at the Same Time

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Skiing has never been an inexpensive pursuit. But over the last two decades, the sticker price for skiing at the best U.S. resorts has risen at a far faster pace than inflation. In 2006, the maximum price for a one-day lift ticket at Vail, one of Colorado’s premier resorts, was $85. If that price had risen in line with inflation, it would be $111 today. Instead, the maximum one-day lift ticket sticker price at Vail has climbed to an eye-watering $219.

Of course, a key phrase in that sentence is “sticker price.” Like with so many things, few skiers actually pay list price for access to the mountain. Last year, when Vail’s maximum one-day ticket price was $209, the average effective ticket price charged by Vail Resorts for nearly 15 million skier days was just $68.89 per day. Partly, this is because Vail Resorts is the largest American ski operator, owning dozens of resorts, many of which cost less than the Vail flagship. But it’s also because tickets are far cheaper if you buy in advance, or if you buy a pass that allows you extensive access to the mountains over many days or the whole season.

“Going to buy a lift ticket at the window is kind of like going to the airport and buying a ticket for that day,” said Adrienne Isaac, the director of marketing and communications for the National Ski Areas Association, an industry trade group.

In recent years, as the ski industry has become more consolidated and more corporate, it has copied pricing strategies from the airline and hotel industries, with major discounts for buying in advance. You can even take advantage of these discounts if you’re not the sort of skier who’s likely to make use of a season pass. This season, Vail is offering a product called the Epic Day Pass, which is essentially a flexible lift ticket, valid at any of the 34 resorts the company owns in North America. Prices range from $89 to $125 per day, depending on the number of days and the exact terms and flexibility of the Epic Day Pass product you buy. The only problem, if you’re planning a ski trip now, is that it’s too late to buy an Epic Day Pass: The purchase deadline was November 24 of last year.

“There’s a lot of value for a ski resort to get that advance commitment,” says Rob Katz, the CEO of Vail Resorts. That is, a skier who buys lift tickets in November is one who’s actually going to show up and ski in January or February, regardless of snow conditions and regardless of whatever else has come up in life.

The ski industry is particularly vulnerable to weather and climate risk. Operators are worried about climate change leading to warmer temperatures that reduce the duration of the ski season. But they’re also highly vulnerable to year-to-year variation in weather. Vail has pioneered strategies designed to conquer weather risk: building a geographically diverse portfolio, selling multi-resort season passes, and pushing customers to commit to their ski vacations in advance of the season, before snow conditions are known. This pricing model acts as a form of weather insurance: Even as total skier days go up in seasons with good weather and down in bad, revenue from skiers stays a lot more stable from year to year, making it easier for operators to plan and make capital investments.

In 2008, Vail took a dramatic step to push skiers to buy season passes instead of day lift tickets: It cut the season pass price from $1,849 all the way to $579. (This is when Vail began branding its pass products as “Epic.”) At $1,849, a pass was only really a logical purchase for someone who lived or owned a home near one of Vail’s mountains; at $579, the pass became a plausible product for someone who visits Colorado just for a few days on vacation. Since 2008, the pass price has gone up a lot — this year’s price was $939 if you bought early — but Vail has also acquired dozens more resorts all over North America in the intervening period. For avid skiers who live on the east coast, that means they can buy a single pass that covers all or most of their skiing for the season, including both weekend trips to New England and a longer trip out to the Rockies.

Vail, which makes up about a fifth of the U.S. ski sector as measured by skier days, has driven an industrywide shift in pricing practices. Its largest competitor, Alterra Mountain Company, which owns such resorts as Steamboat and Stratton, offers its own pass product called the Ikon Pass, with a similar value proposition to the Epic Pass at a similar price. Uptake of the pass products has been huge: Vail says it sold 1.2 million passes this year, and Alterra sold hundreds of thousands more. For comparison, there were only 10.3 million Americans who skied or snowboarded at all last season, according to the NSAA.

And yet, even though the fraction of skiers using unlimited passes has soared in the last decade — which you would expect to mean more skier days, as passholders take advantage of the option to ski additional days for free — the total number of skier days in America is approximately unchanged from a decade ago: 55.8 million on average over the last three years, compared to 57.7 million on average from the 2006-7 through 2008-9 seasons.

Katz, the Vail CEO, attributes the stagnant ski-market size to a failure to bring new participants into the industry, even as ski-resort operators have gotten better at rewarding and retaining existing skiers and snowboarders. Convincing consumers to commit to a time- and money-intensive hobby that only becomes any fun after you put a lot of effort into getting good at it is a continual challenge. (It could be worse: While the customer base for skiing has stagnated, the number of active golfers in the U.S. has declined by 20 percent since 2005.) And Katz also notes that skiing has not kept pace with the country’s changing demographics.

“In part, the industry has not made inroads with emerging population groups in the United States,” he says. “Minority populations is the fastest growing part of the United States, and you’re not seeing the engagement in the industry.”

Of course, it seems to me that sticker shock at the ticket window is a likely reason that the industry is having trouble attracting new skiers and snowboarders. I’m not just talking about scaring off total novices, who might as well spend their first ski days at an inexpensive, small, local mountain rather than a mega-resort like Vail anyway. I’m also talking about people who have skied only a few times and are not yet major enthusiasts: They’re not good candidates to buy season passes; they’re unlikely to eagerly book ski tickets months in advance for discounts; and they’re likely unwilling to pay sky-high prices at the last minute.

“I would be worried that there is not enough emphasis being given to growing the next generation of skiers,” says Florian Ederer, an economics professor at the Yale School of Management, who has been critical of ski industry consolidation and the sharp increase in day-ticket prices it has enabled.

This is a downside of ski areas copying the airline pricing model. For airlines, advance-purchase discounts and high last-minute prices are an effective price-discrimination strategy: Last-minute buyers are likely to be business travelers, or people who otherwise really need to travel right away, and are probably less price sensitive. Similarly, the sort of person who shows up at a ticket window at Vail without a plan is probably willing to pay $209 for a ticket; after all, he’s already come all this way. Now that ski areas have better and better deals for the price-sensitive shoppers who make their ski plans in November or earlier, they are free to squeeze those last-minute buyers for more money, just like the airlines do. But that also means people with the most marginal attachment to skiing at a pastime are getting hit with the steepest price increases.

If you are an existing skier, the implications of the new price regime are clear: To the extent you can, plan ahead. If you know you will want to ski next season, buy your lift pass in the summer or fall, and you’ll pay less than half what you’d pay if you waited to buy lift tickets on your trip. You can pay the pass price in installments, and you don’t even need to commit to a specific mountain or specific dates: You can buy a multi-resort pass ahead of the season, and then book your specific ski trip(s) based on your developing schedule or your sense of the ski conditions or your whims. (Though of course, waiting to pick your exact dates means you’re unlikely to get the best deals on lodging; redemptions on points can be especially good deals at ski resort properties, but you often have to book months in advance to find availability.)

If you didn’t plan ahead and you want to ski this season, you’re not totally screwed. Buying your lift ticket online even a few days in advance will save you a few dollars off the window price, though the savings won’t be anything like they are if you buy before the start of the season. And the sticker shock may serve as a reminder to buy in advance — and save — next year.

Skiing Is More Expensive — and Also Cheaper — Than Ever