The Value of a Ski Lift Ticket

Ski areas and resorts claim a broad range of differentiators. Competition in the industry is fierce and leisure dollars more elusive so it requires creativity and innovation to fill chairlifts. Most ski resort executives will tell you it is all about snow,as_ski_ticketprices576 snow and hopefully, more snow. This assessment is not inaccurate but it is the equivalent of saying everything in real estate concerns location. Much, much more goes into ski resort marketing.

A visit to any ski area website will reveal effusive superlatives detailing the variety of terrain; the speed, comfort, and number of lifts; competing boasts of groomed corduroy and natural bumps; a plethora of ski school programs; après fun; and children’s activities. This gets more complicated as ski areas can either cater to day-trippers or be longer stay vacation destinations. The latter emphasizes accommodations and related infrastructure to get heads-in-beds and skis-on-slopes.

Like any industry, differentiators in the ski business rapidly become commodities. At one time snowmaking was available at only a few resorts. This was as close to a guarantee as one could get in a weather dependent business so soon all resorts made the investment. Ski schools too were once a clear differentiator that in the early days featured rock star directors. Timeshare accommodations are actually a ski industry innovation, as are, terrain parks to attract the once reviled snowboarding population.

In 2002, Park City installed the first zipline at a ski area and now most resorts feature this attraction. Breckenridge claims the highest chairlift in North Amercia. The Imperial Express climbs to 3,914 meters offering access to the area’s best runs. 102163_Snowbasin-1-Day-Lift-TicketsAll this says is – it is getting harder and harder to stand out. After skiing at over 25 resorts on 3 continents, I have tempered my expectations and simply crave non-slip washroom floors, hot chocolate under 5 bucks, and lift attendants devoid of cigarette smell. Actually, I have often joked that $1 hot chocolates would be the most effective bit of marketing a ski area could offer.

Over 600 North American ski resorts divide up $3 billion in annual revenue. That sounds impressive but equates to $5 million per resort. Imagine Vail versus your local hill to get a better understanding of the actual revenue distribution. Margins are awfully thin (thus the $5 hot chocolates) and annual growth rates have declined by -0.5% over the last five years.

So what is a resort to do? Most have responded with traditional advertising, experimented with social media, and upped the weekend promotional events. The latter activity is so leveraged that ski areas are now snowy circuses. They are a weird cross between a carnival and car dealership opening. I am jaded by them and believe they distract skiers from the price/value equation of the actual lift ticket.

And herein lies the issue and the opportunity. Ski areas are largely immature in what I consider the most important aspect of the marketing mix, namely pricing. The purpose of pricing is not to recover cost but it is to capture value in the mind of the customer. Unfortunately, ski areas do not consistently make this connection. More often the pricing confuses or turns skiers into skeptics.

Vail Resorts did this recently with their season pass. Ski Area Management magazine profiled this as one of the worst marketing moves. Vail’s “lowest guaranteed price” deadline came and went four times. And then Vail management SJMN_NTLZAVORALextended it a fifth time. When the price finally rose, the increase amounted to $20 or 3% of the total price. This weakened Vail’s credibility and gave skiers cause to question any future deadline.

Pricing matches different classes of purchasers with different levels of perceived and real value. That is why there are variations in pricing at ski resorts, Starbucks and your local car wash. The challenge in the ski business is delivering an experience that meets the Gucci Family Slogan, “Quality is remembered long after the price is forgotten.” Yet, though expensive, skiing is not a luxury product. For every Bogner wearing couple, where money is no object, there are thousands of broke boarders, budgeting families, and busted students.

The most striking issue is ski area marketers confusing discounting with true pricing strategies. Every resort seems clumsy in this regard. It comes across as tactics in desperate search of a strategy. Here are just a few of the approaches used:

Anniversary specials – both Mont Tremblant and Park City used their birthdates to add more options (and complexity) to their pricing
Multi resort passes – there is the Epic pass covering 7 resorts in the Colorado, Utah and Lake Tahoe region and The Mountain Collective of Alta, Aspen/Snowmass, Jackson Hole, Squaw Valley and Alpine Meadows
Season pass price reductions by certain deadlines
Multi ticket options for vacationers
Weekday and night skiing deals
Ski and stay packages

The full day lift ticket is a resort’s anchor price. From there, the overabundance of potential deals and discounts are growing as varied and confusing as airplane tickets. Incredibly, Big Sky now has 9 different types of season passes. On top of all this are promotional contests, giveaways and sweepstakes. Then there are passes for front-of-the-line services geared towards fat wallets or pay-by-terrain for those chasing vertical. If this continues, resorts will employ more accountants than lift attendants.

Snowboarder_Aspen_11.22.12_1353628518242_330927_ver1.0_640_480I imagine ski resort executives must dance a jig if they ever see that someone has actually paid the full price for a day lift ticket. When pricing is done right it is nearly transparent to a customer. It is neither, “I got a deal” or “I got ripped off”, it is more akin to Goldilocks – it was just right. I fear that ski resorts have backed themselves into a discounting and deal corner. The long-term result will be erosion of the brand’s value while training skiers never to pay full price or anywhere near it.

Quite simply, ski resorts need to simplify and set pricing. Skiers will appreciate and respond to a more comprehensible and consistent approach. Ski resort marketers need to read The Paradox of Choice by Barry Schwartz to see that fewer options may actually do more for the bottom-line.

One encouraging sign is resorts are staffing up with different talent. Mammoth Mountain hired Asics’ Vice President of Marketing as its Chief Marketing Officer. Historically, ski resort marketers have come from travel and hospitality so a fresh consumer product mindset may be beneficial. Marketing professionals from apparel and retail know that discounting is a slow route to irrelevancy and slimmer margins.

The greatest piece of marketing inadvertently created by the ski industry was the day pass itself. Once they were stickers folded over little triangles of metal. Now they are clipped on with plastic tags. Day passes originally identified those who had paid to ski. Then they featured some text that indemnified ski area owners against litigation. But the true value of the day pass is as a brand badge displaying the resort logo. Skiers often refrain from removing them because they tell a story. Ski area management has to ensure these passes are not discounted to the point that they become a commodity.

1 reply
  1. Michelle
    Michelle says:

    Thanks for your very well articulated thoughts Jeff! However I contend that the biggest opportunity for ski resports in leveraging the marketing mix is not “price” but effcetive use of data to increase loyalty and engagement!
    As a purchaser of a season pass at my local hill for the past 7 years I see an opportunity for marketing to create an enhanced expereince unique and ongoing relevant communications ( therefore increasing my engagement and yearly repeat purchase). After all, when buying that pass every year I complete the on line form, the ski hill is collecting very insightful data into who I am , the ages of my kids etc… Then, I go collect my pass – more data is collected – even my picture! But… alas there it stops. This, in my opinion is the biggest Marketing opportunity…. Ski resorts dream big for a minute. What if you could track my behaviuor each weekend via that pass, what if you could send me highly relevant information based on that behaviuor and preferences? what if you could send Jeff the $1 hot chocolate coupon as he completes his last run of the day and me a front of the line pass for a glass of red wine at my prefered apres ski spot? The posibilites are endless…

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