The Pellucid Perspective - April 2024 - 8

INDUSTRY MACROS
has been successful. Vail Resorts posted a 14% revenue gain in
2023 with 61% of their revenue coming from passholders. Vail
pioneered the program with their " Epic pass " and it appears several
other similar programs have been developed. The IKON pass
created to serve the properties of Alterra and the Mountain Collective
platform basically represent a 3rd Party approach that covers
many of the other major resorts across the US.
The subtitle of the recent Economist article states " How monopoly
and price discrimination are transforming an industry " .
The European author continues into the supposition that long
lift lines and accelerated price escalation will eventually have a
negative impact on the ski industry. He quotes a disgruntled Epic
passholder who refers to Vail Resorts as " the Evil Empire " due
to crowded slopes, traffic congestion and other issues that dilute
the value of his pass. The author also cites examples of pass programs
that are creating " blackout " periods and actually capping
the number skiers on heavy use days. He also suggests that the
European Model of many ski lifts being owned by municipalities
somehow mitigates " discriminatory pricing " .
In his assumption that the ski industry is now a monopoly, he
also zeroes in on the growth of Vail Resorts from 5 properties in
2008 to the 41 ski areas it now owns. While 41 out of the current
480 ski areas is a big chunk (8.5% and actually a higher share of
Vertical Transport Feet a/k/a lift capacity) and there has been
further consolidation of ownership by groups such as Alterra Resorts,
Boyne and a few others; there is enough ownership variety
that the ski industry cannot truly be considered a " monopoly " . It
also should be noted that even though the number of ski areas
has decreased from 735 in 1984 to 480 today, lift capacity is actually
about 20% higher than it was in 1984 due to terrain acreage
increases and the installation of higher capacity lifts. In short, Vail
still has to compete with Aspen and Park City.
As we watch golf courses wrestle with pricing decisions, it's
instructive to pay attention to the ski industry. We are essentially
at the same crossroad as we decide what to do about " season passes " ,
worry about alienating our " core " customers and whether our
price increases will eventually discourage the increased number
of casual players we need to keep our tee sheet utilization at the
higher levels we have enjoyed for the last 4 years.
While it appears that the ski industry has found a " sweet spot "
with the reimagined pass plans that attracted (and retained) casual
visitors; we have to recognize that the reduction in physical
locations since 1984 has made skiing much more dependent on
travel. The Epic concept actually lowered the cost for " locals " but
at the same time expanded its appeal to tourists - they also accurately
projected that the traveling skier would not be likely to
use the pass beyond their stay, or at least not as much as the locals
historically used the old season pass programs.
Over the years, we have always done a calculation for courses
offering season passes. We have seen effective discounts as high
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The Pellucid Perspective - April 2024

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