Price wars a boon for consumers
Resort companies are discounting ski passes so steeply for the upcoming season prices are approaching a godfather-like offer that you can’t refuse.
At stake is a share of the 500,0000-strong Colorado skier market, located largely along the Front Range. The competition, which began four years ago, heats up even more this month with pre-season sales.
“Everybody should rejoice with the price wars,” says ski industry consultant and developer Jerry Jones. “It’s just a bargain to ski now. A lift ticket can be cheaper to purchase than a slopeside hamburger.”
Ski-pass holders who ski every weekend of the 22-week ski season can ski for as little as $9.50 a day – less than the price of an on-mountaIn hamburger – at Colorado’s internationally-known ski resorts. Single-day lift tickets, by contrast, will cost as much as $67 at Vail and $68 at Aspen. Leading the charge, not surprisingly, are the two largest ski companies: Vail Resorts and Intrawest, which host approximately two-thirds of North America’s skiers.
“There’s a better product at a lower price than ever before in the history of the sport,” says Aspen Senior Vice President David Perry. “This is a situation skiers and riders should take advantage of because it won’t last forever. Competitive markets have cycles and it’s hit bottom in my opinion.”
For David Barry, chief operating officer of Intrawest-owned Copper Mountain, the passes offer an opportunity to capture what he calls “lapsed” skiers and boarders. They’re former skiers and boarders whose participation in the sport has lapsed.
The price discounting also presents another opportunity for the resorts making the offering, said Barry.
“It’s a simple volume equation,” he said. “Through reduction of price, a greater number of participants have been able to get involved.”
Vail Resorts offers a $319 Colorado Pass for skiers to use Vail, Beaver Creek, Arapahoe Basin, Keystone and Breckenridge; Intrawest is offering a season pass for Copper Mountain and is expected to bundle that with a pass for Winter Park once details of its development deal with Denver is completed later this fall. Renewals cost $299.
Vail’s $269 Buddy Pass, meanwhile, can be used at Arapahoe Basin, Keystone and Breckenridge. Most discounted passes have some restriction on days they can be used.
The competition has affected even Aspen, priciest of the priciest in Colorado. It discounted the price of a season pass for its four mountains from $1,350 in 1993 to $999 for the coming season. A single-day ticket at an Aspen ticket window costs $68.
Ski passes aren’t just a loss-leader for ski resorts, however. They provide quick cash up front for the resorts. Surprisingly the average Vail Resorts passholder skis only 8.1 days a year, so the company gets close to $40 a day for the passes, says Bill Jensen, chief operating officer for Vail Mountain.
“It works both ways. We believe it increases our market share of in-state skiers,” he says. “It’s been a win-win for Vail Resorts and for skiers.”
Jensen says Vail Resorts sold 118,000 passes last year to its 500,000 or so skiers who logged the 1.6 million skier days at Vail Mountain. Less than 20 percent of skiers at Vail purchase their tickets at the ticket window, Jensen said.
So why do ski companies discount their lift tickets?
“We have the (on-mountain) capacity,” Jensen says “The industry has found if you can get people to commit up-front it’s more profitable.”
The competition for Front Range skiers is fiercest where the drive-time from Denver is less than two hours. Last fall, when terrorist attacks caused air travel jitters, Colorado’s Front Range skier was courted like a semi-reluctant prospective bride by ski areas in Grand, Summit, Eagle and other counties.
At Aspen, where destination skiers are the resort company’s bread and butter, Front Range skiers make up a much smaller market segment.
Vail Resorts’ properties in Eagle and Summit Counties – Vail, Beaver Creek, Breckenridge and Keystone – rely both on both day skiers and destination skiers.
Aspen’s Perry, who recently moved to the ski company from Colorado Ski Country USA, says the primary players, Vail Resorts and Intrawest, “are in a fierce battle for season-pass skiers.”
But like all giddy rides, this too will have a price, warn experts.
“The dark side of all this is the impact on the small ski area,” says Jones. “(They) have typically been like a farm team and have generated new skiers.”
Jones says the long-term consequences for the industry mean there will be fewer ski areas because the smaller operators will be weeded out.
“There’s no question that the price war has been extremely difficult on small operators,” Aspen’s Perry says. “They are more dependant on lift ticket revenue than larger operators are.”
Since the price wars began, small operators like Eldora, Loveland and others have had to become especially creative to define their market niche, Perry says.
The pass wars are spreading, too. Vail Resorts has offered a Perfect 10 pass for $329 that includes skiing at the recently acquired Heavenly Valley in Califorinia, along with its four Colorado resorts.
But in the meantime, skiers and boarders are finding pass prices an offer they cannot refuse.
Cliff Thompson can be reached at 949-0555 ext 450 or firstname.lastname@example.org