Season Pass Options/Considerations

[EPB]

You people live in fantasy land if you think the resorts would simply eat the cost of substantially higher wages. They'd be passed on to the consumer via higher tickets and passes. And then you'll all bitch about that. And how many of your average snowsports consumers in the northeast would be willing to pay the difference? People keep saying we need to get more people into the sport and it is too cost-prohibitive as is, yet at the same time we're advocating for higher wages for ski area employees? Sorry, you can't have your cake and eat it too.

This is true. I actually didn't bring this up on purpose because it skews political, but it is essentially a regressive tax whereby we get better vacation options and locals take a bath on their lowish skill seasonal wage rates. I left it as 'prob industry and anti labor' or something to that effect.

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[BenedictGomez]

Pretty certain BG has gone as far as predicting the eventual demise of Vail. Yet adding labor cost is what they should do?

My view on Vail eventually declining has nothing to do with "labor costs", or any individual operating cost, it has to do with the fact that I've seen this movie before in other industries, and it always ends the same. They have a MASSIVE debt position. Nothing that Rob Katz is doing hasnt been done before in other industries. He's combined an aggressive growth strategy (buying everyone under the sun) with what is essentially a subscription service (EPIC pass), and shows huge revenue increases that I will bet my life on are more from immediately accretive bolt-on-acquisitions than they are from true organic growth.

So yes, while Vail's EBITDA (Earnings Before I Trick Dumb Auditors) has looked great, I believe there will come a day when the party ends. I've also said they need to make at least one acquisition per year, because if a year sunsets without an acquisition then you get a true YoY apples-to-apples view of their financials without all the accounting machination ability you have post acquisition. PEAKS closed September 19, 2019, which means that assuming Vail cant acquire anyone in the next 1.5 months because of COVID19, we'll get that clean accounting view sometime in October. Maybe I'll be 100% wrong about that part, we'll see, but I think there's a chance you'll see a bad quarter.

And lastly, the problem with all these aggressive growth companies is that eventually you've plucked all the low-hanging fruit, and subsequent acquisitions become less attractive, or worse, you're pressured into making a few poor purchases. Alterra adopting the same strategy as Vail so quickly was probably not something they foresaw & made the situation worse & drove up acquisition costs via competition. Frankly, I'm pretty surprised Vail hasn't issued a secondary offering to raise cash, but be on the lookout, because I bet that's coming. The stock will drop on that announcement. And the Big 3 ratings agencies will eventually punish Vail's credit status, which will make the borrowing which is the blood that flows through Vail's veins, significantly harder & more expensive. Just wait for that. I'm also pretty surprised the stock's only down 17%, because needless to say, I wouldn't touch it.

Other than that, Vail's a super company.

 

[BenedictGomez]

A bigger factor than any of that was a lack of local housing affordability problems like what exists today. There was no where near the amount of second home owners or real estate investors buying everything up for short term rentals and pushing the natives out of town.

Wow. You finally gave a sensible, market-based bit of evidence directly applicable to the conversation being discussed that actually helps support your thesis. Way to go! Pat yourself on the back, it took a while, but you got there.

I think you both need to come clean and admit your issues with H2B expansion is rooted in Nationalism. It certainly isn't in economic reality.

But then here we go with another ridiculously nasty comment that's completely over-the-top & unbecoming. It doesn't surprise me anymore.

 

[thebigo]

I think I'm gonna do epic and an indy. If the epic is not looking good by december then I'll refund as my cannon pass will stay the same price anyhow. As a midweek skier I'm not too co concerned wildcat will be too crazy and crotchedand sunnapee are close enough for when I'm lazy. If the world doesn't explode by winter I'll probably take a good part of it off anyhow...its.been a long summer

Cool - I will be at the cat most every day with my daughter, let us know when you are around

 

[deadheadskier]

Saw that the first time. Dunno. I bet it ranges quite a bit for a talented boot fitter compared to a rental department or retail sales employee. Not sure the relevance of any of that. Maybe I'll ask Brian next time I'm in.


Wut? That's just plain stupid. Anywhere else I went would have the same employment practice. This is a national issue, not something Killington itself can change. Killington has to compete in the industry against other areas that employ cheaper labor.


What are you suggesting? We're discussing labor policy, I never claimed to be an activist in the matter.

So you are 100% adamant that H2B workers have a large influence in driving down wages for the citizenry you are heavily promoting to have these resort jobs, yet you don't have a clue how much of an impact it actually is in real world reality?

Doesn't sound to me like you are making a researched and informed argument.

Does MRG or Middlebury Snowbowl use H2B workers? Pretty sure they don't. Both fine ski areas and within easy access of I assume your second home in Killington.

Apparently it's all talk and no walk for you Moose. You ever consider running for office?

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[ss20]

Another couple points to make...

A ski industry job bumping chairs or fitting rentals was much more desirable 10-20 years ago when passes were $1,000+ at the destination mountains. Circa 2005, if you're making $7.50/hr 15 weekends a year that $1,000 season pass the resort throws in would be literally half your compensation. Today with mega-passes and cheap passes specifically targeting college kids and 20-somethings doing a job for the season pass makes no sense given in most cases the price of a pass is only $300-$500. In this case the resorts are shooting themselves in the foot.

Also these resorts used to be run on labor that was primarily college students and just-graduated students. That cost has inflated exponentially. I know if I graduated with $50k in debt I would go right into my field rather than take a winter or two off trying to break-even as a ski bum in Skitown USA.

 

[cdskier]

Vail sold 750,000 epic passes at $950 a pop in 18-19, 925,000 total passes. Let's take your $5/hr increase at a cost of $96 million and apply it to 925,000 passes. That's $103.75 more per pass. You're saving 100 bucks by manipulating the labor market and undercutting the citizenry.

These numbers don't quite match what Vail says in their annual report (they claim about $500M of their roughly $1B in lift revenue came from Epic Pass sales in FY 2019). So either they didn't sell that 925,000 total passes or the average cost of each pass was well under $950. If 925,000 is the right number, then the average price paid was closer to around $550 (entirely plausible as it isn't unreasonable to think that a significant number of Epic pass sales were not the full Epic Adult passes and were instead the cheaper Epic local options or even kids Epic passes). Add $100 onto that pass price and now you've just increased average prices by almost 20%. You can argue that $650 average price for a pass is still cheap, and you'd be right generally speaking. However for some people an extra $100 (or more for families that need multiple passes) would be too much and they'd not get a pass and maybe just ski a few random days at a local hill or maybe stop skiing altogether.

Vail (and other resorts) I'm sure have models to try to predict this, but let's say that you lose 5% of your pass sales if you raise your price 20% in a given year. You're now about $30M short of what you needed to cover that wage increase. Sure you can make it up by raising prices on dining and other services. Vail generated about $182M in dining revenue. If we want to make the $30M up there, we have to increase food prices by about 16%. So that $15 burger that people were already complaining about now costs ~$17.50. That $7 beer now costs $8. Sure you can increase ski school and lodging, etc as well. Ultimately though you're just making skiing more and more expensive for the consumer. Doesn't seem like the best idea for a sport that is already considered "too expensive" and has trouble attracting new participants.

And this doesn't even touch on the point of "undercutting the citizenry". In order for that to be true, there need to actually be citizens that WANT to do these jobs. Some others in this thread have already pointed out reasons why that potential labor pool has dried up from years ago.

 

[deadheadskier]

Wow. You finally gave a sensible, market-based bit of evidence directly applicable to the conversation being discussed that actually helps support your thesis. Way to go! Pat yourself on the back, it took a while, but you got there.



But then here we go with another ridiculously nasty comment that's completely over-the-top & unbecoming. It doesn't surprise me anymore.

Truth hurts bud. Nothing nasty about my comment. You simply have not provided any data on why you are so strongly against H2B workers.

Your arguments are ideology based and not supported by a single fact so far. For a guy so staunchly in favor of the need for arguments to be based in data free from emotion; all you've offered so far IS emotion.

How far are H2B workers driving down wages?

How high do wages need to be to right your perceived wrong?

When are you going to stop patronizing places that use H2B workers? Yes I know your affinity to the Magics and Plattekills of the world. However, my observation is you spend quite a bit of money and time skiing at Jay, Smuggs etc who do in fact employ foreign help.

Also you of all people should rightfully understand just how low the revenue opportunities are during shoulder seasons. You barely ever show up to ski much before Christmas and hang up the skis by early April most years and have openly questioned why people are so passionate about WRD skiing.

Stop talking and start walking. You want local workers to make more money? Get out there and spend some when they need it the most.

Please come back with real world numbers to fix this great problem. Tell us what it will take monetarily to fix things.

Good talk



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[deadheadskier]

Another couple points to make...

A ski industry job bumping chairs or fitting rentals was much more desirable 10-20 years ago when passes were $1,000+ at the destination mountains. Circa 2005, if you're making $7.50/hr 15 weekends a year that $1,000 season pass the resort throws in would be literally half your compensation. Today with mega-passes and cheap passes specifically targeting college kids and 20-somethings doing a job for the season pass makes no sense given in most cases the price of a pass is only $300-$500. In this case the resorts are shooting themselves in the foot.

Also these resorts used to be run on labor that was primarily college students and just-graduated students. That cost has inflated exponentially. I know if I graduated with $50k in debt I would go right into my field rather than take a winter or two off trying to break-even as a ski bum in Skitown USA.

^

Also gets it

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[ss20]

I'm going to get rid of some of the gloom and doom in this thread...I work part-time at the local bump as a ski instructor. This will be my 7th season. It's really an ideal setup. I work weekends December 15-March 15. When we shut down, ski country up north is just getting good. Also the partner/resort benefits are HUGE, almost beyond belief. Almost all the major players up north have an industry rate at or around 50% the walk-up lift ticket rate (some considerably less- I've skied a 400 acre resort for $30/day, a 600 acre resort for $49/day). Co-workers are good/bad as with any job but the seasonality of it makes the bad ones tolerable and the good ones even more special.

Honestly getting a foot in the industry took my skiing to a new level, made me appreciate my time up north more, and I'm doing more skiing than before for MUCH less money. I would 100% recommend anyone with 10-15 extra hours a week living in the flatlands to take a similar path at their local hill.

 

[icecoast1]

Also these resorts used to be run on labor that was primarily college students and just-graduated students. That cost has inflated exponentially. I know if I graduated with $50k in debt I would go right into my field rather than take a winter or two off trying to break-even as a ski bum in Skitown USA.

One might be more inclined to stay in the ski industry longer if they actually saw a career path, if that minimum wage job as a lifty could actually turn into a semi-decent paying job with benefits, you wouldn't see so much turnover year to year. The ski industry is pretty good at gaming the system to avoid paying benefits, they make sure the bulk of their workers get laid off and hours cutback just long enough to get under the hours worked threshold to be able to classify a worker as "seasonal" when in fact they work at the resort year round. When you factor in the high cost of living in resort towns and lack of competitive pay and benefits, its no wonder resorts struggle to find domestic staff. Up until this year, they have been able to get away with it because many of the voids were able to be filled with foreign labor.

 

[EPB]

I feel like I'm in bizarro world. Two of the staunchest fiscal conservatives I know in internet land somehow think there's this magic wage threshold that will eliminate the need (or significantly reduce) the reliance on foreign workers by ski resorts. These same two I'm certain have argued against raising the minimum wage to a living wage.

A lifty ain't going to make Alaskan oil rig wages ever.

What world do you people live in? Service industry workers are paid utter crap virtually every where in this country. Sure, there are some socially respectful companies that do at least ok by their workers. Costco and Whole Foods to name a couple.

How much do you think the local bank teller, retail worker, convenience store clerk, hotel housekeeper etc are paid in the flatlands? Utter crap is the answer. Do you make the same passionate arguments for those businesses to pay people better? Never that I've seen.

Yet somehow the ski resorts can just back up the brinks truck and domestic workers will flock there for wages that only last for 15 weeks in winter and another 15-20 in summer/foliage season? With zero unemployment eligibility during the other 20 or so weeks when us tourists don't show up to spend money?

Pretty certain BG has gone as far as predicting the eventual demise of Vail. Yet adding labor cost is what they should do?

As for the old days pre-H2B when resorts could get by on local talent? The labor demands were a fraction of what they are today. Smaller or fewer day lodges, fewer hotels, full service restaurants, non-skiing amenities, less snowmaking, grooming, fewer lifts and on and on. A bigger factor than any of that was a lack of local housing affordability problems like what exists today. There was no where near the amount of second home owners or real estate investors buying everything up for short term rentals and pushing the natives out of town. Local population demographics in resort areas speak for themselves. Just look at the school district retractions going on in VT, Cape Cod etc.

I think you both need to come clean and admit your issues with H2B expansion is rooted in Nationalism. It certainly isn't in economic reality.





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Very disappointing go see this last piece. In 2020, "Nationalism" is more less synonymous with "racism" and I will do nothing of the sort. Nor should I. This is a baseless, gratuitous and bad faith way to communicate when I am merely trying to make points on economic substance.

Ironically, I didn't come out guns blazing on my real critique (that this is a regressive tax - see above) because I didn't want to go political. This is how you respond. And yes, it's ironic that the budget hawk is worried about regressive taxes (and the liberal isn't), but I do happen to find them unethical. Guess we don't all fit neatly into stereotype boxes. My bend is also that the government has put it's fingers in the wage market here and we don't have true price discovery as a result.

Regarding who you think "gets it". I never said this wouldn't be a huge shock to the industry (why you think me of all people wouldn't think raising wages in the neighborhood of 50-100% is beyond me - or that rational actors wouldn't have asked for a subsidy in the first place if it weren't beneficial). What you fail to realize is that there is no option but to pay a wage that will incnntivize enough workers to show up. Period, end of story. Call it economics, call it life, call it common sense, whatever you want, but there's no getting around it.

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[deadheadskier]

A. Wasn't directed at you.

B. When someone is building the argument that their position is for national policy changes to protect jobs for the citizenry, that IS a nationalism point of view.

C. Thanks for at least putting a number on the wage increases at 50-100%. I happen to disagree completely with that high of an increase. The resulting COG increase would be massive at that level. You would see tourism business contraction. It would make entry into the sport even more cost prohibitive, which is often argued as a significant problem already.

D. I'm sticking with my POV that the real reasons for the reliance on foreign help is mostly related to the massive increases in labor demands vs 30 years ago and a stagnant if not decreasing working age local population in many tourist areas due to housing cost increases. Second home owners and investors have pushed the locals out.

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[BenedictGomez]

Very disappointing go see this last piece. In 2020, "Nationalism" is more less synonymous with "racism" and I will do nothing of the sort. Nor should I. This is a baseless, gratuitous and bad faith way to communicate when I am merely trying to make points on economic substance.

This is what people do when they've "got nothing", they lash out in anger. Calling people, "RAY-CYST" has become so en vogue with a segment of our society that sadly the charge is losing meaning. It's sad & pathetic.

 

[BenedictGomez]

Thanks for at least putting a number on the wage increases at 50-100%.

Your even asking for this is dumb. The correct answer is that economically speaking, it is truly impossible to answer your question for a whole variety of reasons. That's a big part of the whole point of what happens when government artificially monkeys with an entire market or market segment. Everything becomes completely distorted. Your "answer" would also vary HUGELY depending up on what geographical area we're dealing with. Suffice it to say, however, it would likely be several dollars higher than it is now, but nobody can say, "the answer is $3.28" like you're requesting, especially not to blanket cover Sunday River, Maine through Aleyska, Alaska.

 

[EPB]

A. Wasn't directed at you.

B. When someone is building the argument that their position is for national policy changes to protect jobs for the citizenry, that IS a nationalism point of view.

C. Thanks for at least putting a number on the wage increases at 50-100%. I happen to disagree completely with that high of an increase. The resulting COG increase would be massive at that level. You would see tourism business contraction. It would make entry into the sport even more cost prohibitive, which is often argued as a significant problem already.

D. I'm sticking with my POV that the real reasons for the reliance on foreign help is mostly related to the massive increases in labor demands vs 30 years ago and a stagnant if not decreasing working age local population in many tourist areas due to housing cost increases. Second home owners and investors have pushed the locals out.

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Understood. Maybe I don't follow enough of you guys arguments (apologies to you both, I don't read them all ), but I tend to not like using what is unfortunately a loaded buzzword these days without being totally sure. That's all.

Look, 50-100% is a total guess and actual bumps would probably be location-specific. There has been talk about how it's to hard to justify ski bumming for a year or two with student debt. The millennials I know that did the ski bum thing were the type that were wealthy enough to not have student debt in the first place. While anecdotal, these types that have the luxury of not truly caring how much money they make out west is a complicating and countervailing factor to my thesis for sure.

But yes, paying fewer people a lot more than today's rate (and automating where possible/refraining from hiring the massive army blue/red coats) would be the outcome.

I guess one final thing to crystalize my view is that the first easy step to raise living standards at places like Vail is to cease allowing temp work to come in and drive down wages. It's less about protecting US citizens, especially to help unsympathetic yuppies that want to vacation 24/7 and pay their bills in Western ski towns (Although in places like the MWV, it would be nice to see locals make more $$).

Totally cool to disagree on supply vs. demand. I think the increased employment is because labor is cheap (initial supply shock) and more improvement/expansion got done because the industry got to make more money than it otherwise would have (subsequent demand hike).

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[EPB]

Your even asking for this is dumb. The correct answer is that economically speaking, it is truly impossible to answer your question for a whole variety of reasons. That's a big part of the whole point of what happens when government artificially monkeys with an entire market or market segment. Everything becomes completely distorted. Your "answer" would also vary HUGELY depending up on what geographical area we're dealing with. Suffice it to say, however, it would likely be several dollars higher than it is now, but nobody can say, "the answer is $3.28" like you're requesting, especially not to blanket cover Sunday River, Maine through Aleyska, Alaska.

I agree but will urge going easy on him here, too. If economics were that easy, there wouldn't be a need to debate. The uncertainty is what makes it fun. Only an experiment would give us the true answer.

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[BenedictGomez]

I agree but will urge going easy on him here, too. If economics were that easy, there wouldn't be a need to debate. The uncertainty is what makes it fun. Only an experiment would give us the true answer.

The high road is always an admirable path, but I tend not go "easy" on people immediately post them calling me a racist.

 

[EPB]

The high road is always an admirable path, but I tend not go "easy" on people immediately post them calling me a racist.

Understood - just trying to turn down the temperature

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[cdskier]

I'm kind of curious what people think an appropriate wage should be for various positions in VT commonly filled by H2B visa workers such as housekeepers, dishwashers, line cooks, etc. These aren't exactly advanced positions.

Alternatively, do some of you even know what the resorts are currently paying their H2B visa workers for these positions? I hope no one is assuming they're just paying all their H2Bs minimum wage...