Are lift tickets too cheap? (Article)

[dlague]

My family must be out of the norm on this one! We have been to Disney once and will never go back. We thought that the kids would like it but they would rather go to a beach and surf or hit the mountains and ski/snowboard!

I never understood the multiple visit thing for Disney so this article does not compute! I looked up their season passes and you have to go there at least 7 times in a year just to break even. Are there people who like it that much?

BTW one of our kids was 5 at the time and now is eleven and does not remember anything except for what he has seen in pictures.

 

[dlague]

I don't get it, once every 2 years is more than enough for me.

You mean

I don't get it, once is more than enough for me.

right?

 

[timm]

I guess there are a lot of Disney people out there who would go often.

However, the issue of season tickets (a season ticket to Disneyland is $669 and good 365 days a year, a season pass to a major resort will cost you more than that and be good only four to six months of the year) raises another question about the validity of this analysis.

How many people are actually paying that $92 at the gate at Disney and the full window price at ski resorts? Presumably many people visiting Disney and ski resorts are on on package vacations, getting discounted tickets through various means or using multi-day or season passes so for a significant portion of visitors, the full gate price is a meaningless number. What you really need is something like average daily rate. But the amount of effort you have to go through just to make the comparison even remotely workable just demonstrates how useless it really is.

 

[bigbog]

Just reading some of that is getting me, very quickly, in the mood for a beer.....gotta leave to get a couple...
Planning the family's activities a year in advance....gotta luv it, what an exciting household....

 

[ss20]

Well, if you're going to take the king of theme parks, Disney, then you have to compare it to the king of skiing, Vail (for arguments sake). Then Disney is 20-30$ cheaper, so no, lift tickets aren't too cheap. Even if you take any of the big Northeast ski resorts they'll be more than Disney.

 

[Smellytele]

BTW one of our kids was 5 at the time and now is eleven and does not remember anything except for what he has seen in pictures.

I have been twice with my kids once when the oldest was 9 (others were 6 and 4) then again when they were 12, 10 and 8. We do not plan on returning again unless they bring us when they have kids.
Also this year maybe our last family ski trip out of the Northeast.

 

[mlctvt]

If we had to pay per run most people on this forum would be screwed! I figured that my per day cost is between $12-$15 depending on the exact number of days I ski per year. Heck most days I have 10 runs in before 10:30am. If they didn't have a seasons pass option it would curtail my skiing big time.

 

[billski]

Pay per run - I don't have data, but I'd bet that the sweet spot customers with the $$ don't take all that many runs. I wouldn't be surprised to see more inventive methods once RFID becomes entrenched. How about $4/run for the green trails or $10 for the knarly black or 2 mile runout? I could see this happening at the local areas, they do it today - a 4-hour pass, etc. I don't see it happening at destination resorts.

Positing that Disney is the same demographic as skiers/boarders ain't right. I'll offer that skiers/boarders are a subset of the Disney demographic. It doesn't take much talent to navigate Disneyworld - walking is about it. The overwhelming majority of Americans prefer their vacations during the heat of the summer.

Customers are equally held captive by either Disney or Ski resorts. $8 burger, $8 burger.

 

[Cannonball]

If we had to pay per run most people on this forum would be screwed! I figured that my per day cost is between $12-$15 depending on the exact number of days I ski per year. Heck most days I have 10 runs in before 10:30am. If they didn't have a seasons pass option it would curtail my skiing big time.

Yeah, exactly to my point that lift tickets are actually a pretty good value for the amount of service they provide. But if you only take a couple of runs the cost is rough. So pay-per-run works for day skiers while you'd still have season pass and other "bulk" purchase options for those of who ski a lot.

 

[HowieT2]

"We should at least consider the data" = here is a bunch of meaningless data thrown at the wall in a slipshod and incoherent fashion in an attempt to be contrarian.

1) Visiting Disney has no additional intrinsic costs associated with a visit. Skiing has significant financial barriers to entry in this area.

2) Disney is in a totally different business and has a brand that no ski resort is ever going to approximate.

3) "annual skier visits divided by 5 to match the scale of Disneyland" - why divided by five? The maximum capacity of the two Disney resorts is just under 200,000 people. Is the maximum capacity of all ski resorts in really 1,000,000 skiers (really, I am asking)?

4) Using (presumably, he does not say) median lift ticket price across all of New England is absurd. New England has lower ticket prices on average than the West (often significantly). But worse, using any kind of aggregate price at all does not make any sense. If you want to compare a Killington or Vail business model to Disney, that is tenuous but may have SOME value. But there are few true destination resorts in the ski industry and many more small mountains. An accurate comparison would have to include all "amusement parks" - including all of small Storybook Land type places, which would yield a much different result.

5) I doubt much of Disney's business model is based on regular repeat customers. I assume most people go to Disney once or twice in a life time.

etc.

while the article posits an interesting issue, the data set is fundamentally flawed. See 4 above. You can't compare only Disney to an average New England lift ticket. That's like comparing the price of an iPad to the average price of a PC. It just makes no sense for so many reasons.
Furthermore, the different growth rates at Disney vs. ne ski resorts, probably has more to do with overall population change, than ticket prices. Florida and the south has been growing for decades while New England is losing population.

on a side note, I've never been to Disney. Not my scene. But for presidents week, we are having a family up who usually go to Disney, for their first ski trip. They want their kids to learn to ski. I'm a little scared. Hope they don't expect me to stick around if there's a powder day.

 

[deadheadskier]

I never understood the multiple visit thing for Disney so this article does not compute! I looked up their season passes and you have to go there at least 7 times in a year just to break even. Are there people who like it that much?

Like ski areas, people who like to go to these parks never pay even close to retail for park tickets. The two big players; Disney and Universal, are super aggressive with their pricing on year passes during the off seasons, especially towards senior Florida residents.

My folks retired to Florida in 2001 and alternate between the two parks getting passes every year. They pay anywhere from $100-$150 for a year pass and typically spend about 6-8 days a year there. Getting into the parks costs them less than $25 a day. They don't even go on the rides much anymore. BUT, they've got lots of family and friends who visit them every winter and the parks offer an alternative entertainment diversion to lounging on the Beach the whole time. They live on the West coast 2 hours west of Orlando and about 2 miles from the beach. The parks always give attractive day ticket discounts to family and guests of year pass holders.

My wife and I make it down every other year or so and we'll go over and spend a couple of days and nights at the parks. I enjoy roller coasters from time to time. Some of the shows and exhibits they have are top notch. There's good food to be had. Great evening entertainment too. Downtown Disney and Universal City Walk both have great music of all varieties, comedy clubs, pubs etc, to make it a fun night out.

Now, would we go to Florida for vacation is my folks didn't retire down there? Probably not unless we have kids someday. Disney and Universal know that too. They provide just enough adult fun options, but their goal is creating fantasy land type experiences for kids where what they watch on TV and think up in their imaginations comes to life right in front of their eyes. Both execute these plans to near perfection and set the standard for service. Brilliant business models truthfully.

 

[drjeff]

If you want to make the Disney comparison, then you have to look BIG picture at it, especially with the general demographic targeted in the SAM Article.

The SAM article is more about the destination ski week crowd much more common to the West than the more typical day/weekend crowd in the East.

I look at it this way. If you're talking about the Western Destination ski trip crowd, then Disney is a fair comparison since for the typical Disney vacation week its about far more than just the rides, its about the non park activities (water parks, shopping, lots of restaurant choices, maybe some golf or other non theme park activities too) Just like for the typical Western Destination resort guest its about more than just the skiing and riding on the hill. The off hill "resort amenities" are an issue.

Now in the typical Eastern resort setting where its more about the day trip than the ski week, keeping with the theme park analogy I'd have to go with Six Flags instead of Disney - you go there for a day or 2, and its so much more about what's in the park than what's available in the surrounding area too!

Sent from my DROID RAZR using AlpineZone mobile app

 

[MadPadraic]

i'm pretty sure it is out west, but i also imagine the for the bigger places in the east, the lift ticket is the 'loss leader' that gets you there, then maybe you stay in a condo, eat at the restaurant and drink at the bar

All we have to go on are recent public filings by Vail and a pre ipo prospectus by intrawest (I haven't read the new one, but saw one from a few years back). Lift tickets and season passes are a huge profit center for these two companies. In the case of Vail "mountain operations" generates four times the revenue of lodging and has a much higher profit margin. Granted, mountain operations includes other things, but lift tickets and season passes are the core business and profitable.

 

[abc]

I guess there are a lot of Disney people out there who would go often.

I wouldn't exactly call myself a "Disney people". But I'm not ashamed to admit I've been to Disney Parks more than once or twice. Not as a kid, nor as a parent. I went because I enjoy the parks. I probably went more like 5 times when I was living and working in Florida!

Those were the days when Disney ticket cost in the $40-50 range and an annual pass cost $99 (yes, I had one for 1 year!)

What did I like about Disney Parks? Well, It was my first year moving to Florida, friends and family came to visit, one after another! They all want to go to Disney, either because they've never been and this would be their once-in-a-lifetime visit, or they've got kids and wanted to bring them there. Now, I didn't have to go with them. But I must say I enjoy going there with friends, seeing them enjoying the fantasy world for a day!

For myself, I like MGM the most. Epcot Center was, at the time of limited offering of international cuisine (I'm talking about the 80's), the one place we can get something other than steak with fries! The original Disney Magic Kingdom doesn't do much for me. Still, I enjoy seeig my family and friends enjoying themselves.

My Dad absolutely LOVE the water park! Went TWICE! (I bought him a multi-park pack)

So, just like some people do the same run many times even though a mountain have hundreds of runs. Some other people go to Disney multiple times!

Granted, I no longer live in Florida so I haven't been to a Disney for many years.

BTW, those were the years when ski lift tickets were at most $50/day even in the "biggies". And I didn't think skiing was expensive. Consider Disney is now costing not quite $100, same as Stowe. I don't plan to visit Stowe more than once or twice a year. Hope that's alright with Stowe's business plan! ;-)

(reality being, skiing population is a much smaller pool than Disney, and there're only one Disney and MANY ski resorts to spread that smaller population pool, the high cost is not helping them to attract visitors for repeat visits)

 

[BenedictGomez]

That was a silly article really. The guy shouldn't have been surprised that there was a financial correlation between daily entertainment vehicles any more so than the correlation found with any other like items.

 

[Domeskier]

I suspect that ski ticket prices are not too cheap or too high. They are what the market will bear.

I think this is right. Even granting all of this guy's outrageous assumptions, probably the most we can conclude is that Disney tickets are underpriced relative to ski areas and that Walt is leaving money on the table, so to speak.

 

[quiglam1]

I agree that lift tickets are what the market will bear. I would think that the cost of insurance and liability insurance at a ski resort would be quite high.

 

[catskills]

Nothing was mentioned about selling real estate, which is significant percentage of profit and revenue for both Disney and ski resorts.

 

[x10003q]

Disney is ingrained in the culture of the North America (and at this point the entire World) and markets itself to the entire population. This is very different from a fragmented skiing market where the target market is such a small % of the NA population. If you want a Disney Park vacation you only have 2 choices in the US. If you want to have a ski vacation you have hundreds of choices. It is a very poor comparison.

We took our 1st grader to Disney last Nov. We had a great time. Will we go back? Maybe. It is not at the top of the list of places to visit anymore.

We have neighbors who go to Disney at least 2 times a year. They just love it. This is more common than we would think.

 

[dlague]

Disney is ingrained in the culture of the North America (and at this point the entire World) and markets itself to the entire population. This is very different from a fragmented skiing market where the target market is such a small % of the NA population. If you want a Disney Park vacation you only have 2 choices in the US. If you want to have a ski vacation you have hundreds of choices. It is a very poor comparison.

We took our 1st grader to Disney last Nov. We had a great time. Will we go back? Maybe. It is not at the top of the list of places to visit anymore.

We have neighbors who go to Disney at least 2 times a year. They just love it. This is more common than we would think.

We know families that go multiple times each year as well - but as far as winter is concerned they don't do much else. They head south a few times during the winter effectively. Then again, my wife gets on my case because - if we can ski, warmer weather locations are not to be discussed! Plus if we went to Disney as much as we ski then I would have to shoot myself!

Note: My wife hates Disney though - so I am safe!