All For One: Effect on the Northeast ski industry?

[Greg]

I had heard that there were many who bought an A41 and didn't use it at all, or enough to break even. That, theoretically, could have made that a real money maker out of the A41. Has anyone got the hard facts on that?

No idea, but I don't think that folks not using their pass is a good thing. After all, they're not spending money on food, lessons, lodging, etc., nor are they bringing friends that might buy a day ticket and spend even more money on resort amenities. Snowmaking, turning lifts, staffing, etc. all still needed to happen anyway despite the no-shows.

 

[ctenidae]

No idea, but I don't think that folks not using their pass is a good thing. After all, they're not spending money on food, lessons, lodging, etc., nor are they bringing friends that might buy a day ticket and spend even more money on resort amenities. Snowmaking, turning lifts, staffing, etc. all still needed to happen anyway despite the no-shows.

That's a great point- marginal costs for the mountain don't increase with each skier- at least, not significantly. It's almost totally a fixed-cost business- which is nice when you're covering fixed costs, not so much when you're not. Those underutilized passes don't help the mountain at all, aside from providing extra cash up front.

 

[SIKSKIER]

Same as BobR,I bought the A41 as a secondary pass to my perpetial Cannon pass.It was too good of a deal and got me to go to more Mts than I normally did.This year though,ASC got the "good" deal as I only used it 4 days.If the price doubles for a similar pass for SR and SL,I probably won't have a second pass next year.Oh well,it was great while it lasted!

 

[essslsclsact]

All For One must have increased overall ASC Revenue as they did not increase the $$$ much over the years it existed. Although it may have brought out more people to ski, it made weekends at the Loaf & River more than very crowded. Some of those days we just had to quit after a few runs as it was not enjoyable dodging the mobs.

We're hoping Boyne puts out a pass structure comparable to Mt. Snow, different pass options, e.g unlimited, some blackout dates, mid-week etc. and gives some other pass benefits. They seem successful and smart enough not to tick off the loyal Loaf & River skiers who are their new customers.

 

[Vinny]

Now, could you honestly say that if you see some SIGNIFICANT ON HILL improvements (i.e. real snowmaking upgrades, new lifts, etc) that you'd really gripe about adding an extra day or two's day ticket price to a season pass?? Doubtful, and many folks would have that view too I'd bet.

Great point, and I agree 100%. I'd MUCH rather pay for a longer "break-even" point on my season pass if I knew there were tangible improvements to the mountain and base facilities. If snowmaking and conditions improve I'm going to ski more days and probably ski longer each day. Also, with better lifts you can get more runs/$. Plus, the whole experience is better.

I'd pick owners who charge slightly more and invest in our sport over owners who "give you a bargain" and let the place go to waste. I ski most often at Mt. Snow, so we'll see if it works out as I'm hoping.

Skiing is an expensive sport no matter how you cut it. If you don't get a terrific experience from it, people who aren't already hooked are going to look elsewhere to spend their hard earned cash.

 

[riverc0il]

One result in my opinion is the cheapo A41 passes established an unrealistic expectation in terms of what's a fair season pass price, as well as a sense of entitlement.

Could not have said it any better.

 

[riverc0il]

We typically ski 18 days a year. The A41 didn't increase that any, but on those early season days where only 2 routes were open, it did get us to go. Normally, we wouldn't pay $40 for 2 routes down a mountain.

This to me suggests another negative effect of the A41: early and late season skiing. With season pass holders who would not normally both with early and late season as paying day trippers, the early and late season traffic increased significantly compared to open terrain creating a bad product (or worse product than far fewer season pass holders would have allowed for) at no additional revenue to the ski area (i.e. on additional motivation to open early or stay open longer). Bigger crowds (lots of young obnoxious punks at that, I have been and seen Kmart in November) and quickly degrading conditions certainly kept non-season pass holders and day trippers away (it did me for the most part, I put in a few token efforts due to the Jones but certainly wasn't there every weekend when they were the best game in town). You have to wonder if Killington sold more day tickets and had fewer pass holders if they would have balanced out the late/early season books better than if the majority of skiers were skiing on a season pass on which they would not partake in skiing early season without? Interesting to contemplate.

 

[riverc0il]

I truely think that this isn't an issue that will play out completely for 2 or 3 seasons.

Somewhat yes but somewhat no. Look at the Threedom Pass price increase this season. That seems beyond just coincidence. It will also be interesting to see the final results of the ASC sell off areas setting Pass Pricing. Again there will be substantial increases from the A41 and we are already seeing many unhappy customers considering other options. But for the most part as a ripple through this region of the industry, 2-3 years sounds fair as most areas do not seem to have adjusted their pricing and the Blackout date is really only an issue at the more corporate styled resorts versus the "skier mountains."

I think the more immediate impact in general is the ASC fire sale versus the season pass prices and the A41 in particular.

 

[klrskiah]

all i know is that it got a lot of my friends into skiing 10+ days a year who otherwise wouldn't have taken a real intrest in the sport. and it allowed our family to be season passholders for the last 4 seasons which also probably wouldn't have happened.

i have a feeling that there will be a nice deal offered for a loaf / river combo pass next year

 

[bigbog]

A41 was first season pass @Loaf ~= SR's

Agree with drjeff...and klrskiah...
For several seasons prior to the A41 Sugarloaf's season pass WAS $1K+!!!! while down the road ~40+mi in Bethel....everyone was paying ~$100-200 less.
Most Loafers went with the A41's Bronze/Silver passes simply because it's been the cheapest season pass to the Loaf...and I'd be willing to guess that most New Englanders took advantage of the out of state portion only when visiting, on business, or taking those 1-5 trips/season. It would be pretty exhausting, PHYSICALLY, to shuttle Kingfield_ME <---> N.Conway_NH on a weekly basis...not to mention to Killington every week.
Would hate to see the cheapest pass to the Loaf get jacked up sky high again....I think quite a few people are on the verge of jumping ship as it is...then Saddleback would crowd up I'm afraid.

 

[Edd]

I know I speak for many when I say the A41 was fan-freakin-tastic for obvious reasons. A few folks on this thread seem to think it had zero positive effects, which sounds unreasonable. No doubt it had many pros and cons but I and others I know skied our balls off for a price that allowed us to. Some of us just cannot afford a $1000 pass along with many other expenses that come with skiing . Some folks here are clearly very financially comfortable and my hat is off to you, but give the rest of us a break.

Also, it was mentioned that unused A41 passes don't do the resorts any good. Ridiculous. That's free money, and alot of those passes are underused. Those people wouldn't have skied any more without the pass so I see that as good for the resorts.

Additionally, I'm skeptical that the A41 is responsible for overcrowded weekends at SR/SL. As sure as the sun rises, Saturdays suck at any resort in the Northeast. My fingers are crossed for an affordable A41 type pass this year because this kid needs to ski.

 

[riverc0il]

I know I speak for many when I say the A41 was fan-freakin-tastic for obvious reasons. A few folks on this thread seem to think it had zero positive effects, which sounds unreasonable. No doubt it had many pros and cons but I and others I know skied our balls off for a price that allowed us to. Some of us just cannot afford a $1000 pass along with many other expenses that come with skiing . Some folks here are clearly very financially comfortable and my hat is off to you, but give the rest of us a break.

A lot of folks have been citing the A41 Season Pass as providing a cheap way to ski a lot. It sure did but not to the exclusion of other options. There are a lot of Season Passes out there under $400 to mid-sized mountains and some of the smaller mountains offering season passes for even less. Lots of the larger mountains top out around $500-600 which isn't that much more than the A41. Only a few upper crust resorts such as Stowe, Sugarbush, and Stratton hit the $1000 mark. I am not financially challenged but far from financially comfortable and always seek ultra cheap skiing whenever possible. But there are other options out there for a skier looking to get lots of days on the cheap for a similar price to the A41. You just don't get six mountains to choose from any more. Greg makes a good play by getting a season pass to a local low-to-mid-sized mountain for maximum quantity of days and then taking bigger trips when ever possible for the quality.

 

[threecy]

Everything comes at a price...A41 was not a fair price, as it was at the expensive of money that couldn't and wouldn't be repaid.

The unused season passes argument isn't really valid, as it isn't unique to the A41 pass - there are passes at all prices at almost all ski areas that get used but only once or twice. It baffles me that this happens, but it does - and relatively often.

 

[JimG.]

A lot of folks have been citing the A41 Season Pass as providing a cheap way to ski a lot. It sure did but not to the exclusion of other options. There are a lot of Season Passes out there under $400 to mid-sized mountains and some of the smaller mountains offering season passes for even less. Lots of the larger mountains top out around $500-600 which isn't that much more than the A41. Only a few upper crust resorts such as Stowe, Sugarbush, and Stratton hit the $1000 mark. I am not financially challenged but far from financially comfortable and always seek ultra cheap skiing whenever possible. But there are other options out there for a skier looking to get lots of days on the cheap for a similar price to the A41. You just don't get six mountains to choose from any more. Greg makes a good play by getting a season pass to a local low-to-mid-sized mountain for maximum quantity of days and then taking bigger trips when ever possible for the quality.

Your words speak for me Steve.

I know I'm one of the allegedly "financially comfortable" people, but with 3 kids and a wife who works at home raising our sons, I am far from financially independent. And I'm not taking the stance I take here for anything other than promoting conversation.

The A41 was a desperate attempt to re-coup skier visits and then an artificial stimulant of skier visits with the purpose of selling the resort. It was a play to make money and then to promote a sale. ASC didn't offer it for a valiant and higher purpose like promoting skiing to a larger group or providing affordable skiing for the masses. Don't fool yourself Edd.

 

[eastcoastpowderhound]

Everything comes at a price...A41 was not a fair price, as it was at the expensive of money that couldn't and wouldn't be repaid.

I beg to differ...I've personally heard senior ASC officials say that the larger volume of early season pass sales...attributable to the A41 deals, allowed them to keep their resorts open through the dismal start of last season...and without the revenue from A41 passes they would have had to resort to "draconian measures." Also remember that not all of the A41 passes sold were bronze passes...they also had silver passes, gold passes and platinum passes...only ~ 35% of the passes sold were the lowest price bronze pass.
Some of you argue yourselves in circles when you say the A41 passes were a financial loser...and in the next sentance complain that the passes led to overcrowding. Barring an epic powder day...and even then, a crowded resort doesn't only mean people on the hill and in liftlines...it also means people in cafeteria lines, rental shop lines, bellying up to the bar etc. The more folks at the resort, the more potential for additional sales per visitor in lodging, f&b, retail, rental, ski school, etc.
The financial woes of ASC had more to do with their cost of capital than their trouble finding revenue. Would you be able to afford your mortgage if you had to pay 10% even 15% interest? Probably not.

 

[JimG.]

Barring an epic powder day...and even then, a crowded resort doesn't only mean people on the hill and in liftlines...it also means people in cafeteria lines, rental shop lines, bellying up to the bar etc. The more folks at the resort, the more potential for additional sales per visitor in lodging, f&b, retail, rental, ski school, etc.

Are you sure that the folks who bought these cheap passes then turned around and gave the savings back at the bar or cafeteria? Or is it more likely that these bargain hunters brown bagged it and spent nothing at the resort?

As for the money collected saving the early season, that's why mountains all offer season passes with discounts for early commitment, certainly not unique to Killington or ASC. It gives them working capital to start the season. Whoever said that to you was blowing smoke and toeing the company line of that being the financial windfall of the program and how it benefitted skiers.

What ASC did was akin to foreign companies dumping product cheap on the American market...they could have gotten alot more for those passes with little loss of skier visits.

To me, that's bad business. If it weren't, wouldn't ASC still be king?

 

[Geoff]

I beg to differ...I've personally heard senior ASC officials say that the larger volume of early season pass sales...attributable to the A41 deals, allowed them to keep their resorts open through the dismal start of last season...and without the revenue from A41 passes they would have had to resort to "draconian measures." Also remember that not all of the A41 passes sold were bronze passes...they also had silver passes, gold passes and platinum passes...only ~ 35% of the passes sold were the lowest price bronze pass.
Some of you argue yourselves in circles when you say the A41 passes were a financial loser...and in the next sentance complain that the passes led to overcrowding. Barring an epic powder day...and even then, a crowded resort doesn't only mean people on the hill and in liftlines...it also means people in cafeteria lines, rental shop lines, bellying up to the bar etc. The more folks at the resort, the more potential for additional sales per visitor in lodging, f&b, retail, rental, ski school, etc.
The financial woes of ASC had more to do with their cost of capital than their trouble finding revenue. Would you be able to afford your mortgage if you had to pay 10% even 15% interest? Probably not.

What I've heard from a former ASC VP:

The cheap passes were jammed down the throat of management by the board of directors (Oak Hill Ventures who now own The Canyons). Nobody wanted it. It produced lousy skier yields of something like mid-$30's per day. The day ticket business dropped off substantially. Plain & simple... it didn't work. What it did do was create enough cash in the summer so ASC could make payments on some of their loans.

At Killington, the big winners were the businesses on the Access Road. The bronze pass people may not have spent much money in the cafeteria or at the base lodge bar but they certainly bought a lot of ski equipment and ate & drank in the private establishments on the access road. I've been hearing that shops on the access road are cutting back significantly on inventory for the 07-08 season.

 

[threecy]

Everything comes at a price...A41 was not a fair price, as it was at the expensive of money that couldn't and wouldn't be repaid.

The financial woes of ASC had more to do with their cost of capital

I don't think we're arguing here. ASC couldn't pay for their property or operational costs with their pricing system. They were able to leverage their debt and try a last ditch effort to get people on their slopes. This money came out of the pockets of their investors and creditors. In other words, these passes were subsidized. One could go as far as to call it skiing welfare. The prices weren't reasonable - hence why you don't see them elsewhere for the amount of skiing offered.

 

[threecy]

Or is it more likely that these bargain hunters brown bagged it and spent nothing at the resort?

This proves to be true in many businesses. I've personally seen this in the ski industry, lodging industry, office supply industry, and mini-golfing industry (hah). The business makes an effort to discount the price of entry in hopes of making that money back via the purchase of additional goods or services. Sometimes it works - many times it doesn't. A bargain hunter is a bargain hunter - very few hunt a bargain then splurge what they saved and more (you need them to spend more than they would have at regular price, in theory, to make it worthwhile to you, the businessman).

 

[eastcoastpowderhound]

Are you sure that the folks who bought these cheap passes then turned around and gave the savings back at the bar or cafeteria? Or is it more likely that these bargain hunters brown bagged it and spent nothing at the resort?

As for the money collected saving the early season, that's why mountains all offer season passes with discounts for early commitment, certainly not unique to Killington or ASC. It gives them working capital to start the season. Whoever said that to you was blowing smoke and toeing the company line of that being the financial windfall of the program and how it benefitted skiers.

What ASC did was akin to foreign companies dumping product cheap on the American market...they could have gotten alot more for those passes with little loss of skier visits.

To me, that's bad business. If it weren't, wouldn't ASC still be king?

I'm sure some of the bargain hunters brown bagged everything...and I'm sure others didn't. If you just shelled out $60 for a lift ticket, how likely are you to drop $20 on lunch? What if you shelled out $379 back in May...its now Jan...you'd be much more likely to spend some $$ on lunch or a $2.50 hot chocolate. If you're sitting at home in Ma or Ct or wherever, debating going to the hill, unsure of the conditions, how likely are you to get in your car and drive a couple of hours to spend $60 on a day ticket? Same scenario, but now you've got a pass...are you more likely to go?

Over the years of the A41 passes, ASC sold over 4 times the number of passes compared to the 1K+ days. Do the math, we'll keep it simple 10 people buy a $1000 pass, resort gets $10,000. Now 40 people buy a $400 pass, you've got $16,000...and 4 times the number of folks commited to your resort instead of floating all over NE.

You missed my last point...its debt service and cost of capital that sunk the ship...each year over the last 4 they exceeded the prior year's revenue, EBITDA was growing annually (check the financial reports on their site) but it couldn't catch up to the debt...essentially it was doomed from the start...lower costs of capital from the beginning and we might not be having this conversation.