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Season Pass Economics (For the Resorts)

Zermatt

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I have always wondered about the economics behind season pass sales and pricing, not from a skier perspective but from the resort's side.

For example, why is Stowe so much more compared to other resorts in the region? Is it all supply and demand? Do they raise enough pre-season capital selling $1,800 passes? If they sold them for $600 would the mountain be overcrowded? Or maybe a better comparison is Bromley for almost $1,000 and Pico for $400. Quite a difference with the latter offering significantly more terrain (but also farther from NYC).

Does anyone know how these combo pass deals are shared among the resorts? How does the Max Pass get paid out to the different areas? Is the $600 split at the end of the season based on usage? Is the $600 split evenly among the 25 resorts (I doubt it). Are they really just banking on you bringing full paying friends and getting add ons at the resort? Same for the Mountain Collective....

Just interested in how all that works.
 

thetrailboss

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Good question.

Stowe has invested A LOT into the resort over the past decade or so.....as in hundreds of millions. They also want to limit crowds. Hence the high prices.

I can't speak to Bromley.

As for Pico, POWDR runs it on a limited basis now and price it accordingly.

I know from talking with many folks in the industry that season pass revenue generally is used to fund start-up expenses each season and to sustain operations and costs. The gravy comes from day ticket sales.
 

Zermatt

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Hundred of millions in lifts and lodging right? Not just lifts (and other on mountain improvements). Seems crazy to pass along hotel costs to season pass holders.

Resorts in the west spend hundreds of millions as well and their season passes are a real bargain. Even Steamboat at $1,100 is away from the front range crowds but still a steal compared to Stowe. My guess is the market supports the price at Stowe. They want to raise $x before the season starts and they have no problem getting there with their current pass prices.
 

cdskier

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Very interesting question and one I've wondered often myself. So here's a comparison of some of the major resorts in VT (adult unrestricted passes at the early purchase rates):

Bromley 925
Stratton 899
Mt Snow 599
Okemo 1239
Killington 1119*
Sugarbush 1149
MRG 771*
Stowe 1788*
Jay 749

*indicates last year's early season pass rates

I think you need to break it down a bit and compare by region within VT. Southern VT has a huge discrepancy between the 4 resorts I listed. When you factor in that the Mt Snow pass also includes a bunch of other resorts...it really seems like a steal. Does being owned by a company that has numerous other results help them keep the pass prices low somehow? Or are they banking on sheer volume of passes sold to help overcome the price difference from a corporate income perspective?

I'll consider K, SB, MRG, and Stowe as more "central VT" for this purpose. SB and K are usually pretty close in price. I haven't seen K's new prices yet. I'd have to think SB considers K one of their main competitors. I'd personally take SB's terrain and extra natural snow over K even though K is a shorter drive. MRG is dependent on natural snow too much and you can see in a year like this how that really hurt them. Their price is decently lower than others in the area, but they also should have lower operating costs (i.e. due to less snowmaking). Stowe is the one here that I have a hard time justifying. Does their parent corporation simply want to ensure they always turn a profit? Are they trying to put themselves out of the price range for some people to limit crowds?

Jay in northern VT I always felt had to be lower to try to draw people in simply due to how far they are from the major metro areas in NYC or Boston.

Without knowing the specifics of each resort's finances and numbers behind the scenes it is really hard to say why some resorts price themselves the way they do. trailboss makes an interesting point about day ticket sales. Many resorts still generate a substantial amount of revenue from day tickets. It could be very interesting to see how that varies by resort though. Sugarbush for example has claimed that they see a higher percentage of season pass skier visits vs day tickets than other areas. Differences like that have to be accounted for in pricing strategies.

Not sure if I've added much of value here with my rambling...but I've always found this an interesting topic as well and would love to know more.
 

KustyTheKlown

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i've always thought the low season pass prices were to draw people to the bar/hotel/tubing/whatever, and to develop customer loyalty and get people who will come back year after year to the bar/hotel/tubing/whatever. it's my understanding that ski "resorts" don't earn the bulk of their money from skiing, and its all the real estate and extras that drive revenue.

with stowe, i suspect they want to make it a tough decision as to season pass v. day ticket as you need to ski 10+ days at stowe to make the pass worthwhile and most people won't do that. i also think stowe has a bit of a fuck the locals mentality (is a locals season pass less expensive?) because they want to drive wealthy tourist business to the mountain, and get people paying for day tix and expensive lodging. they know joe waterbury can go down to sugarbush bolton mad river or smuggs for a better deal.
 

Zermatt

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It's hard to even pick out a pattern for pricing, but I do see your regional connection...with outliers.

On a per acre basis Bromley is very expensive. They told me on Twitter that they don't have any other sources of income like the other resorts. Pico probably the cheapest per acre.

Stowe is just in its own world, need to ski a lot of days to pay for that pass.
 

deadheadskier

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One need only look at real estate prices in Stowe to understand the pass price. The market can afford it.
 

cdskier

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On a per acre basis Bromley is very expensive. They told me on Twitter that they don't have any other sources of income like the other resorts.

That's certainly another factor. Some resorts have real estate income and even decent summer businesses (golf courses, water parks, mountain biking, etc). Sugarbush even has a utility company that provides water, sewer, and road maintenance to properties near the base (even ones not owned by Sugarbush). Do they simply break even on that or do they use that as a source of some income too?
 

deadheadskier

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Harvey

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Mountains out west have less snowmaking and associated cost.

I always ask GMs that I talk to:

"What percentage or revenue (all in) is attributed to passholders?"

Answers range from 5-20%. These numbers are primarily NY + VT.

The money comes in at an important time, when revenue is very low and capital improvements are underway.
 

KustyTheKlown

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Sugarbush for example has claimed that they see a higher percentage of season pass skier visits vs day tickets than other areas.

sugarbush offers a good student pass rate, a $299 for20s pass, and gives out season passes to beginners who complete a 3 lesson sequence.
 

AdironRider

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I think ski resorts make a lot more money than most people assume. Whether that is reliant upon season pass sales is probably more specific to an individual resorts business plan. Vail clearly isn't supporting itself on season pass sales, where if I were a betting man, a place like Black Mtn in NH is, or at least to a much larger extent.
 

thetrailboss

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$400 for full time student isn't bad.

Good point about low/no snow making costs out west.

Yeah but compare that to other options and you see that Stowe is on the high end....and with blackouts the last time I looked.

Sugarbush was $299 for a full pass. Jay was in the same range if not cheaper.
 

cdskier

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Yeah but compare that to other options and you see that Stowe is on the high end....and with blackouts the last time I looked.

Sugarbush was $299 for a full pass. Jay was in the same range if not cheaper.

Just checked and last year SB was $359 for a full access college pass at the early rate. So $400 for Stowe for a college pass isn't bad considering they are more expensive in general anyway (and that college pass appears unrestricted)
 

thetrailboss

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Just checked and last year SB was $359 for a full access college pass at the early rate. So $400 for Stowe for a college pass isn't bad considering they are more expensive in general anyway (and that college pass appears unrestricted)

Really? Wow, they have come up. Is that just the SB pass or the SB/MRG combo? And conversely the Stowe option has held the cost low. Good for them.
 

cdskier

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sugarbush offers a good student pass rate, a $299 for20s pass, and gives out season passes to beginners who complete a 3 lesson sequence.

I don't think any of those factors alone are enough to sway the percentage substantially. K's student rate is similar to SB. Can't say the same for K's version of the For20s pass though as theirs is substantially higher (over $600 I think I saw). I'd be curious to know how many first-timers take advantage of that last option. I suspect it is a relatively low number in the grand scheme of things.

I think it has more to do with the type of people SB attracts in general and their target market. It is just enough out of the way to not be as much of a day-tripper destination as others. I do think things like the Quad-pack have probably shifted that mentality a bit though.
 

cdskier

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Really? Wow, they have come up. Is that just the SB pass or the SB/MRG combo? And conversely the Stowe option has held the cost low. Good for them.

Combo...apparently they only offer the combo at the early rate prior to the November cutoff for the college pass. After Nov, the price last year jumped to $459 for the SB/MRG combo, $419 for SB-only, and $319 for ME-only.
 

Zermatt

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Combo...apparently they only offer the combo at the early rate prior to the November cutoff for the college pass. After Nov, the price last year jumped to $459 for the SB/MRG combo, $419 for SB-only, and $319 for ME-only.

Ok, so how do SB and MRG share the revenue from a combo pass?

Any idea how MAX Pass revenue is shared?
 

yeggous

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Ok, so how do SB and MRG share the revenue from a combo pass?

Any idea how MAX Pass revenue is shared?

I can tell you that White Mountain Super Pass revenue goes entirely to the mountain that sells the pass.


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