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Do Ski Resorts "Need" to charge 100 bucks a day...and is it ethical or is it price gouging?

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PeppermillReno
Posts: 4751 - Karma: -564
I remember maybe 15 years ago or so as a kid people having contempt for the bigger Ski resorts when lift tickets began to push 50 bucks. Well forget 50 100 is now the new 50.

My internet ads are showing Squaw advertising 4 day passes for 350 bucks. I mean someone buys 4 days and they only get a price break to 88 dollars a day? I know the likes of Heavenly and Vail are 100 bucks or close. I can't imagine a weekend lift ticket at Killington is anything less than 90.


So...there are people here in the industry with the knowledge of the resorts cost of paying lifties 9 bucks an hour, paying for water for snowmaking, paying for lifts etc that think 100 is a fair price?

Are these exorbitant prices really necessary? Could resorts charge 50 bucks again and make a profit with obviously more people skiing?

It seems to me the resorts know that anyone who only skis about or uner 5 days a year will pay whatever so they price gouge and charge 100 bucks a day since someone who skis more than that is likely buy a season pass and your 1/2 trips a year skiers won't stay away just because its 100 and not 70.

This doesn't really effect me either I have the epic pass and its long paid off but I am not going to try out new mountains at these stupid prices. I'd love to do a day at Sugar Bowl for example and see what its like but forget that for 100 bucks.
Dec 22 2012 2:53PM
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BChaps1209
Posts: 1350 - Karma: 2,441
threads... interested
Dec 22 2012 3:04PM
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Coalescent
Posts: 4871 - Karma: 2,063
To run our parks at a small mountain, we are looking at about 200 per shift. 450 max per day. Add in a park set per week that costs 200-300 per set for park staff (doesn't include fuel, our amazing operator). Your looking at about 3,200 a week for a small mountain terrain park operation. In our region, we have days where we will sell 20 lift tickets due to weather.

Our tickets are $64 for a full day lift ticket.

I don't think ticket prices are that outrageous. We have a fairly small department too compared to others on the mountain... (Lifts, office staff, guest services, child care, foods). Currently on the iPhone so I can't see what I posted above. In short, the prices suck, but there are so many costs that go into a resort that ticket prices are going to be high. In short, no, resorts couldn't survive on $50 dollar lift tickets out west. Our pa mountain would then be $20 dollar lift tickets. The ticket prices are compareable to the costs associated with each mountain.
Dec 22 2012 3:09PM
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heFF
Posts: 5786 - Karma: 4,457
I think one thing that has to due largely with increasing lift ticket prices is insurance...To be able to run a ski resort, especially one that offers terrain parks, backcountry access, etc ..have to pay out the ass for insurance so I think that's a huge contributor to lift ticket prices
Dec 22 2012 3:12PM
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baaangthat
Posts: 2245 - Karma: 2,587
go to any ski resort over the next week and tell me its feasible to have more people skiing. uphill capacity is at a max at most large resorts this week and spring break. more people skiing is honestly not an issue. i havent seen numbers for the past 2 seasons, but 2010 was the highest total skier days reported in the US ever. cutting ski area income per guest bye 50$ is one of the worst things they could do.

there are several reasons prices have gone up. you like park? how much insurance do you think they pay for that? like watching xgames pipe? you know that pipe (snowmaking, man hours, cat hours, maintenance of machinery etc etc) costs $4million to build?

lifties making 9$ an hour...sure, some do. cat operators make about double that, ski patrollers, instructors, shop employees, food court people, cooks, yellow jackets, bus drivers, park crew...how many people you think work at breck? 2000?

the truth is most resorts operate in the red anyway, and are doing anything they can to get guests to come, but cutting prices is not something that makes sense for them. go to breck or keystone over break, and yes, its crowded as fuck, but how many people in the park buy day passes anyway? the epic pass costs about as much as 6 day passes, and people riding park are prolly going at least 60 days a year. a huge number of their guests are not a source of income. they dont buy food there, they dont rent, they dont take lessons, they just buy a season pass for 500$ and (unpopular opinion time) financially rape the place.

started rambling, im done..

tl;dr: yoos you're bran moran
Dec 22 2012 3:15PM
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Heart
Posts: 6156 - Karma: 3,462
As everyone else has been saying, running a resort has so many costs associated with it. One of the big ones i dont think anyone has mentioned yet is snowmaking. To coat an acre of land with one foot of manmade snow requires 165,000 gallons of water. There are huge costs for both water and electricity when it comes to producing these massive quantities of snow, plus other expenses such as hourly wages, lift operation, marketing, terrain parks, and chalets
Dec 22 2012 3:39PM
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skicowboy
Posts: 775 - Karma: 873
Worked in Revelstoke, BC for the last 2 years, I remember hearing from our old dmo that it cost approx 10000/day to operate the whole resort. I believe a lift pass was about 75$. And there is no park there because the insurance doesn't cover it and to be honest, Revy is so sick it doesn't need one.
Dec 22 2012 3:41PM
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t_rob
Posts: 6433 - Karma: 11,458
If Vail cut ticket prices by $2.66 last year and held everything else constant, they would have lost money.

Last year Vail resort's made $16.391 million through all of their ventures. This is a huge company. They own 7 of the biggest and most well known resorts in the US.

Vail's "Mountain Revenue" which includes revenues from tickets, ski school, food, retail, etc was $766.608 million.

There were 6.144 million skier visits which is 12% of all skier visits nationally.

An average of $124.77 is spent by customer per skier visit.

For the company to break even*, $122.11 would be spent by customer per skier visit.



You tell me, are they price gouging?




*I cut some corners in this math like assumed fixed taxes. None of that would change the findings much. Call me out on it, I dare you.




Dec 22 2012 3:44PM
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paige.
Posts: 1930 - Karma: 907
I'm pretty sure ski operations in many cases lose resorts money. They depend on things like condo sales to make up for this and keep the whole thing afloat. With the whole financial crisis many resorts have been losing money over the past few years. As much as I dislike paying $100 for a day on the hill, it still beats having the hill shut down.
Dec 22 2012 3:48PM
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pmw
Posts: 5760 - Karma: 829
if this is correct, good god thats a skiing mindfuck
Dec 22 2012 3:56PM
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manutdsaol
Posts: 906 - Karma: 56
It's a business, they can charge whatever they want. If you don't want to pay then you don't have to go, you an go buy a BC setup and a sled. It sucks that they feel the need to gouge us skiers like that, but skiing is expensive, and I bet they aren't making as much profit as you would think. Someone mentioned that they charged $50 a while ago, I bet their expenditures have at least doubled since then with parks, snowmaking costs, high speed lifts, etc.
Dec 22 2012 3:58PM
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manutdsaol
Posts: 906 - Karma: 56
And by gouge, I meant they charge a lot, not that their profit margins are too high.
Dec 22 2012 4:03PM
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grams.
Posts: 7406 - Karma: 186
It's called insurance buddy...all those costs you mentioned definitely pile up, but in the end, insurance companies run these ski resorts.
Dec 22 2012 4:05PM
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eheath
Posts: 61110 - Karma: 118,312
$50 20yrs ago is worth $89 now so yes they do need to charge that much for a ticket
Dec 22 2012 4:07PM
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Static
Posts: 8494 - Karma: 4,068
they're probably cookin' the books on the expenses side
Dec 22 2012 4:09PM
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Nacho+
Posts: 3748 - Karma: 7,791
Well I think it really depends on the size of the mountian and the extra acomidations that they have. If it a really blow up resort like Aspen or PC, then they should charge that much because there are more acomadations than a place like Alta or Powder Mountain
Dec 22 2012 4:10PM
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cmo
Posts: 2325 - Karma: 1,085
talk to the forest service
Dec 22 2012 4:11PM
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PeppermillReno
Posts: 4751 - Karma: -564
Good enough answers here. My thread was basically asking if there is an unfair premium charged to single day users especially since season passes are quite reasonable in comparison but the answers on this thread show the resorts are basically breaking even and the prices are fair.

And I do understand the enormous insurance policies these places need to take out for terrain parks, 2 morons skiing into each other, or a chair lift breaking which must sap up a lot of profit.

I was mentally comparing resorts to sports teams and thinking that they got around the same amount of money per day that an NBA basketball game brings in from ticket sales and basically don't have to pay the help millions.
Dec 22 2012 4:11PM
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Stan_Darsh
Posts: 3057 - Karma: 185
it is very expensive to run a resort. most mountains make hardly any profit and sometimes lose money
Dec 22 2012 4:11PM
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t_rob
Posts: 6433 - Karma: 11,458
It's close enough. That's the best I could do with 5 minutes of work. If I spent an hour or 2, I could tell you a lot more.
It's impossible to separate some of this stuff to tell you what they made and what it costs to operate their bare minimum ski operation. However, a ski resort can't really exist without lodging and a food service. It's all part of the experience.

Dec 22 2012 4:17PM
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mozzy
Posts: 1034 - Karma: 60
The European side of things:

Day passes are cheaper than in the US, you're looking at around ~50 Euro for the more expensive places in the Alps.

Season passes are generally higher priced than in the US, and does not include the variety of locations of say the Vail Resorts Epic Pass.

But, then there's the issue of personal responsibility, you go off-piste in Europe, it's perfectly legal, just don't expect patrol to get you out of a sticky situation. The resorts in the States need to pad those legal costs into their equations. Also less staff in Europe, you don't have multiple lift personnel directing lines and such. And fewer high speed lifts, those cost money too.

For me personally, $100 / day for customers is too much, imho, especially if you're visiting from out of town for a day or two, it's certainly discouraged me from visiting certain resorts. In a way, the pass prices are cheap enough that it effectively keeps you within a resort system, whether it's Intrawest or Vail, etc.




Dec 22 2012 4:19PM
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onenerdykid
Posts: 6638 - Karma: 10,532
My season pass in Europe costs 600€ at full retail and is good at over 20 resorts in the Austrian Alps. A day pass costs about 40€ at most resorts.

When Sugarbush Vermont has their 1950s pricing day (or whatever it's called), they have record sales and turnover.
Dec 22 2012 4:20PM
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freestyler540
Posts: 13046 - Karma: 18,292
If you go to the classiest resort, expect to pay big bucks to get service and quality. Stick to the smaller stuff and its cheaper. Or go touring, its free
Dec 22 2012 4:24PM
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a_burger
Posts: 5206 - Karma: 20,187
OP, ski area are a lot more expensive to run than you think. You are looking at upwards of 20,000 a day sunk into basic things like paying the lifties, instructors, patrollers, etc. Grooming and snowmaking cost a shit-ton.

The reason things cost less back in the older days was there was much less grooming and snowmaking going on, as well as inflation. Not to mention the smaller town run ski areas constantly churned out new skiers to fuel the industry.
Dec 22 2012 4:25PM
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onenerdykid
Posts: 6638 - Karma: 10,532
Most season passes in Europe are super cheap and most resorts spend TONS of money on high speed lifts. My local "small" resort has 2 8-person chairs (on top of normal high speed quads 6-prson chair) and most have heated seats.
Dec 22 2012 4:28PM
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t_rob
Posts: 6433 - Karma: 11,458
Is it a safe guess that euro resorts have a lot less day trippers than the US so more of the money is made in lodging? I think this could account for a lot of the price differences.

I know there's a ton of other differences US vs. EU but I think it might over complicate this.
Dec 22 2012 4:34PM
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onenerdykid
Posts: 6638 - Karma: 10,532
In general, skiing is more a part of this culture than back in the states- more people do it and tourism is huge. But the hotels (in Austria at least) are not owned by the lift companies, it's usually separate. The lift companies measure how many people than can move (about 29,000 per hour) so they can charge less for tickets because they have invested so much in infrastructure
Dec 22 2012 4:43PM
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t_rob
Posts: 6433 - Karma: 11,458
I just found a ticket revenue of $342.5 million in the Vail 10k. Run the same math off of that number instead and we $2.67 decrease that would cause them to lose money. Voila, same answer.

I still think the way I got to it the first time around is the better answer because the mountain experience usually includes the mountain making more money off you than just lift tickets in terms of shitty food, hand warmers, and the lesson for your joey cousins.

Like I said before, it's imposable to separate these revs/expenses completely so it's best to keep the answers as broad as possible.
Dec 22 2012 4:49PM
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EastShoreDrive
Posts: 188 - Karma: 862
Demand is going to play a larger role in price than costs are. The financial people at a resort are going to have a demand curve laid out and they are going to use this to determine the price they charge for a ticket. Their fixed costs are going to be known and they can cut on their variable costs to get within an acceptable margin. They know, based on demand analysis, exactly how many tickets they are going to sell at a certain price. So they know they will sell X number of tickets at $100, Y number of tickets at $90, Z number of tickets at $80, and so on. From here they just need to figure out which price (based on demand) will lead to the largest profit margin. The problem isn't resorts charging too much for a ticket, it is people willing to pay for that ticket. If demand for $100 tickets fell, the resorts would have to lower their prices. Selling 100 $100 tickets is essentially the same as selling 200 $50 tickets. The resorts find a sweet spot where they can charge a high enough price where people are still willing to come out and buy a ticket.

The only way ticket prices will go down is if demand decreases.
Dec 22 2012 4:50PM
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t_rob
Posts: 6433 - Karma: 11,458
Shit. I thought I had a smart thing to say, didn't work. So my next theory is that midweek is a lot better for euro resorts. I doubt some of the US resorts I've been to non-holiday midweek could turn a profit.
Dec 22 2012 4:55PM
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SKIU4EA
Posts: 2387 - Karma: 2,072
Do resorts pay property tax? I've always wondered this. If they do, it must be a giant amount of cash. But then most resorts are on national forrest land so how does that work?
Dec 22 2012 5:15PM
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thejackal1177
Posts: 3434 - Karma: 2,724
http://www.skiblackmountain.com/passes-and-pricing.html

15$ for a day, and its a good mountain. best pow days around.

I think thats proof mountains can operate on smaller funds.
Dec 22 2012 5:20PM
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onenerdykid
Posts: 6638 - Karma: 10,532
This is most likely true given how popular these resorts are with tourists. My roommate is a ski instructor and while weekends are for sure busier, he has lots of lessons mid-week.

A lot of it is simply due to this:

Click for larger image

This is my area, about 10 minutes from my house, and you can ski from town to town (in most cases). Thus, passes work at different (or all) resorts and they really have an awesome system for moving lots of people. You can buy a day pass and bounce from town to town simply by skiing.
Dec 22 2012 5:21PM
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Da-Bull
Posts: 328 - Karma: 247
you pay for what you get
Dec 22 2012 5:21PM
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thejackal1177
Posts: 3434 - Karma: 2,724
not true, you pay big moneu for something you think has alot to offer.  Alot of places put a big price and the people that ski there think because it is expensive it has alot to offer, when it doesnt.
Dec 22 2012 5:28PM
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I_liketobutter
Posts: 2664 - Karma: 997
Official numbers from the inside 3 years ago say that the average big resort makes between 2-5% profit on a lift ticket. So yes, the price is legit. Most of that price goes into insurance.
Dec 22 2012 5:37PM
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DR.SHRED
Posts: 2134 - Karma: 503
it just like every thing else. price goes up with time.... gas,food, living
Dec 22 2012 5:39PM
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landonn
Posts: 2913 - Karma: 385
It sounds like you just took micro. haha But there is nothing about a business being ethical and the price they charge.  It is reasonable to charge any amount that brings them enough customers to keep their business running.
Dec 22 2012 8:08PM
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noparking
Posts: 1123 - Karma: 50
on any given morning we throw over 10k in explosives and that doesn't include the 1-15k in howitzer rounds.
Dec 22 2012 8:27PM
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FUUUCK
Posts: 18426 - Karma: 4,888
Ski hills don't make a lot of money, they charge what they have to.
Dec 22 2012 8:31PM
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SkiBum.
Posts: 3597 - Karma: 3,895
Skiing is expensive. If you don't like it, go hike in the back country and earn your turns.
Dec 22 2012 8:31PM
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noparking
Posts: 1123 - Karma: 50
that being said the place i work at only makes money about 10 days a year maybe up to 15 days if they're lucky during holiday time.
Dec 22 2012 8:33PM
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yourthemannowdog
Posts: 4541 - Karma: 313
That was interesting hearing those numbers and I did not know they operate in the red.
Dec 22 2012 8:55PM
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rockersteez
Posts: 593 - Karma: 1,199
Everything costs more these days. Inflation is a bitch. At the same time they have to pay out a lot of money for insurance, lifts cost money to run, staff...

They could probably make it charging less but it's a business, their goal isn't to break even at the end of the day.
Dec 22 2012 9:11PM
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roddy116
Posts: 10622 - Karma: 7,396
even a small hill like mine costs alot to make, luckily it reuses its water over and over again so it saves some money, but it still costs a fuckton to keep open.
Dec 22 2012 9:15PM
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Bread_Fish
Posts: 760 - Karma: 71
no park tho
Dec 22 2012 10:01PM
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heFF
Posts: 5786 - Karma: 4,457
also not to mention if it hasnt been said yet..way less liability and red tape in europe so insurance costs are probably way lower
Dec 23 2012 12:46AM
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Davin
Posts: 669 - Karma: 354
i do not think it is price gouging what so ever. the money they charge for tickets allows them to just open each day. I feel that most resorts make their money on other business ventures such as condos, hotels, and food.
Dec 23 2012 3:33AM
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Oldmann1584
Posts: 1399 - Karma: 95
look at europe, i was in france (chamonix region) and went skiing for 21 euros yesterday, keep in mind only 75% of the mountain was open HOWEVER a full day lift ticket was only around 30 euros. europe has the right idea.
Dec 23 2012 4:59AM
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GrabsForFun
Posts: 1378 - Karma: 396
I wonder how much the American resorts have to spend to pay lawsuits. I might be wrong but I bet there are a lot of Americans who sue resorts for basicly everything. And that wouldn´t be that big of a problem in Europe, hence lower prices. Obviously not the only reason but I think american lawsuits make up a portion of the difference
Dec 23 2012 5:26AM
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baaangthat
Posts: 2245 - Karma: 2,587
Cool thing about Colorado is it's nearly impossible to sue a resort. Skier Saftey Act protects mountains really really well.
Dec 23 2012 9:48AM
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