Skiing: Not as Expensive as You Might Think Every few years, a media outlet takes a look at the top walk‐up lift ticket prices of the United States’ most expensive ski resorts and proclaims the sport doomed. That’s a little like predicting that people will stop driving because a high‐end sports car can fetch a staggering price, or that people will stop flying to London because a first‐class ticket costs thousands of dollars. It overlooks the fact that very acceptable cars – and ski experiences – can be purchased for much, much less. And in fact, most skiers and snowboarders do exactly that. Oh, and the vast majority of people who fly to London? They’re in coach, paying a fraction of the fare coughed up by the blokes in front. The ride may not be as elegant, but they get to experience the city. Concerns over the cost of skiing have been around since the 1940s. Despite this, the U.S. ski industry has seen three record seasons in the past decade. Further, skiing is actually more affordable to more people today than it was in the 1940s, when the industry was in its infancy. Alpine skiing and snowboarding have never been inexpensive pursuits. But for many people, they’re still affordable – and worth it. What follows will acquaint you with some of the economics of skiing, and some information that explains why the reality of ticket price is different than the perception. UNDERSTANDING TICKET YIELD Ski resort ticket prices are generally posted – and reported in the press – by the lead prices (typically, weekend and midweek rates; sometimes, a separate holiday rate). But comparatively few resort guests actually pay those rates, much the same way that only those few who buy airline tickets shortly before departure pay full price. Page 2
On average, ski areas typically gross only slightly more than 50 percent of the lead ticket price for each day a skier or snowboarder visits a mountain. During the 2012‐2013 ski season, for example, the average walk‐up weekend adult ticket price across the nation was $82.61. But actual gross ticket revenue per skier day, or yield, was only $42.10. What explains the difference? Some of it is accounted for by children’s and senior’s tickets, which sell for a lower price. Some reflects the difference between weekend and midweek rates (at most resorts, midweek pricing is lower). Early and late‐season rates tend to be lower. Resorts also commonly give out a modest percentage of complimentary tickets—in exchange for promotional consideration, in support of charities, or to compensate customers who, for whatever reason, had a bad experience during their visit. But by far, the biggest reason for the difference between the price of a ticket and the revenue it generates for the resort is the fact that most skiers and snowboarders buy their tickets for significantly less than lead price. WAYS THAT SKIERS AND SNOWBOARDERS SAVE Skiers and snowboarders save money in a variety of ways, including online ticket brokers, through resort‐operated loyalty programs, and via pre‐purchase deals. Generally speaking, prices get better the more a skier or snowboarder plans to visit the mountain. Here’s an example. Okemo, a large ski resort in central Vermont, has a lead adult weekend ticket price of $89 for adults (Okemo defines adults as those between the ages of 19 and 64.) Okemo’s lead prices for teenagers (ages 13 to 18) and seniors (65 to 69) are $79, and $69 for juniors (7 to12) and “superseniors” (70+). Midweek walk‐up price in all categories is lower. Online pre‐purchase of a two‐day lift ticket, which can be used on any two continuous days of the ski season, saves the purchaser 10 percent off the listed price. Okemo also offers a Frequent Skier card, which costs $89 for adults. On the first visit, the card holder receives a 10 percent discount on walk‐up price. Visits two and three get a 20 percent discount, and the fourth through sixth visits get a 30 percent discount. The seventh visit is free, which means that a skier using the card on seven weekend days pays a net price of $71.20 per day, including the cost of the card. This represents a 20 percent price reduction from the walk‐
up rate. The deal gets even better on subsequent visits. Every subsequent weekend ticket purchased with the card for the remainder of the season is $53.40, a discount of 40 percent. Page 3
Similar programs are common elsewhere; pre‐purchase and online deals are offered by most ski areas. Some of these are run by the resorts themselves, others use online ticket brokers such as Liftopia.com and GetSkiTickets.com. Snowbird, one of Utah’s most popular resorts, has a $92 daily adult lift ticket price (Snowbird doesn’t offer a midweek price reduction). Purchasing through GetSkTickets.com, core‐season midweek rates are typically less than $74, a 20 percent or better discount. Comparable deals are available at Liftopia.com. Even Aspen, Colorado, which typically boasts one of the highest lift ticket prices in the nation, offers some discounts through Liftopia. It’s still a pricey destination (rack rate: $109), but if you MUST ski Aspen – and for many, it’s a Holy Grail destination – it’s a way to save a bit. The best deals are typically found with season passes. Pass pricing varies by ski area. In regions with few resorts, season passes are typically offered at prices ranging from about $800 to $1,300 for adults. At a ski area with a walk‐up lead price of $90, a $1,000 season pass starts adding a discount to the day rate after the 11th day of skiing or riding. A skier or rider who uses the pass 20 times – fairly typical for a pass holder at many resorts – effectively saves $800 over the course of a season, effectively netting his or her days at a 45 percent discount. But in many parts of the country – including the Lake Tahoe area of California, the Front Range of the Colorado Rockies, and even western Massachusetts – season passes can be purchased for $400 or less if acquired before certain autumn deadlines. Depending upon usage frequency, those participants can ski or ride for less than 30 percent of the walk‐up price. LARGE VS. SMALL RESORT Smaller resorts typically have significantly lower ticket prices than the bigger ones do. They may not have as many amenities or special services, but guests still have a great time. In fact, many families prefer the intimacy of smaller hills. Here’s an example. In Maine, the most popular ski resort is Sunday River, a sprawling complex of lifts and trails that’s one of the biggest resorts in New England as measured by both visits and physical size. Lead adult ticket price at Sunday River is $87. Nine miles away as the crow flies is Mt. Abram, a charming, old‐school ski area with five lifts (two of them are chairlifts), a fine trail network, and a lead adult lift ticket price of $49. (Mt. Abram is typically open only Thursdays through Sundays and school vacation periods, which helps reduce operating costs.) Generally speaking, the larger the resort, the higher the prices. Some of the most upscale resorts price tickets and other services at the top end in part due to their higher operating costs Page 4
and in part to support an aura of exclusivity. They can provide a fantastic experience for those who desire concierge‐level service and have the checkbook to pay for it. But smaller resorts can offer just as just as much fun, and the lower lift ticket pricing isn’t the only savings. Generally, services such as ski school, day care, and food services are cheaper at the smaller ski areas, too. OTHER WAYS PARTICIPANTS SAVE MONEY Resort selection and pre‐purchase of multi‐day ticket products are among the best ways to save, but there are others too. Many ski areas offer an excellent experience in the early and late season, when the number of visitors is lower. Many offer reduced walk‐up prices at those times. If planning to actually stay at or near a ski area, guests can often find good lift‐and‐
lodging packages at certain times of the year. The week before the winter holiday period can be a great time to snag deals, as can the first two weeks of January and late March into April. Staying off‐mountain is another way to save if planning an extended trip (resorts and property owners charge a premium for ski‐in ski‐out access). Nor are guests necessarily forced to use a ski area’s food facilities, which are admittedly more expensive than the local sandwich shop. Many ski areas have space available for brown‐baggers. COMPARISON WITH OTHER TYPES OF RECREATION When people go skiing or snowboarding, they participate for an entire day. Even at $90 per day, skiing and snowboarding compare favorably with other popular recreation options, including:  Golf. This activity actually offers a pretty good comparison to skiing, in that golf courses range from small, unfussy local courses that are comparatively inexpensive (much like smaller ski areas) up to hugely prestigious courses. Compared with the latter category, even the most expensive ski areas are comparatively cheap: greens fees at top courses can approach $500 per round. Certainly, the majority of golfers will never play on those courses, or will do so as a once‐in‐a‐lifetime splurge. That phenomenon is seen with ski resorts, too. But most reasonably high‐quality publicly accessible golf courses charge greens fees roughly equivalent – or slightly higher than – lift tickets, and a round of golf is over in about three hours. Skiing and riding last all day. Equipment costs are comparable, too.  Theme parks. You don’t need much equipment beyond clothing and a camera to visit a theme park, but beyond that the pricing is very similar. One‐day admission to Disney World’s Magic Kingdom is currently $95 for adults (which Disney defines as ages 10 and up) and $89 for kids (ages 3 to 9). Those prices are well above the average 2012‐2013 Page 5
prices for lift tickets – and the price differential for adults and children is typically much more generous at ski areas. As with ski areas, Disney’s rates drop the more days you plan to be there. Universal Studio’s theme park tickets are a few bucks cheaper than Disney’s, but still right up there. Oh, and by the way…people don’t wait anywhere near as long to ride up the lifts and down the mountains as they do in popular theme parks. 
Professional sports. Depending on the team and the game, tickets to major league sporting events can cost well into the hundreds of dollars per person for about three hours’ worth of entertainment. Obviously, not everyone participates in these activities. Some don’t care to, and others simply can’t afford them. That’s the reality: many popular recreational pursuits cost a fair amount of money. Those who find the experience worth the money can – and do – prioritize other expenditures in order to afford the activities. WHY DOES SKIING COST WHAT IT DOES? In an outstanding season, ski areas can be quite profitable, but on average ski areas actually work on profit margins that are quite small compared to those found in other industry sectors. It’s important to remember that ski areas are both capital and labor intensive. Ski lifts, depending upon the type, configuration, and installation challenges, can cost upwards of $10 million. Base lodges, which house a wide variety of services, cost millions of dollars to build (and no small amount to maintain). Snow grooming tractors, which move and recondition the snow each night, start around $300,000 per machine (and go up from there). Grooming the snow is essential for both customer enjoyment and continuing operations. But in addition to being costly to purchase, these machines experience sufficient wear and tear that most ski areas must replace them after five seasons or so. A mid‐sized ski area will typically have five or more such machines, depending on operating conditions. And the labor cost to operate them is significant: grooming operators tend to be highly experienced heavy‐equipment operators with wages to match. With so much capital investment, ski areas obviously want some measure of confidence that they’ll have a product to sell, so many ski areas have made massive investments into snowmaking equipment. Some, such as those in the mid‐Atlantic region and some in the Midwest, are almost entirely dependent upon snowmaking. The equipment itself is expensive, and the energy cost to run those systems is significant. Page 6
Across a given resort, in fact, energy – required to run equipment, heat the base facilities, run the lifts, cook the food and more – is typically the second‐biggest line item on the expense budget, after labor. That’s the biggest single expense, and ski areas require a lot of it: lift and grooming operators, rental shop technicians, food‐and‐beverage staffers, instructors and patrollers, accounting personnel, road maintenance personnel, marketers, snowmakers, IT and administrative support… the list goes on. It takes a lot of people to run a successful ski area, and many of those people trade higher wages found in comparable positions in other industries for the fun of working in the ski business. When you add up all the operating costs, the prices charged for lift tickets begin to make sense. And, when you then consider that at most ski areas, most of that expensive infrastructure sits idle and unproductive for roughly half the year, it becomes very clear why tickets cost what they do. Many ski areas are, in fact, now investing in attractions that will bring people in year‐round. Some of these, such as mountain coasters, can operate throughout the year. A small but growing number of ski areas now operate successful four‐season businesses by adding features such as indoor water parks, golf courses, and other amenities. At even those resorts, though, huge percentages of the capital assets spend more time idle than producing revenue. A resort with a busy summer program might operate 20 lifts in the wintertime, but only need to operate one or two in the off‐season. CHALLENGES GOING FORWARD No one is arguing that alpine skiing and snowboarding are inexpensive activities. They aren’t, nor have they ever been. But when one adjusts for inflation and real growth in disposable income in the United States, snowsports have actually done a remarkable job of keeping prices affordable, and there’s no question that the quality of the ski experience – in terms of snow quality, reliability, and speed of uphill transportation – is far superior to that of the past. There are certainly challenges ahead for the industry. Continued high unemployment rates, especially among people who have historically been in the middle class, are currently coupled with a comparatively stagnant U.S. economy. There’s been a significant decline in well‐paid domestic manufacturing jobs, and these and other factors have produced declines in real purchasing power by the middle class. All of these issues are of significant concern. There are also considerably more recreational options today than there were when skiing exploded in popularity in the 1960s and 1970s. Back then, the cruise lines were almost Page 7
moribund, theme parks hadn’t yet hit their stride (except for Disney), and regulated airline ticket prices kept most people from experiencing tropical destinations. All of that has changed, and leaving price aside, ski areas don’t really compete for the vacation dollar on the basis of price as much as they do the attractiveness of the experiences consumers consider. Many vacation options involve what’s essentially passive entertainment; skiing and snowboarding are active pursuits. Of equal concern is the fact that the skier and snowboarder population, as a whole, is aging. While most of those older skiers and riders can generally afford to participate in the sports, the industry requires younger, new entrants in order to ensure its success well into the future. This presents a marketing challenge, in that a considerable percentage of America’s current young do not have a cultural predisposition to skiing or snowboarding. But that challenge isn’t specifically one of affordability, and the industry is making strides in attracting different demographic groups to the sport. During the 2012‐13 ski season, nearly 40 percent of first‐time visitors were non‐white: 16 percent were African‐Americans, 12 percent were Hispanics, and 11 percent were Asian‐Americans, according to a study by RRC Associates, which tracks economic and demographic data in the snowsports industry. Historically, the vast majority of people who have embraced skiing/snowboarding have made financial tradeoffs in order to enjoy it, perhaps by paring back on vacation experiences at other times of the year in order to participate in the sport they love. That’s why snowsports have proven resilient as activities – and as businesses. The data shows that weather conditions, season‐to‐season, have proven to have a far greater impact on business levels than pricing – and when one considers that the snowsports industry has seen many of its best years in the past decade, despite several poor snow years in some parts of the nation, it becomes clear that for skiers and snowboarders, ticket prices aren’t a dealbreaker. Snowsports aren’t cheap, but for many Americans, they’re worth every penny. # # # THE NATIONAL SKI AREAS ASSOCIATION, LOCATED IN LAKEWOOD, COLO., IS A TRADE ASSOCIATION FORMED IN 1962 FOR SKI AREA OWNERS AND OPERATORS NATIONWIDE