Tuesday, December 27, 2011

The Holiday Week Pricing vs. Terrain Open Debate

What a tough Christmas week for Maine ski mountains! With limited terrain open and an impending mid-week liquid weather event this is going to hurt the holiday week revenue for sure.

Weather Update: As of 12PM Tuesday - Forecasters are starting to indicate a nice upslope snow event after the liquid precipitation. 2-5 inches maybe more. Possible fast recovery for Maine ski mountains. Fingers crossed!

Ski resorts basically have two weeks that make or break their season. Christmas week and school vacation week in February. Mid-winter weekends are profitable but they need strong holiday weeks to really get into the black on the bottom line.

In some of the ski forums I participate in, there is quite a debate on what resorts should be charging for walk-up lift ticket prices. Most resorts are charging the full holiday rate. From what I could find out from their websites, this is what is happening in Maine:

Pricing and Terrain Open - December 27, 2011


Here are some random questions, thoughts and observations:

  • As a consumer, it is hard to justify purchasing a full-price lift ticket when less than 20% of the mountain is open.
  • I can certainly understand that a ski mountain expense profile does not change if the resort is 100% open or 10% open. They need to turn a profit like any business.
  • It seems like resorts can at least acknowledge the lack of terrain open and knock something off their price... at least 10%. Mt. Abram, Lost Valley and Big Rock are doing this.
  • You often don't have to pay full retail price for lift tickets. See my blog post on how to save money on lift tickets. It is tough to do on a holiday week though.
  • I don't think I will be entering the ski business anytime soon.
  • Maybe the typical vacation week consumer is going to show up no matter what. Perhaps vacation weeks are the only times they will ski all year and they will and expect to pay full price?
  • I am glad I have a season-pass at Saddleback. It totally changes your mindset. If you ski 1/2 day on limited terrain, you feel like it is worth it. When you pay full lift ticket prices for limited terrain, you feel like it is not worth it. It is interesting the psychology of this as it is still money in the end.
  • This type of season last happened in 2007-08 2006-07. It was bad right until February break then it was loads of snow and fantastic skiing right through the end of April.
  • Shawnee Peak has done a remarkable job getting terrain open. We skied there December 26 and their open terrain is legit.  Check out our trip report

Hopefully Winter and Snow will show up soon! What do you think of the Maine ski resort pricing strategy to date? Feel free to comment below.

6 comments:

  1. I am glad I have a season-pass at Saddleback. It totally changes your mindset. If you ski 1/2 day on limited terrain, you feel like it is worth it. When you pay full lift ticket prices for limited terrain, you feel like it is not worth it. It is interesting the psychology of this as it is still money in the end.

    That's our mindset too.

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  2. Good post. I think being charged 100% holiday rate for minimal terrain could be bad for long term repeat business. It will leave a bad taste. 10% off seems more than reasonable and at least shows the resort acknowledges the challenges. No one is expecting 100% open for Christmas week. but less than 20% open at the Loaf for holiday rate is pretty rough.

    Ski areas do have less expense with less terrain open. Less fuel and labor cost on groomers, less electric and labor cost on lifts not running, less labor cost overall because fewer guests show up so the mountain needs less staffing, etc. But obviously most costs are somewhat fixed for this week.

    It was 06-07 that was the last to start this way. 07-08 started quite good with a very snowy December.

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  3. One more thought is that most families up for the holiday week are not paying walk up window rate. They get their tickets included with lodging. So the walk up rate is for the desperate and day trippers, not the vacation crowd. The reasoning obviously is high demand justifies a high price. But from what I saw at Cannon yesterday, there is definitely NOT a high demand this week.

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  4. I'm glad to have a season pass at Sunday River. Although we were blacked out(Silver Pass) yesterday we drove up Sunday night and procceeded to pay the $80 and left satisfied that we got our moneys worth as their conditions were great for the challenges they've endured. Most people are only going to get maybe 20 runs in so 47 open trails was plenty. Fact is we NEEDED to ski and they NEED the revenue this week. Good luck to all of the areas going forward! We love Saddleback as well and can't wait till they get the Kennebago spining!

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  5. Sunday River seemed kind of quiet yesterday. A bar employee stated that it was a big arrival day and that they were fully booked for lodging. We never waited in line at the lifts.

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  6. Thanks for the year correction @Steve. I agree there is a lot more to the resort revenue model than day of walk up sales. I imagine discounting lift tickets will make the people that bought lodging packages grumpy particularly if walk-ups are paying less than what they did. But that can be remedied with food discounts or discount coupons for future visits I would think. Walk-up sales has to be a pretty good chunk of revenue however - particularly on the mountains with no or limited on-mountain lodging.

    Another factor is beginners and intermediates won't ski the whole mountain anyway - but they typically pay full price if they want access to all the lifts when the mountain is fully open.

    I find @Anonymous comments interesting. "We NEEDED to ski and they NEED the revenue this week." Very Loyal Skier! Sunday River does put out a very good early-season product so they can get this type of loyalty out of their patrons.

    A lot of factors in play. The best answer is for Winter to show up!

    Thanks for all the comments everyone. Please keep them coming!

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Hi - thanks for taking the time to comment. Please keep the comments on-point and lets be nice to each other!