When Did American Lift Ticket Prices Get So Stupid?
And What are Vail and Alterra Going to Do About It?
Walk-up single-day lift ticket prices at most destination American ski resorts are stupid. Everybody knows this. Even the people who did it know it. “The biggest area where we feel like we fell short was uncommitted lift tickets,” newly re-appointed Vail Resorts CEO Rob Katz told investors on June’s third-quarter earnings call. “In our minds, that is where we need to take a different marketing approach to be able to compete and compete well in that marketplace.”
Alterra CEO Jared Smith said as much on my podcast two years ago, comparing a large ski area to 50,398-seat Coors Field, where baseball’s Colorado Rockies play homegames:
“On any given day, you can go down to Coors Field and you can buy a $15 ticket to sit in the bleachers and just be part of the game. Or you can spend thousands of dollars to have a premium experience with access to a club that includes all of your food and beverage. … And then everything in between. And I think that is a big learning that you can apply [from] airline industries and some of these other industries. … We're going to have to figure out how to balance that. How do we create more optionality, more flexibility, and provide a more premium experience with more offerings and more things in the package for people who want to pay that? And if we do that right, that should be able to increase that capture and allow us to lower the price for people to enter the sport for the first time. But [right now], the people who come the most, we're going to charge them the least. And the people who we’re trying to get to join for the first time, we're going to charge them the most. That's, to me, it's not a sustainable model, right?”
Since that conversation, peak-day lift tickets at flagship Alterra-owned mountains have leveled off, with Steamboat and Mammoth holding rates steady, and Deer Valley slamming the brakes just shy of the $300 mark. But that pause doesn’t reverse the dramatic rise in day-ticket prices among Alterra’s owned mountains since the company launched the Ikon Pass in 2018. Take a look at the price surges since the 2017-18 ski season (Alterra did not purchase Sugarbush until late 2019).
How unusual are these increases from a historical point of view? Well, in the early years of this century, then-independently-owned Deer Valley’s lift ticket prices mostly paced inflation until around 2008, even as the ski area added five high-speed quads in six years:
Rates ticked toward and past the $100 mark from there, then rocketed 33 percent in 2018-19, Alterra’s first winter of ownership, from $135 the previous season to $180. Walk-up peak-day ticket rates have since surged 121 percent from 2017-18, to $299 last ski season:
Vail of course invented this dumb strategy, and the company has kept the throttle wide open even as Alterra tapped the brakes. Take a look at select Vail-owned mountains’ peak lift ticket rates since 2017-18, the winter before Ikon landed: