There doesn’t seem to be much middle ground in how folks view the Vail Resorts (VR) phenomenon. Hundreds of thousands buy the Epic Pass every year. Others bemoan VR as “corporate skiing” or “Big Skiing”. Our take on it is that the truth usually can be found somewhere in the middle.
There isn’t much new to be said about the Epic Pass or its affect on the industry. It has been an epic success by any set of metrics. Even folks who don’t visit a VR venue now have the MAXpass, Mountain Collective and other multi-resort ticket options and prices have come down for pass products. That makes people who ski a lot, happy.
Many people who utilize a ski area acquired by VR will tell you that VR put a LOT of money into upgrades on everything from lifts to restaurants. The place looks better, the lifts are faster, and there are more customers. Everything is upscale and up-market.
There is more to do and more to see and all of that glam is now available 12 months of the year, Disney Land in mountain-minature. The actual ski experience and the price of the pass is the center for the onion. Every layer you peel through to be there has a price and it is usually not cheap.
The numbers in the snow sport industry have not changed in two decades in a way that is statistically significant. 12 Million participants per year deliver 60 million visits. That’s an average of five visits per participant. The End.
Now that the resort related real estate boom is waning, If you want to grow the bottom line you have to take market share from a competitor. Then you have to find a way to get those same numbers of people to spend more per visit.
The problem with the EpicPass and it’s competitors is that AVERAGE VISIT number…five (5). Many thousands of people use those passes to ski a LOT more than five days per year. Many of these resorts on these passes have insane prices for daily tickets.
Consider this, to hit that average of five visits, for every person with a pass who skis 100 days a season you have to have 24 people who only ski one day a year. And who exactly are those people who only ski once?
They are those people who belong to another interesting statistical grouping. They are part of the 82% who try snow sports once and never come back. Why?
For them the “value proposition” just isn’t cutting it. They paid $200 for a day of trying to hack their way around on the snow, in the snow, scattered all over the snow. Often they flail away on the bunny hill in plain sight of the school. Ever see someone walk out of the school and go over to that potential life long customer and try to close that deal, create a new life long client..Not often.
Only 10% of visit/days result in the sale of a ski school product. For many years, industry surveys reported that “self-perception of low proficiency” was a major reason that people don’t stick with it.
They quit because they suck at it and at $900 per day, lessons are ridiculously expensive.
People DO NOT plan to spend thousands of dollars on their weekends and vacations to go do things they suck at, period. When you consider that proficiency is a major factor in industry growth, you can only scratch your head and move on.
Part of this dynamic is that the lesson industry in general has the same problem with instructors that it has with participants. It is getting harder and harder to find and KEEP new instructors and the attrition in the Boomer generation of instructors is starting to gain momentum.
From the stand point of supply & demand, as the supply of instructors dwindles the price is bound to go up no matter how detrimental that maybe in the long view. But, that is a subject for an entire article so check back here for that.
In a meaningful way, the industry has trouble with growth because it indulges in strategies and tactics too short-term in nature. In effect, these antics indicate a willingness to sacrifice next year’s clients to subsidize this year’s clients. Ski school profits, in the form of high prices and low wages, are more important than long term customer “conversion” and retention.
While the new upholstery at VR resorts is stunning, they are just deck chairs on the same old boat.
To boot, the bigger VR becomes the more likely it will become a political target. In this day and age, people want to revile “Big This” and “Big That”. No doubt, Vail is rapidly becoming the face of “Big Snow Sports”.
While the industry is full of green news and those efforts are laudable, you can’t plan for climate change. No one can accurately predict what the affects might be, or when they will arrive. You just can’t write a business plan around that.
It is far more likely the industry faces something like a “perfect storm” from an unexpected quarter. While the focus seems to be on a looming lack of snow, the greater and more predictable danger from “climate change” for lift served snow sports is a change in political climate.
It is hard to conceive of any other individual recreational sport with a larger carbon footprint. Everyday millions of people pile onto buses and trains and planes and cars and travel to ski. The places they ski consume massive amounts of electricity. Between the lift motors and the millions of twinkling lights for ambiance, the power consumption per participant is monstrous.
Monsters attract attention and VR is rapidly assuming the proportions of Godzilla. VR makes a juicy target for the millions of environmentalists who DO NOT participate in snow sports and who do believe resorts in general to be an environmental blight.
The problem with VR’s size is that before with so many much smaller targets it was hard for anti-ski folks to have any impact. They would have to mount legal attacks on hundreds of individual ski areas. Now, there is one BIG target out there. The threat of the application of both environmental law and regulations, and potential legal attacks based on anti-trust law are real but, a few years down the road.
To top it all off, The National Ski Area Association, and the two labor organizations, PSIA_AASI and the National Ski patrol, share the same address. With VR as the large visible target and the underlining interlocked labor associations the whole thing is based on 19th century Taylorism.
Some VR patrollers have already unionized and a Facebook page calling for the unionization of ski instructors has more than 600 followers. Ski school operational models haven’t change since Arlberg, nearly one hundred years.
Tone deaf to the market, proficiency is offered to the customer with the same philosophy as a candy machine. You walk up, put your money in and pull a handle and ski instructor action-figure falls to the tray.
The only competitive tool that is applied is discounting and packaging. When price is your only tool, it’s tough to make headway. Never one thought is given to redesigning the product. Creating a proficiency product that is designed by the demand side of the market, rather than top down… “Here is what we care to offer, take it or leave it” …products offered over a cash register.
To add to that problem, a growing and significant portion of :lessons: sold are really just day care and the gang of 5 year olds in a group lesson for 4 hours may or may not be there on a voluntary basis.
There are other numbers plying the pistes. They, too, have not changed in a very long time. The numbers of people 24 and younger coming into the sport have been either flat or declining slightly over the last 15 years
Then, people start to quit the sport in their mid to late 30s. Some return years later, others never return. (we will address the various myths surrounding seniors skiing in a future article)
The Silent Generation is all but gone. Boomers are the industry’s only bright spot. Their participation is nearly 20% of the total visits each year. But 10 years from now that bubble of shrinking visits from those less than 24 years old today is going to hit their “core” years at the same time massive numbers of current “seniors” will be”aging-out of snowsports.
In the current vernacular of social justice, Vail Resorts may well be the last bastion of rich, white, male privilege. Skiing has always been white-male dominated. Diversity is a major concern in the years ahead.
How many potential clients are out there who will not become participants for political reasons? Hard to say but the impact of social fashion could do far more damage to the industry than climate change and in a more predictable way.
Snow sports have been in a slump. The fact that profitability may be up is immaterial to the question of whether or not that trend is sustainable. Without a steadily growing total market all this business is really just taking the same old dollars out of some other operator’s pocket and depositing in a VR account. That doesn’t change the demographics in a positive way. It just has them spending the same dollars in a different place.
Add to all that a shrinking middle class, as the blue collar roots of the market slip away and with no successful conversion/retention efforts, and politcial/legal pressure all landing in the same 4-5 year window the failure of such a large enterprise would devastating to the entire industry.
With the Sedentary Generation on the looming horizon, new young participant may be harder and harder to find and keep., how does skiing replace the joy of sitting warmly at home and engaging the world with a smartphone?
For a many years the number of people 24 and under entering the market has been shrinking and beginning in their late 30s people begin to quit the sport all together. Those two issues could combine to produce an unprecedented loss in participation days right smack in the middle of the “core” demographic. Throw in a couple of low-snow winters in the midst of this bubble and it could spell real trouble.
Numbers haven’t changed for 20 years. In this modern world, if you aren’t growing, you are dying. The industry isn’t growing and while Vail has upgraded the deck chairs, is it an industry ship that is quietly, inexorably, sinking?
There will be more to come as we take a deeper dive into some of the issue. SUBSCRIBE and StayTuned!