Vinny Vincenzo wrote:First to go. The pass program, which to the new owners was a skiing welfare program. Strip down all the negative-profit makers and what's left are the type of customer's that were keeping ASC alive in the first place. The high-margin customer who buoyed ASC's cash flow all along.
ASC made ALL4ONE passes available to the public at prices drastically below market value in a desparate attempt to make debt payments in the off-winter season. ASC sold us passes so cheap that by the end of the season each passholder represented an individual negative profit margin. After five or six visits, not only was a bronze passholder skiing for free, but ASC was actually paying him to ski, compensating him with the services it took to keep the hill up and running.
Park City Resorts sold passes starting August 1st for $1,195. Why should the new bosses change that? The former ASC passholders have developed a false sense of entitlement over the years.
The new Killington doesn't want the former ASC passholder's to walk away. They want them to run.
Not so fast.
They may well revert to a more fixed price system, but the majority of the other mountains in Vermont still have the multi tiered pass offerings.
If someone was considering a $365 or higher pass, they also looked at the MeTicket rates. At 10-12 tickets you got a $57 a day rate. Now the Bronze breaks even at 7 days. Join a ski club. Now the bronze breaks even at 9 days, and you are excluded from 14 of the most desirable days, especially if you have school age children.
For a $619 gold pass, the MeTicket broke even at 11 days, and the ski club breaks even at 15 days. Does Joe Average Skier ski more than 15 days? Does Joe average skier buy his pass in May? If he waited until October, the gold broke even at 13/17 days, respectively.
While the price of a restricted bronze type pass may go up, I don't see why it would disappear. While a few skiers ski 50-70 days on their pass, others ski very few. It's the average that counts, not the exception. In addition, the added cost (marginal cost) to service the pass customer is not that great.
I think the ski area
wants us pass customers to ski more than the break even point, as long as
on the average we buy food, drinks, and bring our friends to ski.
Comments were made about increasing midweek and non holiday business. Restricted pass pricing is one way to accomplish this.
The more you hear about maximizing yield the more choices and types of pricing products they are going to offer us, not less.
While ASC may have underpriced their pass offerings, they also learned a great deal from the experience. If I was buying the mountain, I would certainly include this data in the purchase. They know how many people blew off Meticket days, how many bronze passes were never skied at all, how many days on average each level of pass was skied for the season. This will undoubtably factor into their pass structure this year as they want to retain all of the advantages they learned, and have none of the cash flow pressure to price it lower than necessary. It is instructive that over the 3 year life span of the A41 pass, the prices did not rise significantly. They didn't leave that much on the table, otherwise a short term financing package to cover a summer payment would be more attractive than a too low pass price.
Walk into a large casino. Somewhere, behind the velvet ropes, lies an exclusive high rollers section, where you can always have a table to yourself, they know your name, comps abound, and you need to be recognized to get in. But there is also an ocean of quarter slots, and busloads of blue haired ladies arriving every day. Yield management.
