Idaho Mountain Express: Ski areas look for pricing sweet spot

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Wednesday, September 10, 2008

Ski areas look for pricing sweet spot

Sun Valley remains close to top of most expensive season ticket

By JON DUVAL
Express Staff Writer

In 1978, Randy Hall moved to Ketchum from Los Angeles, thinking he would be a ski bum for a season, and move on. The plan: ski for cheap, work as much as needed to pay for a ski pass.

Thirty years later Hall, now the mayor of Ketchum, is wondering if current lift ticket prices would allow for his kind of story to re-occur.

"The challenges are different now—the cost of living has gone through the roof, largely because of the exponential increases in the real estate market," Hall said. "This has an impact on the quality of life. Whereas people were previously going hiking or fishing or rafting, they now have to spend that time at second or third jobs."

Vibrancy and youth: Hall has bandied these two words about in the quest for revitalizing the streets of downtown Ketchum. They are used as reasons to support events like 48 Straight, the construction of affordable workforce housing and the attraction of new businesses.

But would a Randy Hall of 2008 be willing to pay $2,050 for a season pass to Bald Mountain?

As ski areas across the country are looking at data showing record number of skier visits, they're also setting their lift ticket rates for this winter.

Sun Valley Co. Marketing Director Jack Sibbach said the price of a season ticket is directly correlated to the resort's expenses.

"It's economics—as our costs go up, so do ticket prices," Sibbach said. "We have to take into consideration the cost of fuel and the power to run the mountain. Maybe if we dropped the price we would get a higher skier count, but it wouldn't be enough to make up for the drop in revenue."

However, if last season's skier counts are any indication for the upcoming winter, purchasers of Sun Valley's $2,050 season pass will contribute to a skier count of around 400,000, while other resorts are managing to stay afloat with higher skier counts and lower pass prices.

One of the prime examples is the $579 Epic Pass, which offers unlimited access to Vail, Beaver Creek, Breckenridge, Keystone and Arapahoe Basin, as well as Heavenly Valley in California, with skier counts ranging from 430,897 to 1.6 million for the 2007-08 season.

"The Epic Pass sends a message to anyone who's contemplating being a ski bum, whether it's for a year or three," said Baird Gourlay, owner of Paul Kenny's ski shop in Ketchum and a member of the City Council. "It's hard to consider Sun Valley when it costs more than three times other quality resorts."

Gourlay moved to Ketchum in 1980, soon after graduating from Middlebury College in Vermont, and has since ensconced himself in the community.

"The retail is a real struggle, especially for small, mom-and-pop stores," Gourlay said. "We have to look at who it's competing with—at some point we can't just keep catering to the retired community."

As a solution, Gourlay said that he would like to see a program in which full-time employees in the community are offered a discounted pass.

"Sun Valley gives it's employees passes, but that doesn't help us," Gourlay said.

Of course, the resorts offering the Epic Pass benefit greatly not only from economies of scale, as they are all owned, or once were, by Vail Resorts, but also by their proximity to metropolitan areas.

Though Sun Valley's geography precludes it from taking advantage of easy access, the similarly situated Aspen has implemented a program with its Chamber of Commerce to offer discounts to local employees.

Purchased before Sept. 12, nearly two months after Sun Valley's early purchase discount deadline, an employee of an Aspen chamber member pays $1,299.

"It has been very successful and the majority of local passes are purchased through this chamber program," said Jeff Hanle, a spokesman for Aspen Skiing Company. "It's not something we can take away. If we did, we would likely see our buildings burnt down. It's not only a measure of good will, but it keeps us vibrant."

The program has been around for more than 10 years, Hanle said.

While a cheaper season pass would be far from a panacea for Ketchum's economy and housing woes, it might help take advantage of the surging interest in skiing and snowboarding.

"In order to stay competitive, is this a factor? I think it certainly is, but I know the company looks closely at its prices and has to do what's economically feasible," said Ketchum Mayor Randy Hall. "However, it does make it much harder to attract the type of people that came here in the '70s and '80s."

Prices aside, ski areas saw lots of activity last year.

According to the National Ski Areas Association's 2007-08 End of Season Survey, the U.S. ski industry set a record with a collective 60.5 million visits, up 2.7 percent from the previous record, set in 2005-06.

Sun Valley saw 410,615 skiers and snowboarders take to Bald and Dollar mountains last season, an increase of nearly 50,000 over the previous season, though still well below many of its competitors.

For the upcoming season, the resort is offering a new unrestricted 20-day pass for $800. When purchased in in conjunction with the $180 early/late pass, skiers stand to save over $300 and get in more skiing than allowed by the now-discontinued unlimited 20/20 pass.

However, this might not be enough, according to iconic ski bum Dick Dorworth, a man who once held the title of the "fastest man on skis."

"When I go into the River Run Lodge in the morning, other than the kids working there, I'm often the youngest person there, and I'm almost 70," Dorworth said, only half-joking. "The day of the ski bum is a bygone era here. The skiing on Bald Mountain is still the best, but the culture is not."

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There are 11 comments

The comments below are from the readers of mtexpress.com and in no way represent the views of Express Publishing Inc.

candice – Bellevue, ID

09/16/08 - 11:56

The reality of the situation is that the company simply does not care about the residents here. No working person lives here to ski, we live here because the mountains are beautiful, mountain biking, rock climbing, whitewater action, etc are all at your fingertips, with thankfully little to no cost. Ive only been living here a few years, but Ive seen enough articles like this to know that our communities complaints about the high price of the ski mountain does not make one ounce of difference. Sun Valley Co is not a democracy... and they don't care at all what we think. All comments are falling on deaf ears.

Pedro Gonzales

09/11/08 - 13:40

It is a curious turn in local journalism, this article.
Interesting to use a local person's history to illustrate the point of the increase in lift prices.
Very strange to choose Mayor Randy Hall, a contentious figure at the present time, for this illustration, then to back it up with Baird Gourlay's opinion.
Baird is a city councilman and a businessman whose business runs a sidewalk sale on the new million dollar sidewalk put in by the city.

alex

09/11/08 - 11:32

How many of the now permanent residents started out in Ketchum as a college student taking off winter quarter? I would bet that there aren't that many these days. And if that pattern of coming for a season and staying holds true, we should be concerned. There are plenty of other resorts who entice the youth to join their communities.

denny m. – carlsbad, ca

09/11/08 - 10:37

Bygones Days for sure! i remember being able to help the ski patrol "ski pack" the runs in the morning and for that, ski free the rest of the day!

Anna

09/11/08 - 09:51

Some day check out the system at Mt Hood Meadows on Mt Hood. You purchase the passes in groups of 4, 3 and 2 depending on age. The mounatin selles alot of passes. genates quite abit of income up front yet not everyone is sking. Therefore more money. Granted not the SV hill bit prices of $444 per adult season pass? Regular pass is about $850. Kids under 12 are paying $222. People come up spend more money on the hill ($10 burgers). Meadows draws 500k+ riders per year.

With this pricing they are drawinga younger crowd and building their bottom line while buildinga base for years to come.

By the way they make every effort to buy local becuase those are the people that are sking and supporting the hill the most.

Why is SV move expensive to run that any other ski area? Just asking as the cost run about the same regardless of where you are at. Cannot imagine that they are paying the lifties any more.

C Bradley

09/11/08 - 08:27

That Vail Resorts pass is a heck of a deal. I imagine they'll have skiers from around the country there who wouldn't have made the trip otherwise--spending money and supporting local businesses.
Hey SV Company, how about making the SV Pass good at Snowbasin, and vice versa?

Kat – Hailey

09/10/08 - 21:21

Re subhead: Close to top? Looks like number one to me.

Pedro Gonzales

09/10/08 - 19:53

The Company specifically does not want more skiers on the mountain; they want fewer skiers who pay more for the exclusivity and short lift lines. With the profits from oil, they can do this.
Wealthy retired people with part time residences in this town are this town. If you want a profitable business start a Depends and NYTimes door to door delivery service.
Or you can struggle with the business model of selling booze and bad pizza to kids and not starting bands until 11 pm.

09/10/08 - 19:22

No, I do not think it's possible for "Randy" to do now, in 2008, what he did in 1978. Or anyone else for that matter. I was a later arrival - 1989 - and I heard how the valley "was changing" then. But I couldn't do it 1989 either!

I am no fan of SVCo - and I have personal experience with them (not in the service industry area either) - but I am a business person and understand business. In an area where, for all intents and purposes, the mountain IS the biggest draw for the Valley whether one likes it or not, and in an industry where numbers are declining world-wide, one would think that SVCo would consider a strategy that would entice more business to THEIR mountain rather than price themselves out of the running. (unless, of course, they have a different agenda. . . . ). I would direct those that are looking at revitalizing the Ketchum/SV area or making it more attractive, to an article I found in the Express issue of Dec. 13, 2007 by a Mr. Sterling. It points out exactly some of the reasons people (and businesses) choose other locations. There are no incentives for the people that work in the Valley, work for SVCo - or the incentives are so paltry as to be ineffective. The "livability" factor for the area is practically non-existent now, unless you have a substantial bank-account. The "life-style" that's being promoted is fine if you'r an ex-CEO or something of that nature, but that is a dangerous target audience to depend on, as they are not the infrastructure of the community that keeps it running.
It's quite evident in the fact that it's difficult to get police, fire, hospital, and most of the other types of necessary personnel due to the cost of living. The reduced level of service (which I have experienced in every facet in the Valley) tells people there are serious problems in the community at large.
While this is a community wide-problem - I feel most of the onus falls on SVCo as they really provide very little to the community yet are the biggest takers. My opinion, of course. Unfortunately, unless or until there is a change of ownership or heart, (?) or some catastrophic event (such as a GREAT BIG FIRE), or a catastrophic loss of money (for SVCo) I'm not sure how much change the leaders of the Valley can bring about. As I said, the mountain is the biggest draw. Because of that it has to start there; with the owner/leaseholder, before it can spread out through the community.

Steve

09/10/08 - 10:49

All one has to do is look at the graph of ski area prices to see why Sun Valley, with the most expensive ski pass in the West, lags the rest of the Western resorts in skier days, which is a close measure of tourist visits. Those tourist dollars pay Local Option Taxes and support local businesses.

Sun Valley Company continues to stare at the truth and issue misleading excuses about why they cannot be competitive. Whom do they think believes that the cost to provide a day of skiing at Sun Valley is four times what it is at Vail or 15% more than Aspen (and the Aspen lift pass directly subsidizes their transportation system).

Most, but certainly not all, costs to service a skier day are fixed, whether there are 500 or 5000 skiers on the mountain. It takes about the same number of ski patrolmen, lift operators, and other mountain personnel. It also takes the same amount of electricity to run the lifts and make snow for 500 or 5000 skiers, especially since the electricity is charged at bulk demand rates. Anyone who has stood in line for 10 minutes to get a beer at River Run on a busy spring day knows that Sun Valley doesn’t employ extra locals to meet the demand for service.

The big difference between all the other ski areas that charge less to far less for lift tickets is that those other areas are involved in supporting local businesses in their communities by being competitive in pricing their passes.

Vail’s Epic Pass has created more excitement in the ski industry than all the $1,000 a night hotel rooms that could ever be built in Ketchum. Sure, we can use more hotel rooms but what we really need is competitive and attractive pass prices to attract tourists and revitalize the local community with new residents.

Chris

09/09/08 - 23:17

here's the deal: SVCo (accent on co.) really could not care less about the younger generations. if any of you are actually paying attention, they've done zero for us. Please don't give me any false "examples" like the pavilion or new club house which do NOTHING for those who really run SVCo because if you do actually pay attention, you'll know that the majority do not want, will not pay for, and cannot afford his shiny POLLUTING amenities.
I'm sick of hearing about what 'heroes' jackearlwally are. They're greedy, albeit somewhat intelligent, capitalists who pretend to care about the little guy (who they underpay and underbenefit). Oh yeah, I do not, nor have i ever, worked for the largest polluter in the valley.
If you really do care, guys, show us.