Subscription skiing
The main moneymaker is selling lift passes, giving access to the mountain slopes, chairlifts and cable cars. The issue for resort owners is that sales of such passes are traditionally volatile, with demand changing on the whims of the weather. If lift pass sales dry up, so do Vail Resort's profits.
That’s why — from a financial perspective — Vail's masterstroke was the introduction of the Epic ski pass in 2008, offering access to an extensive portion of its ever-growing resort network.
That strategy locked in revenue by encouraging skiers to commit to a non-refundable pass before the season commenced. Originally costing $579, the Epic pass quickly became a game-changer for the company, with the more predictable revenue leading to more rapid expansion… and more competition. A similar offering — known as the IKON pass — was also launched by Vail’s competitor Alterra Mountain Company in 2018.
Last year the Epic pass cost $909, and was used by 72% of the resorts' skiers, generating ~$850 million in revenue. That's good for Vail Resorts, and for people who plan their skiing trips well in advance, but not great for anyone booking a last minute trip: on their website, a 2 day lift pass for 2 people next weekend (March 2nd and 3rd) is listed at $1,136.
An added benefit of the subscription model is that the predictable revenues are also helpful in securing financing from lenders, who don’t love the idea of lending to a business that can suffer if the weather is bad.
Snow shortfalls
Of course, short-term spouts of bad weather are one thing, but the industry is also grappling with more permanent challenges from climate change, as ski seasons get shorter. One study covering the 1982 to 2016 ski season revealed that it had been reduced by an average of 34 days across numerous resorts in the US. In the immediate term, snow cannons offer a temporary fix, promising to produce artificial snow that is 50 times harder than its natural counterpart and capable of lasting up to 5 weeks longer. Longer term, one strategy for resorts is to launch their summer activities, such as rafting and mountain biking, earlier in the year. A business for all seasons... and climates.
