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Vail Resort’s “Epic Pass” changed the ski industry when it was first released a decade ago–I would argue, for the better–even though it was directly coupled with massively more expensive day passes (sometimes 2x prior prices). Since it first launched in 2008, the pass has grown, and as a result, the pricing structure became more convoluted, with too many options to choose from. However, their latest update to pricing features a streamlined pricing structure and demonstrates how a well-crafted pricing strategy can evolve over the years.
How does ski pricing work?
You can think of ski pricing like baseball tickets–you can walk up to the window and buy a ticket before the game, or buy a season. The mechanics are quite different, for obvious reasons, and ski resorts rarely sell out. That said the pricing impact is largely similar. However, unlike baseball where buying a season in advance means paying face value for 81 home games, a season ski pass gives you a massive discount. Traditionally, they used to break-even in around 10-12 days of skiing, but Vail changed that concept forever.
What is Vail’s Epic Pass?
For non-skiing pricing (and branding) nerds, an Epic Pass is Vail’s brand of the season pass. When Vail launched its new season pass concept, 10 years ago, they branded it as the “Epic Pass”.
Most skiers refer to their “Epic Pass” rather than their “Season Pass”. That is partly because it is more than a season pass–your traditional season pass worked only at one resort, while Vail’s pass works at multiple resorts and comes with tech benefits like being able to see how many runs or vertical feet you skied. It’s also because the branding is spot on– even my 8-year-old says everything is “epic”, even “jumps” where his skis don’t actually leave the snow.
Like sports, skiing is unpredictable: sometimes there’s snow, sometimes there isn’t. Unlike sports, ski resorts rarely, if ever, sell out–especially the large ones, though the experience does degrade at peak usage (longer lines, less time actually skiing, etc.). Of course, if the snow is bad you can always ski somewhere else. So Vail had several opportunities with its new pass: reduce weather risk, increase off-peak utilization, and capture share of wallet from competitors.
The Epic pass solved for all of these.
First, Vail sold passes at a steep advance discount: the $699 Local Pass breaks even in only 5 days, when compared to purchasing day passes. This created an incentive for people to buy regardless of snow conditions. Nobody knows what Tahoe snow will look like 6 months in advance –the current season isn’t even over yet!
Then, with local and off-peak passes, Vail was able to price weekday and non-holiday skiing explicitly cheaper, so that encouraged locals who might not ski a Vail resort (instead choosing a local, cheaper resort) to choose Vail.
Finally, people used to ski wherever the snow was best or their mood took them. Stowe just got a big storm? Let’s drive up there. Or maybe someone has a cabin at Killington? Fine, that sounds good this weekend instead. If anything, Airbnb added to this as it made it much easier than ever to book a nice, affordable place to stay–before you’d have to go through a real estate rental agency, and the costs were much higher and transactional friction even higher than that.
With the Epic Pass, why would you go somewhere that costs more money? Due to the Vail network, you can even go ski in Japan–it’s included–along with 67 other resorts on their top tier pass. Why go anywhere that isn’t a Vail resort? Don’t think this is an accident.
The secret that made it work
A key part of the equation was nearly doubling the walk up, day-pass rates. Why buy a season pass if you were going to ski less than 12 days it took to break even? Willingness to pay for season passes is somewhat limited–but if you raise the price of the daily ticket, suddenly the same priced season pass breaks even much more quickly. This is all about the company’s pricing preference.
Vail prefers people to book in advance. It locks them into Vail, it locks revenue in before any snow has even fallen. So by raising the price of daily tickets, and lowering it for the Epic Pass –while adding a ton more value to the Epic Pass bundle–you encourage your customer to choose what you prefer. That is, paying well in advance, and doing all their skiing at your resorts.
Why launch the Epic Day Pass?
In this most recent change, Vail launched an Epic Day Pass and consolidated their many season pass options into just 2 simple choices, Epic or Epic Local. In their original pricing strategy, raising daily prices froze out a segment. I will admit to being one of the people who can’t stand spending $140 for a day of skiing. The freedom to spend a few days at this resort, and a few days at that resort, was simply becoming too expensive. In fact,I stopped skiing for a number of years (for my family of 4, a day of walk-up skiing was pushing $500). Even wealthy tourists waking up in their $400 a night condo would think, “Am I really going to do $140 worth of skiing today?” and decide to do something else instead.
The Epic Day pass fixes that. Now you can pay for skiing by the day–in advance, still–at a much more affordable price point. It’s not an inexpensive family activity, but the price dropped from $500/day for that family of 4 to around $300.
Graph Source: 2014 vs 2018 Sierra Snowfall Comparison
What about the rest of the industry?
Competition is real–but like hotels and sports teams, people have real preferences for ski resorts. Personally, I really like Alpine Meadows, Squaw, and Kirkwood (and Kicking Horse! Can’t forget the Canadian Rockies!). Remember, price doesn’t matter if people don’t like your product–and there are some resorts, that even if they gave me a free pass, I probably wouldn’t ever show up to ski. With Kirkwood being on the Epic Pass, suddenly for the segment of 1 (me) Epic looks like a great call.
That means that competing mountains have had to come up with a response, and they have Just last year the Alterra Mountain company, released the Ikon Pass, a collective of 38 global resorts owned by or in partnership with Alterra Mountain–and as a result, the ski industry has changed substantially.
Though the result is eye-wateringly higher prices for day-passes, in the end, consumers benefit dramatically. You could never have skied at any of the 30 resorts included on the Epic Local Pass for $700/year before (that was the advanced purchase price of a Mammoth pass when I lived in LA in 2004-2006). So even though prices went up for daily tickets, consumers benefit on the whole. Including this consumer. Bluebird day over here in Tahoe… it’s going to be #Epic.