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How would you run the economics of a ski area?

post #1 of 12
Thread Starter 

The comments (on the first pages) of the recently locked Park City thread were very interesting to me. It seems a lot of people want to have their cake and eat it too in the sense that they want both serious investment in the ski area and also to not have crowds. Some people lamented cheap season passes and high day passes and others praised them. My question is what would be your overall strategy for a fictional mountain for long-term management? 

 

Without trying to make it too complicated you have a variety of options:

 

  • High/medium/low season pass which has an inverse crowding effect 
  • High/medium/low day pass which has an inverse crowding effect

 

Once you have that decided you then need to decide where else to bring in revenue:

 

  • Do you charge for parking?
  • What are food prices like?
  • Rental prices?
  • Lesson prices?
  • On-mountain shops?
  • Lockers?
  • Sustainable real-estate revenue (hotels, rentals, etc.)

 

Now for each revenue source you can invest in the following:

 

  • More employees (Patrol, Liftees, Groomers, Customer Service, etc.)
  • Improve/Replace Lifts
  • Improve/Replace Lodge(s)
  • Improve/Replace snowmaking
  • Improve parking situation

 

It seems to me like a lot of the ideas in that thread involved having cheap season and day passes, low crowds, great cheap parking, improved lifts and lodges, and low food costs plus retaining plenty of staff. That is great if you're running a charity or can run the resort at a loss for years on end, but not so much if you have to run a business. So if you were to create a general plan for your ideal mountain what options would you select?

post #2 of 12

A lot depends on the location where your resort is located.

 

Try playing ski resort tycoon.(free download?) or Amazon appears to have all 3 versions.

 

From my experience with the game, success depends entirely on having an excessive number of bathrooms strategically located. :)

post #3 of 12

If my goal is long-term income, then I would basically run the resort like the bigger ski areas in the Alps, which means low prices and big crowds. It also means that the resort owners aren't in the business of running monopolized ski schools and shops.

 

So for example, if I were in charge of both PC resorts, the first thing I'd do after dropping the barriers between DV and PCMR would be to lower day prices down to about $75, with further discounts for multiday passes.

 

The next thing I'd do is get rid of the resort-run ski schools and open the market to competing companies, charging them rent for office space and maybe a small operating fee. Then, I'd do the same for ski shops and restaurants on the mountain.

 

For real estate, I think I'd focus mostly on companies offering more reasonably priced hotels and rentals. Again, the goal is to get as many people as possible staying as long as they can.

 

As for investments, I think the main focus would be on lifts. Snow making/grooming would be second on the list, and parking would be third.

post #4 of 12

Are you just talking about Park City?

post #5 of 12

Run it like the NFL with their PSLs ...... Thumbs Down

post #6 of 12
Thread Starter 

Not specific to PC no, could be anywhere although let's assume a large mountain that has a significant visitor flow already rather than running some feeder hill in the midwest. 

post #7 of 12
So many outdoor sports are shrinking that preservation of the skier base would be the highest priority.

Affordable tickets and passes are a huge part of that.

A party atmosphere on the hill - I'm not sure how to capture that but the GNAR game at Squaw generates smiles. Note that a good party is somewhat crowded so you want a lot of people on the hill - but long lift lines are horrible (more lift capacity?).

Free or cheap tickets and programs for kids to get them hooked.

A nice village for apres skiing is pretty important but it needs to be viable after all the condos are sold.

The mountain will be there forever. Keeping folks coming to enjoy it has to be the mission of any resort.

Vague responses but every mountain will be different.

Eric
post #8 of 12

On the gondola ride up, fresh trays of salami, rare cheeses, and nigiri are served along with a 2011 Cab sauvignon. Very refreshing between runs. 

On powder days, it becomes cliff bars, fresh fruit and hot chocolate & schnapps. 

There's a keg hidden somewhere on the hill daily, operated by a resort employee who'd be happy to pour a single pint to those of age.

Many open off piste areas be filled with wooden ramps and "pillows" like Baldface in Supernatural. Send it ! 

post #9 of 12

That's a lot to process, but I have a couple of thoughts...

 

-- Definitely relatively cheap lessons, and progressively cheaper the more you take... and big lift ticket/rental discounts if you actually take lessons. 

-- Moderate ticket prices and pass prices, and rentals

-- Probably have to go with expensive lockers and other amenities, and expensive but good food

 

Things like lift improvements and snow-making would depend on location and crowds. 

post #10 of 12

-Stacked below and above ground covered parking for a small fee. Other lots farther out for free. Stacked to save space and have less snow removal work plus a little extra revenue. This might be difficult to do without having some negative effect on the visual aesthetics but I think it could be done pretty good and blend. 

 

-Good food. The typical American lodge food sucks. I would like to stand apart from that. I know it's not exactly cost effective to most areas but I like to think that thinking out side of the box might get peoples attention and create a strong reputation with a loyal following. Possibly a small village area, not overdone but enough for the basics and some variety food/shops/beverages. 

 

-Any on mountain real estate/lodging would be at the base and not half way up the mountain side like at Telluride, Okemo, or Canyons. When I ski I like being in the mountains, not looking at the homes of the rich and famous. I think that ruins the experience. Real estate also depends on your target market and distance from population centers. 

 

-Obvious and well cleared walkways between areas and parking lots. Lighted at night as well if there were a village and lodging. 

 

-On mountain activities other than skiing. Things such as zip lines, playgrounds, large clubhouses/treehouses for kids, ice skating, tubing, and biking in the summer. 

 

-Several small bars/eateries located at other various locations around the mountain with nice views so guests could lazily tour and spend $. A sort of mini Euro experience. 

post #11 of 12
Quote:
Originally Posted by raisingarizona View Post
 

-Any on mountain real estate/lodging would be at the base and not half way up the mountain side like at Telluride, Okemo, or Canyons. When I ski I like being in the mountains, not looking at the homes of the rich and famous. I think that ruins the experience. Real estate also depends on your target market and distance from population centers. 

 

All your points are good.  This one really bothers me.  I want to feel like I'm on a mountain, not a highly engineered real estate development.  Canyons are particularly bad.  Telluride didn't bother me because they're confined to the long but low pitch beginner area IIRC.  

post #12 of 12
Quote:
Originally Posted by goldsbar View Post
 

All your points are good.  This one really bothers me.  I want to feel like I'm on a mountain, not a highly engineered real estate development.  Canyons are particularly bad.  Telluride didn't bother me because they're confined to the long but low pitch beginner area IIRC.  

I understand what you are saying but the Village at T-Ride does bug me. I never rode that lift but if I was there with family or I was a beginner I wouldn't appreciate looking at the development. 

 

I suppose my post has nothing to do with economics though! :) That was just a list of ideas I would like to incorporate at a mountain I was creating. 

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