Why Is Skiing So Expensive In The USA? - Page 7

Can't be answered. If you've got $100 bucks in your pocket and a lift ticket costs $70, skiing is expensive. If you've got a million bucks in your pocket, it ain't that much. Depends on one's perspective.

So what we've resorted to is trying to compare today's cost with the historical cost of skiing.

Your question is completely spurious because you make a false assumption.

Skiing is not expensive in the USA; it can clearly be done regularly by those with severely limited means. Therefore, there is no answer to your question.

For example: I bought a $20 ticket to a movie and got four free lift passes. My first set of skis/boots/bindings/poles was less than $250. Just by filling my gas tank I have received several 1/2 price lift tickets, allowing me to ski for as little as $20. I've twice picked up value days that have let me all night (8 hours) for $17.

That's $250 for all the gear, plus $120 for about ten days of skiing.

Hardly expensive if you ask me. Try going on ten 8-hour bowling trips for $120.

wbroun, what exactly is your question?

I don't agree that $79 is expensive just because Doug Sager says so. I don't feel $79 is expensive for 8 hours of entertainment. (And I don't even pay $79.)

If your question is why is the average list price of the 10 US resorts surveyed $38 more than the Italian resorts surveyed, then that question has a better chance of being answered. However, from the article, we have no idea if people actually pay the list prices in either country.

The simple answer is because the US resorts choose to set that price and are obviously happy with the number of patrons who are willing to pay the list price, or whatever discount structure people actually end up paying. US employee wages are higher, benefit costs are higher, insurance costs are higher, and just about every other operational cost is higher, which more than likely is taken into account when setting prices. But, bottom line- the prices asked (and received) are what the market will support.

If the resorts want a higher number of skier visits, they need to change whatever "value" dynamic is limiting visits. If it is price, they might try lowering the price. However, that may pack the lift lines so much that a greater number of people don't return the next year because they refuse to stand in line. Or if price wasn't the reason for not being able to attract more skier visits, then the area immediately loses money from what it would have made before lowering prices. Many a business has gone under thinking that if they just lowered their price they would make more sales. If they don't, then the next thing that happens is laying off employees because that is usually the biggest cost of doing business. Then service suffers and you lose more customers. Then the "ugly spiral" starts until the company is gone.

So, unless you're willing to do a tremendous amount of research and investigation (and still not be given critical information you'll need to determine cost vs. list price), just accept that the resorts are asking what people are willing to pay. If that wasn't the case, the slopes would be empty.

Sometimes marketing is that simple... you do a little research to determine what people are willing to pay for something and then set that as your price. If enough customers are happy with the product and the investors\owners are happy with the profits, then everything is cool. If nobody's happy you have to tweak it until you get it right.

Gear is definitely cheaper. You can spend a lot if you want but the deals that are out there just didn't exist years ago. I worked in nursery in 1969 for $1.25 an hour to get my first race worthy gear...Kneissl Red Stars and Lange Comps retail $180 each, my price from a sponsoring shop $125 each. That was the best deal I could find. This was when at lift ticket at Stowe was under $10

I skied all of 2001-2003 on a used pair of Nordica race boots I got for $50. I tried on some $400 boots but liked these better. I found a similar pair for a friend for $18. I had a nice new pair of skis a few years ago I picked up at Garts with mis-matched serial numbers and some store scuffing for $19.95. I left that big red price sticker on the skis just to remind other skiers how much they over paid for theirs.

The point is that virtually anyone who wants to ski can, through the use of smart shopping, local clubs, gas station deals, traveling movie promos, etc. Revise your original question or it's simply invalid.

I'm poor and can ski. Many of my friends are poor and that doesn't stop any of them. It's not like yachting of all things.

Face up.. your original question was dumb and no amount of covering, backpedaling, or obfuscating the issue will make it an intelligent question.

Oh, and for that matter, a more apt comparison would be tennis.

The fact that you can spend thousands on equipment, training, and court fees doesn't make it an expensive sport.

The fact that it's impossible to be a competetive yachter without a $100,000 yacht makes it an expensive sport.

You can ski with very little money, you can play tennis with very little money, you can golf with very little money, you can bowl with very little money. You can't yacht with very little money. You can't even yacht with moderate amounts of money.

This whole conversation is just dumb.

Sorry, but the answer is not simple and requires a lot of reminiscing and theory. But before I get into that, here's my personal opinion:

Skiing is a luxury service and thus the demand is highly elastic. This means that as you increase price, demand will drop dramatically. (As compared to a necessity like food where people will still need to eat even if the price of food increases) However, the more income people have, the less elastic luxuries become. If you raise the price of skiing on a poor person, that person would stop skiing. But if you raise the price of skiing on a rich person, that person would not care and would still ski. Since the U.S. has lots of rich people, it would make sense that the elasticity of demand for skiing is a lot lower than in poorer nations. Thus ski resorts can get away with higher prices cause people are still willing to come and pay it.

Now for the more comprehensive explanation:

Prices for goods and services (skiing included) can be high for three reasons. One is that the cost of supplying those goods and services is high. The costs of supplying the services of the skiing activity are complicated and are determined by many things (You would have to analyze each item separately [eg the cost of labor, the cost of land, the cost of electricity, cost of machinery, etc]). The second possibility for the high price of skiing is a high profit margin. This is explained by barriers to entry (such as disadvantages of being a smaller startup company, high startup costs, government regulations on land usage, etc). Normally, in a perfectly competetive market, profit margins should be very small since any significant profit would be erased by entry of new firms into the market. However significant profit results if there are barriers that prevent entry and reduce competition. We must look for barriers that are present in the U.S. and not elsewhere. The final reason for high prices is simply differences in demand. If Americans are willing to pay more for skiing, then the prices are going to be high.

I haven't made assumptions about you; you're not helping yourself by making stupid assumptions about me.

wbrown---I just went back and read the very first post here and will answer your question and answer those who are also seeking an answer....The original question after your statement was

How can this be changed ?

There is no need to change anything. (that is the answer)

Skiing is very inexpensive to those who search out the best deals. The Vail Resorts Colorado Pass for example (noted in the link you posted) gives a skiier well over 10,000 acres of skiing for @ $ 350 for the entire season.
A typical season there is about 150 days if you do not include The Basin staying open till July 4 th as they sometimes do. In theory you could ski for $ 2.33 a day

Flip side of the coin----Walk up to the ticket window at Vail on Christmas Week and plunk down your $ 77.00.

Personally my daily ticket price (which after all was the basis of the clipping) is about $ 10.00 /day for 10 days skiing at Vail and the rest of the time (25 days) at Breckenridge and A-Basin. (And before we go back to the distance arguement--I live 1985 miles from Summit County---and yes I am a pass holder.)

Here is the bottom line----This is a case of water seeking it's own level. You can get a daily "ticket" price bewteen $ 2.33 (aprox) and $ 77.00.

(wbrown---Respectfully) That's what makes the link you posted. TOTALLY pointless.

I also find it somewhat comical that you show such concern for the (expensive) cost of skiing yet you reside in CT. One of the most expensive places to live in the Country. Interesting side note, don't you think ?

The only dumb question is the question not asked, and apparently, sarcasm on this thread, however, subtle, is not understood.

It's what the market will bear. Skiing is not unique....many people have more, expect more, and ski areas charge more for a better product. Hotel prices on luxury properties are similar. The Stanford Court hotel in SF that cost $35 for a standard room in the early 70s in now $400 or more. Not a reflection of inflation but demand.

Ski areas can make much more money providing premium services and charging for them than if they just provide basic services in my opinion.

Medmarkco is right that cost is relative to one's income and weath but I think that in absolute terms skiing has gone up. If the demand for skiing had increased prices would have gone up even more. Skier numbers did not increase and the ski industry either had to provide incentives for skiers or cater to those people who don't care what the cost is. Many areas have chosen to upgrade their services and prices to match to attract the more affluent crowd.

What local areas are left still serve the hard core or less wealthy skiing group at a more reasonable cost.

All of this is economics 101 and a reflection of how America is becoming a more polarized nation of wealthy and not. Alan Greenspan addressed this issue a few months ago. Ski areas are catering to where the demand is.

bsimeral sums it up pretty well.

I surely don't know the magic solution that is going to reduce prices, get more people on the hill, not create crowds, and make everyone happy. I know it isn't just a case of expense, because I know a large number of people with whom I've worked over the years who could easily afford to ski at twice the price. However, they have no interest in spending their free time in the cold. Absolutely NO appeal to them. Not going to attract them by lowering prices.

I've tried to set up many a company meeting around a ski event. Always vetoed by the majority who want to go somewhere warm and sit on the beach or play golf. Then the company legal beagles get involved and they start whining about the potential liability I would be exposing the company to. So I give up.

Here's hoping that everyone hits the Powerball!

Consumer ownership. Consumer ownership. Consumer ownership.

I believe there have been many plausible, concrete responses to your initial question. By not acknowledging that, it seems to me you're just trying to stir the pot up a little bit (and succeeding swimmingly). I would start writing my own response, but I wouldn't be adding anything more than has already been written by others. As entertaining as this thread was to read, it's death is probably overdue.

I don't think consumer ownership works particularly well in the ski industry. The exceptions are highly local areas, where the arrangement might more accurately be described as "community ownership." I mentioned a few of them above.

You can probably run a small area with, say, two or four fixed-grip double chairs and a functional base facility (at least if there's not a much nicer place nearby). But once you start getting into bigger amenities, you need too much capital.

A model of consumer ownership that might work (though it's decried above) is something more like a golf club. After all, a great many of the snazziest golf courses are "consumer owned." But that's probably not what you had in mind. Depending how you structure it, you might set up a user-owned ski resort with an "initiation fee" somewhere in the $10,000 - $100,000 range. Say you sold 3,000 membership at $10,000 ... that would raise $30,000,000 gross ... considerably less after expenses of promoting the thing. Right off the bat, it would take a great deal of doing to convince people to buy in to an unproven enterprise, though. And you would need a hefty capital assessment to keep the thing going: replacing lifts and groomers, building new base facilities and up-mountain lodges, etc.

The capital structure would need to be very lightly leveraged, if at all, since debt would presumably need to be non-recourse (unless you really wanted to convince people not to buy in).

I might note that, in a broad sense, a number of resorts are "consumer owned," in that they are owned by public corporations. Anyone who wants to can be a part owner of ASC, for example.

I think you pretty much just described the Yellowstone Club, although the cost is steeper than you suggest. The initiation fee there is $250K plus $16K in annual dues. Before you can even be considered, you must have a net worth north of $3 million and invest at least $2 million in a homesite. I don't think I'll ever be a member.

If you've never worked within a cooperatively structured consumer owned company, then your scepticism is understandable. As it happens, that's what I do for a living (Vermont Electric Cooperative, Inc.) Mad River Glen is a cooperatively owned ski area - and of course non-owners may and do pay for lift tix to ski there. I believe that there may be one or two other such ski areas. In the electric utility business, consumer owned rural electric cooperatives arose (with not insubstantial government help) during the Great Depression to serve rural areas which were not profitable to - and hence, not served by - investor owned utilities (IOU's). Someone, somewhere, perceived a need to do that, and the rest is history.

If necessity is the mother of invention, however, then the few cooperatively owned ski areas will remain - few. There is no pressing perceived need for it. However, should the opportunity arise, and the perceived need is there (as in low cost skiing for lower income skiers), the cooperative model is worth looking at. Frankly, the ski resort business is very taxing. As long as others are willing to invest and risk their treasure, blood, sweat and tears, I'm willing to pony up and ski there.

I will admit that my concern about the availability of lift served skiing to all people regardless of their means is not very strong, any more than my concern for the availability of polo to the masses or NFL football to the small, lightweight and uncoordinated. It is what it is. People who can afford it and want to do it - do it. Those who can find no way to afford it - don't. Those who really, really want to do it and have little means to do so sometimes find ways to make it possible anyway.

It is what it is. I'm not at all sure I understand the concern in the first place.

Now, if you want to talk about the value of expanding the availability of broadband to all, that's another topic. But skiing?

Yeah, but ....

It's already been established that skiing as a lifestyle isn't so terribly expensive. It's skiing as a hobby that gets expensive. You can pay $1200 a NIGHT at many houses in Vail or Breck. And it's difficult for nonlocals to get passes, since you have to be there in person to buy them, and they usually stop selling the cheapest ones before the season starts.

Quitting your job is potentially the most expensive decision of all, right?

The point is that the Colorado Pass and others like it are THEE way to put a serious dent in your lift ticket budget. Break even is around 5-7 days depending on when and where you ski.

True you do have to get the first pass in person.....after that you can renew in the Spring (with other perks) or in the fall, in person, or online.

I have a friend who flew out from NJ to Denver----got a pass---went to the Denver Zoo and flew back to Jersey and now just renews online each fall and joins us for 9 days each Spring more than covering the cost of the pass, and assoicated cost of getting it.

It really comes down to the level of interest in your "hobby". The underlying point of the thread was that skiing isn't cheap in the US......

The quote in post # 202 was a rather extreme case and not exactly meant to be serious. But whether you quit or lost your job or retired or injured and couldn't work----all those options would be "expensive" as your income would be negativly effected.

Yes you can pay (even more than) $ 1200 a night for a house in Vail or Breck---and you could certainly pay $ 77 a day at Vail and a decision by any individual to do that is what makes skiing "expensive".

I ski at Stratton Mountain, probably one of the most expensive ski areas in the US. What's amazing is it has an inelastic economy: the higher the prices go, the more popular it becomes. The costs keep elevating, yet the demand for season tickets, real estate, etc. keep going up.


I own a small condo near there. My kids have gone through the J programs there. We go up as a family( four of us) and derive a great amount of pleasure in our weekend ski retreat. It's costly, but I believe it's worth it.

That's true -- but most people aren't that farsighted!

Agreed -- there are many tricks to cheapening the hobby, but most of those aren't learned until you've already spent a lot of time (and $$) on it.

It wasn't really income I was thinking about. Again, it goes back to choices.

I too was being extreme -- but the point is that a long-term rental will be much less expensive (relatively) than a short term. And where can you find $1200/mo near Vail or Summit County for a house?? Leadville? I'd love to find a half-year rental at that price -- except not in Leadville -- but most smart lessors will go for shorter terms, because the rates are so much higher.

One quick note about Stratton----That was one of our big Spring Ski trips as a kid with my family---our only trip from CT to VT.

I can clearly remember my dad comming back to the car nearly in a rage yelling about the tickets being $ 28.00........$ 28.00 to go skiing-----

So everybody understands the math ---that was 2 adults at $ 10 each and 2 kids at $ 4 each........See it's always been expensive !

(Stratton does have a really good "J" program there)

I rented a nice two bedroom condo in Frisco 2 years ago for $ 1100 a month (6 month rental) and my former roommate stayed there all season and I was out my usual 6 weeks--and a few (mutual) friends went and used my room during the season. There were other deals that were less money in Silverthorne and Dillon. I understand the rental market to be much the same there this year.

Well, you DID say, "a whole house." Which, to me, is different from a 2-br condo. Sorry for the misunderstanding.