Originally Posted by wbroun
I agree, Toad. I keep waiting and waiting and see very few plausible, concrete responses to my question.
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.