When I'm calling Moooo oooo ooo oooo, ooo ooo ooo
Originally Posted by JohnH
Rusty (the), yeah, yeah, yeah. And did you know our wonderful ski area originally cost $40M to open, back in the 90-91 season? Those original owners sold for about $26M, then the second owners sold for $11M. I realize all the crap about ski school needing to be a cash cow. However, the question then becomes (and this has been debated here a million times), if they paid more for better instructors, and limited lesson sizes, would they get more return business, and would the ski industry grow? And if they paid us more and raised the lesson costs the same, would people not pay the extra $5-$10 bucks (of course they would)? Remember the old days, when our ski area regularly ran 15-18% of all ski area visitors through a ski school program? I wonder what that number is now, and how it has affected the bottom line?
I say, raise the cost of every group lesson $5, and give the $5/head to the instructor. Then, when you get those classes of 20 students (being conservative here), there's an extra $100 in it for you, and not a dime of added cost to the ski area. That's almost worth it.
I heard a different version of the first owner story - no big deal. The point is when you have a bunch of losers losing money, it's hard to see how they would choose a long term approach to solving their problems (i.e. pay more $$$ now in hopes of making money over the long term).
You may recall when Riford tried a bonus plan that kicked in whenever anyone taught more than x hours per pay period. As I recall, the net effect was about a 30% kicker. That rewarded people for showing up AND working, but it was not enough $$$ to change behaviour and was dumped the next season as wayyy too expensive. Last year Sue implemented a bonus for anyone teaching over X students in a 30 day period. I like that approach over a per head basis in the sense that it gives management a financial incentive to limit class sizes while the per head approach more directly encourages pros to take on larger class sizes. I like the per head idea though because it has enough $$$ impact to change behaviour (even at $2/head).
The last #'s I heard were just over 60K lessons and just over 220K visits (I'm not sure how accurate that is - those numbers kind of blur from one season to the next). The numbers have not changed enough over the years to spur more than minor tweaking. The biggest change: the currently named Mountain Passport Program (that sells return visits to first time students) is viewed as successful, even though it had only (roughly) 2K students come back more than once.
I think one of the "problems" at our resort is that management does not get a lot of complaints about ski school lesson quality relative to the praise that they receive. The ones they get about quality tend to be clumped around specific pros. That's viewed as a management problem (work with or get rid of the pro). The ones that are about quantity are the sacred cow problem that they can't solve. Or at least believe that they can't solve. Thus, when lesson quality is not a (perceived) problem, there's not a lot of incentive to fix something that is working.
It is interesting to note that the group lesson prices at our wonderful resort have been raised over the last 5 years (from $20 - $28). My guesstimate is that 1/2 of the increased revenue has been offset by an increase in lesson discounting and that the other 1/2 has essentially been invested in snowmaking. Would spending that money instead on instructor compensation have been a better business decision? I'll concede that this is a legitimate argument. However, I believe that the current investment strategy has a more immediate impact/payback and is therefore a less risky approach. The strategy continues next year with the rental building expansion. It looks like the plan incorporates a focus on improving the first timer experience and significant ski school logistics improvements. My perception is that management is viewing this as a long term improve the "quality of experience to grow business" instead of a short term pay itself off quickly (e.g. tubing) kind of investment.
Raising product prices does have a cost to the business (just ask Harvard Tiger) both directly and indirectly. However, there are those who argue businesses are too averse to the indirect costs. Nonetheless, please find me the overwhelming number of skiers and potential skiers who believe that lift ticket and lesson prices are too cheap and need to be raised. How many non-skiers have you talked to have not taken up the sport because it is too expensive? How many skiers starting families have dropped out, at least partly because of costs?
Another argument against "improving" the group lesson product is that there already is an alternative product offering higher intructor quality and lower class sizes - the private lesson. (ed note: anyone not laughing hysterically at this really needs help). This product also offers the instructor higher pay. The biggest problem with this argument is that it does not apply to "sacred cow" days when privates are limited due to limited instructors.
There is definitely a significant pay difference between East and West. Do we see this drive a lot of instructor movement? For example, do a lot of pros get started out East and then migrate West for higher pay (and better snow too!)? If this was happening, I believe you'd see resort management more open to consider raising pro pay to solve a quantity/quality of instructor problem.