Reinforces strategy to boost skier market
By Karen D. Lorentz
Vail Resorts announced an epic decrease in the prices for its 2021-22 season pass products on March 24, a day later than anticipated due to the tragic shootings in Boulder near the company’s corporate headquarters.
The 20% decrease applies to the various iterations of Epic season passes.
A look at the offerings indicates that consumers will benefit, especially families who purchase a number of passes. But perhaps most importantly, there are also implications for the ski industry that are in line with the company’s goal of “Epic for everyone.”
Launched in 2019 with the introduction of the Epic day pass, the initiative was designed to give new and occasional skiers the same value and flexibility offered with a traditional season pass that was purchased in advance of the new ski season.
In 2019 the company announced the acquisition of 17 regional ski resorts located near major metropolitan areas – an effort to provide pass holders the ability to ski or ride close to home and at world-class destination resorts, all on the same pass.
Now the price reset has the potential to boost the skier market as can be seen in the effort that began with the introduction of the Epic pass for the 2008-09 season. Since that time the publically-owned company has grown to become the world’s largest and most successful ski resort company and the stock now trades above $300, despite the challenging 2020-21 season.
Sampling of price reductions
There are a number of pass types from full to midweek to college and military that support the concept of a pass for every pocketbook and skier goal, whether it is to ski locally or around the world, many days or a few. (No deadline for the currently announced prices has been announced as of press time.)
For Mountain Times readers who want to ski or ride close to home, the Northeast Value ($479, down from $599) offers access to company resorts in the East: Stowe, Okemo, and Mt. Snow in Vermont; Mount Sunapee, Attitash, Wildcat and Crotched Mountain, New Hampshire; Hunter, New York; and five areas in Pennsylvania, plus five in the Midwest. This pass offers a limited numbers of days at Stowe and has some holiday exclusions but it also offers teen, senior, and college passes under $400. There’s also a Northeast Midweek Pass ($359) good at the same areas.
The Epic Local Pass, priced at $583 adult, $471 teen (13-18), and $303 child (5-12), offers unlimited access to all of the northeastern resorts plus to western resorts with some holiday blackouts and total-day limits of 10 across Vail, Beaver Creek, and Whistler Blackcomb plus additional days at partner resorts.
The Epic Day Pass has a new, more limited resort offering (good at 29 resorts) but includes all the northeastern resorts and is geared for those who want to ski one-seven days. It offers the same 20% discount with per day rates adjusting to offer lesser cost the more days one skis: one-day $67, seven-days for $57 per day. By contrast, a walk-up day ticket can run over $100 and exceed $200 at some resorts! This pass comes with an option for holiday access at higher rates.
The Epic pass offers unlimited access to 34 North American owned resorts with no blackout dates. Now $783 it includes days at partner resorts throughout the world as well as company-owned areas in Japan.
The permutations of the passes vary but Epic Mountain Rewards repeat with 20% off on-mountain dining, lodging, group ski and ride school lessons, and equipment rentals, etcetera with a variety of discount tickets for friends.
If factoring in inflation, the 2021 passes are actually priced lower than the 2015 rates.
Epic strategy, business goals
Given the current season which has been severely affected by the pandemic, it may seem an odd time for a publicly traded company to cut prices but in a prepared statement Rob Katz, chairman and chief executive officer of Vail Resorts, explained why the strategy of moving people to season passes is the way to go.
“The ski industry, our company and skiers and riders everywhere just navigated the most challenging season we have ever encountered. Because of the growth and loyalty of our pass holders, we were able to ensure this season was a success, with full operations across our 34 North American resorts, even amid a pandemic,” he said.
“Much like in 2008 when we launched the Epic pass, it can be counterintuitive to think that providing value to our guests by lowering prices will also drive value for our company. However, we believe the price reduction will drive incremental revenue, given our comprehensive lineup of pass products that can fit any guest’s needs, our personalized and data-driven marketing efforts, and the fact that the vast majority of all visits from our passes occur at our network of owned and operated resorts.
“We expect that today’s price reductions will generate incremental pass revenue from new unit sales in Fiscal 2022 that will approximately offset any pass revenue lost from the new discount, and we believe that in future years the compounding impact of retaining guests in our program will drive material increases in pass revenue. We have always been clear that advance commitment is one of the core strategies of our company, and our goal is to ultimately have more than 75% of lift revenue come from passes,” Katz said.
It was under Katz’s leadership that Vail Resorts launched the Epic Pass for the 2008-09 season along with the “company’s advance commitment strategy of providing incredible value to skiers and riders in exchange for a commitment ahead of the season,” Danielle Johnson, Vail Resorts director of communications and public relations, wrote in an email to the Mountain Times.
The “advance commitment” strategy refers to a pre-season pass purchase that has typically seen a cutoff date for purchases in November, after which season passes were no longer available. (There also were tiered early-bird dates for the best prices that increased closer to the new season, but last year the prices stayed the same due to the pandemic.)
The Epic pass reset to the 2015/16 season “to honor pass holder loyalty and incentivize all guests to purchase pass products. For the stability and longevity of our industry and sport, we want all skiers and riders to move from lift tickets to pass products. Put simply, no one should have to buy a lift ticket anymore,” Johnson said.
Since 2009, pass prices saw small increases annually but Vail Resorts also grew from 11 resorts to 34 owned and operated resorts in North America and added days at partner resorts in the U.S., France, Austria, Italy, Switzerland, and Japan. A loyalty program of Epic Mountain Rewards was added in 2019-2020.
Value in exchange for an upfront purchase would seem to have caught on with 925,000 Epics sold in 2018 (for 2018-2019 season) up from 750,000 the year before, and 1.4 million passes sold in 2020 despite the pandemic. Company reports note the focus on “the stability” that season pass sales bring in business prediction for lift and other revenues like food, retail, rentals and lodging. Reports also note that by “owning areas in diverse geographic areas, the company creates greater value to its passes but also reduces possibilities of weather or other negative influences; buying successful areas and continuing to improve them; guest-targeted marketing; and increasing the appeal of Epic passes with more areas to choose from and thus building loyalty from guests around the world.”
Asked to address the significance of the new pricing strategy, Johnson said, “This price reset is the latest iteration of our Epic for Everyone commitment to broaden engagement in the sport. We believe the new prices will contribute to the growth and vitality of our sport by taking a step towards making it more accessible to more people. We want to give everyone the opportunity to move to a pass with the best value and more options.”
Pre-season pass sales have been a game changer that has also benefitted Vail Resorts shareholders.
As a public company, Vail Resorts (NYSE: MTN) stock closed at $286.23.81 on March 26 up from its Feb. 7, 1997 debut at $21.25 but down from its 52 week high of $333.95. News reports attributed the fall to the price cut, but analysts also issued a buy rating with one maintaining a $350 price target.
Ramifications for engagement
Johnson added, “This move is targeted at all skiers and riders, and we believe it will contribute to the growth and vitality of our industry and sport. That said, there are many barriers and inequities that have prevented access to the sport for so many and we are on a long-term journey to help address those as well.”
This raises the question of how the price reset will affect the competition and other pass offerings. Will they follow or meet the challenge in other ways, as those behind the Mountain Collective free pass did?
The 2008 introduction of the Epic pass ($579) caused other ski companies to join forces and offer alliances that resulted in collaborative and competitively priced passes like the Max (which morphed into Ikon), Peak (now part of Epic), Powder Alliance, Mountain Collective, Ikon (an Alterra alliance with other companies), and Indy (an independent ski-areas alliance) among others.
It remains to be seen how the competition will respond. While it may follow in some way, the greater likelihood may be that more people will be motivated to enter the sport and the skiers who purchase season passes to their home areas (where they own vacation properties or regularly ski) may simply add a few days or a vacation to a Vail Resorts area.
With the competition offering their own collaborative passes post Epic’s debut, many enthusiasts purchased two season passes and diehards as many as three or four. Epic’s price reduction could grow this market segment.
It could also entice people who have been Ikon multi-resort pass holders to try an Epic Pass as rates are $216 lower for full Epic versus full Ikon. However, if skiers have favorite areas, it may not matter.
One thing is certain, skiers will be studying all the options; and there may be a few more day passes given for gifts to kids and grandkids!