Breaking the $100 barrier
Glenwood Springs, CO Colorado
Aspen Skiing Co. officials say they don’t see a downside from breaking the $100 barrier with a walk-up, single-day lift ticket price even though the national economy is still struggling to recover from the Great Recession.
The Skico raised its peak price to $104 on Presidents Day weekend. That is an 8 percent price hike from the peak of $96 last season – far outpacing the rate of inflation.
Skico Senior Vice President David Perry said the $104 ticket can’t be analyzed without looking at the Skico’s pricing as a whole. “We really want our guests to buy multi-day tickets,” Perry said.
If they do, they will get bigger breaks than ever from the walk-up window price. If a visitor buys a two-day ticket at least seven days in advance, they will pay $91 per day. That saves $13 per day over the peak window price. If they buy a six-day ticket a week in advance, they will pay only $85 per day
“It’s a way of de-emphasizing the single-day ticket,” Perry said. Single-day ticket sales account for about 10 percent of Skico’s ticket sales, but Perry predicts that will drop with the discounts available for multi-day tickets.
At first glance, boosting the single-day price to $104 seems counter to much of the rest of the Skico’s marketing strategy of adding value to travelers’ vacations. The company has heavily promoted packages this season. Some deals add another day of lift tickets and lodging if buyers commit to certain length of stays. Other deals let kids stay and ski free if adults make certain purchases.
Perry said the high walk-up price dovetails into that strategy because it gets consumers looking at the advance tickets, and it encourages them to buy more days of lift tickets because the price break is greater.
The Skico doesn’t mind if people buy more tickets than they end up using. There is a RSVP program, which stands for Return Skier Visit Program. Unused lift tickets can be turned in for future credit but not for cash.
The Skico’s price hike beyond the $100 barrier was unexpected. When the company boosted its price to $99 on Dec. 17, company spokesman Jeff Hanle said that was the “peak” for the season. Skico officials set the peak price last summer and purposely decided not to exceed the $100 barrier, Hanle said at the time.
But Skico cranked up the rate $104 without an announcement. (The pricing is slightly more convoluted. The Skico charges a $5 deposit for its tickets, which are programmed for use with the electronic gates at the chairlift. The tickets can be turned in at the end of a vacation for a $5 refund, or they can be kept for future use and the $5 fee surrendered.) Hanle said the company never sends out a notice about its single-day window price because it feels it gets undue media attention.
Perry said he didn’t realize Hanle had said back in December that $99 would be the peak price. The Skico always reserves the right to increase any of its prices during the season. It is unusual, he acknowledged, for the company to increase its peak price beyond the price set for the holidays.
Hanle said the price hike to $104 was made, in part, because of what Skico’s competition did.
“We do and did set our price last summer based on our own business model,” he said. “Do we keep an eye on the competition? Of course. We would be irresponsible not to.
“Vail went to $108 over the Christmas holidays. We decided to go to $104 shortly before Presidents weekend and made the change that Saturday. So, our price was set at $99 in the summer of 2010. In the early part of 2011 we decided to make a change for business reasons.”
Vail doesn’t give as deep of discounts for advance, multi-day discounts like the Skico does.
Perry said Vail is one of a handful of competitors that the Skico watches. However, he downplayed the significance of competitors’ pricing on Skico decisions. “It would probably be a mistake to over-emphasize” the competitors’ prices, he said.
Perry said there was no concern among Skico officials over a backlash over the pricing. Deep discounts are available with a little advance planning and consumers to destination resorts have likely been expecting the $100 lift ticket price, he said.
Ironically, perhaps, Aspenites were in an uproar in 1987 when the Skico announced a price hike to a $35 single-day lift ticket. An online inflation calculator says $35 in 1987 has the same buying power as $67.85 in 2011, so lift ticket prices for the Skico have tracked well ahead of the national inflation rate over the last quarter century.
“It’s been looming there for a long time,” Perry said of the $100 lift ticket. The $100 barrier would have been cracked sooner “if the recession hadn’t hit,” he said.
The $104 ticket has gotten little media attention and “not one negative guest comment,” Perry said.
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