Feb 27, 2025
Vail,
Colorado
As I was thinking over what to write about this week, I perused what I wrote last year at this time. I came to the conclusion that this story is still valid and useful.
Enjoy! – Hugh
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Feb 25-24 | Vail, Co.
“Must be nice to be able to afford to share the slopes with all those celebrities.”
(Can’t read the full email – click here for the online version.)
We sometimes get
this kind of comment whenever we venture here for a week or two of skiing. And with a posted price of $299 for a day lift ticket – one can be forgiven for thinking that this area is only for the rich and famous.
Vail likes to paint itself as The Place to visit.
Promotions will feature luxurious hotels, epic powder as far as the eye can see, and more designer ski gear than you
can shake a stick at.
Plus, there plenty of swanky shops and gourmet eateries to top off its world-class ski slopes and facilities to make it a mecca for the wealthy and fabulous who crave the best of the best.
And since much of “skiing” is about what we call après-ski, Vail has all the high-end establishments anyone could wish for when they want
to be seen about town.
Obviously, there is more to the story.
If you were to visit, you’d see plenty of “plebes” sliding around to know that the business model isn’t focused primarily on the top 0.1%.
In fact, the company sold over 2.4 million passes for the 2023-24 season!
That’s up 83% over 2019. Not bad for a company that made over $2.4 Billion in revenue in 2022.
Much of this growth is due in part to a particular pricing strategy.
They sell multi-resort season passes at a huge discount. Meaning, a regular skier or boarder could
“break-even” with as few as 3 skier visits. Just over half will do 6 or more.
For us, I calculate that by season’s end, our cost to ski per day will work out to something between $40 and $50 a day. How many first-class activities can you do for so little money. Not that many.
If it’s such a good deal for the user, even an average user, why do they
offer such a deal? Wouldn’t they be better off charging a lot more and have fewer customers to deal with?
After all, I’ve recommended that strategy before.
They’ve followed this strategy because lift passes are only one side of the story.
- Because
these are sold in advance, only, the company can generate significant cashflow to fund their operations in the off-season.
- They can “lock-in” visits for the upcoming season. This is important since they cannot forecast the weather. This helps lessen their reliance on good snow.
- They can greatly increase the average spend per visitor. In fact, I’ve written extensively on this very topic. One of the easiest and best ways to increase profits is to increase the average spend per customer. Vail has discovered that season pass holder spend 55% more on average than daily ticket holders.
This spend is on lodging, dining, retail and excursions.
- The resorts and villages can attract more and better retailers (due to expected visits), which in turn attract the visitors. In the travel business – it is a well-known fact now that the number 1 activity of
all travelers is – shopping.
Yes! An area will not attract many visitors if it does not have enough shops and restaurants to cater to them. Vail’s pricing strategy ensures plenty of visitors – thus attracting a plethora of vendors.
Vail has basically taken the strategy of a “loss-leader”, like greatly
discounted milk at a grocery store to a new and better level.
I have an entire section on how you might do this inside my new Business Academy. You can become a member right now, at 70% off. Click here now and use code: MAR70.
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Until next week,
Stay healthy and focus on profit!
- Hugh
The “Profit Accelerator” Expert
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