Poll: The Impact of the Epic Pass

[Harvey]

I changed my vote.

 

[Brownski]

What caused this?

 

[snoloco]

The Epic Pass really breathed new life into a ski industry that was struggling to find its footing after the 2008 meltdown. From the 90s into the early 2000s, at nearly every major resort, real estate was where they were making most of their money. The skiing was meant to drive real estate development. In the span of just a few months, all these resorts lost a massive source of revenue, and their main source of capital. It just crashed and burned, ceased to exist. If you're running a resort, how do you recover from such a shock?

When Vail introduced the Epic Pass, it marked a shift in focus away from real estate. You could instead sell a lot of cheap passes, get people on the mountain, and they might spend on other stuff like food and ski school. It worked. In fact, it worked so well that Vail was able to vastly expand their portfolio of resorts, adding even more value to their Epic Pass. A lot of the resorts they acquired were ones that previously followed the real estate model and got burned in 2008. Unable to do anything other than limp along, they sold to Vail.

The resorts that weren't sold to Vail attempted to band together in different ways to offer new pass products to compete with the Epic Pass. Still, none of these could really go head-to-head with Vail until the Ikon Pass was introduced. That started the current era of the "Pass Wars".

This did have unintended consequences. Since you had a much larger passholder base than before, with a lot more flexibility, the best days of the season tended to get overcrowded. You also can't really price every resort differently, and so you have some that are underpriced and get overwhelmed with skiers.

I don't believe this is entirely due to the passes though, at least in the west. The entire region has seen a lot of population growth in recent years. I'd be willing to bet that this has more of an effect on resort crowding than fly-in guests who mostly book in advance. While they gravitate towards the holiday weeks, they are limited by the amount of lodging available at these resorts.

Oddly enough, the mega pass model has actually resulted in some resorts resuming investments in real estate, as they discovered they needed more lodging and housing in the area, so I guess it all goes full circle.

I don't see the mega passes going anywhere anytime soon. They won't be exactly the same, but they will always exist in some form. For them to go away would mean Vail or Alterra completely dissolving, and their resorts being sold off to independent operators. I don't see that happening.

 

[tirolski]

I changed my vote.
View attachment 15770

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[raisingarizona]

The Epic Pass really breathed new life into a ski industry that was struggling to find its footing after the 2008 meltdown. From the 90s into the early 2000s, at nearly every major resort, real estate was where they were making most of their money. The skiing was meant to drive real estate development. In the span of just a few months, all these resorts lost a massive source of revenue, and their main source of capital. It just crashed and burned, ceased to exist. If you're running a resort, how do you recover from such a shock?

When Vail introduced the Epic Pass, it marked a shift in focus away from real estate. You could instead sell a lot of cheap passes, get people on the mountain, and they might spend on other stuff like food and ski school. It worked. In fact, it worked so well that Vail was able to vastly expand their portfolio of resorts, adding even more value to their Epic Pass. A lot of the resorts they acquired were ones that previously followed the real estate model and got burned in 2008. Unable to do anything other than limp along, they sold to Vail.

The resorts that weren't sold to Vail attempted to band together in different ways to offer new pass products to compete with the Epic Pass. Still, none of these could really go head-to-head with Vail until the Ikon Pass was introduced. That started the current era of the "Pass Wars".

This did have unintended consequences. Since you had a much larger passholder base than before, with a lot more flexibility, the best days of the season tended to get overcrowded. You also can't really price every resort differently, and so you have some that are underpriced and get overwhelmed with skiers.

I don't believe this is entirely due to the passes though, at least in the west. The entire region has seen a lot of population growth in recent years. I'd be willing to bet that this has more of an effect on resort crowding than fly-in guests who mostly book in advance. While they gravitate towards the holiday weeks, they are limited by the amount of lodging available at these resorts.

Oddly enough, the mega pass model has actually resulted in some resorts resuming investments in real estate, as they discovered they needed more lodging and housing in the area, so I guess it all goes full circle.

I don't see the mega passes going anywhere anytime soon. They won't be exactly the same, but they will always exist in some form. For them to go away would mean Vail or Alterra completely dissolving, and their resorts being sold off to independent operators. I don't see that happening.

Excellent insight Sno.

I’d add that social media and the “powder chase” phenomenon has changed the game as well.

And, to beat my drum again, in a way mega passes are probably helping breathe new life into the mom and pop ski areas as weirdos like myself and a lot of others on this sight look for a more quiet, local type ski experience.

Still, I’m not going to love em or what it’s done to some of my favorite mountains but it is what it is.

I’d love to hear Laz’s thoughts on this.

 

[Brownski]

I changed my vote.
View attachment 15770

What caused this?

Also, what was your original vote?

I’d love to hear Laz’s thoughts on this.

Me too actually. I could guess

 

[snoloco]

I’d add that social media and the “powder chase” phenomenon has changed the game as well.

It's certainly increased the number of people who ski and travel in general. Could've happened with or without mega passes.

And, to beat my drum again, in a way mega passes are probably helping breathe new life into the mom and pop ski areas as weirdos like myself and a lot of others on this sight look for a more quiet, local type ski experience.

And a lot of them are having the same problem. Look at Magic for instance having to limit ticket sales. Many of them are on Indy Pass as well. Of course, it's great to see higher skier visits at all resorts, not just the big ones.

As for where the industry goes from here, another trend I'm starting to see is vertical integration of services used for traveling to and from resorts. Vail acquired airport transfer service Colorado Mountain Express a while back and renamed it Epic Mountain Express. Alterra just acquired a ski baggage delivery company. You use these services when traveling, and instead of having to get them through independent providers, the resorts can just offer them themselves.

I also think there's a good case for the west needing more ski areas. Since there really aren't any left to acquire in these regions, if either company wants to build their portfolio, they may need to start from scratch. These major resorts are sometimes worth over a billion dollars, others hundreds of millions. How much ski area can you build for that when starting from scratch? Vail is building 19 new lifts this year. If you do 5 a year for 4 years, that's 20 lifts. It's not unreasonable when you think of it that way. Especially in markets where the existing resorts are bursting at the seams and turning away business.

 

[MarzNC]

Slightly off topic, but related to how Alterra is competing with VR. Alterra just bought Ski Butlers, the fancy gear rental service that brings potential gear to the customer for fitting. What's interesting is that Ski Butlers currently serves Ikon/MCP and Epic resorts in N. America and Europe.

 

[Harvey]

Both epic and covid have helped position Plattekill well, IMO.

My original vote was

"It's not that it is evil just that it's bad."

I still believe that is true.

But recently I decided its bad for the industry overrides it.

I understand that saying that is bs because it's all about skier visits when you include the word industry.

 

[Brownski]

I think some of the bad effects might be masked by the current boom in skier visits. I wonder what will happen if the economy really tanks. If people rule out flying for a big ski vacation, trends might shift back towards choosing one home mountain and sticking with it.