The Resort Marketing Rise of the Destination Season Pass

No, I typically don’t watch CNBC, but the stock marketing is a fascinating side of the business world as we’re seeing with Facebook’s IPO. So when a publicly trading ski company, Vail Resorts, appears on a CNBC show to recap the winter, what it might mean for investors, and why they did as well as they did, I take notice and, in this case, take notes.

Here’s the 3 minute interview:

Rob Katz, Vail’s CEO, pointed to two things when it came to their success (defined as only a mid single digit drop in cash flow). First, he mentioned the villages that kept the cash coming in via shops, dining, and lodging. The second, was season passes:

“I think our season passes are critical to our success because they provide tremendous stability going into any particular season and they create tremendous guest loyalty.”

Season passes have typically been designed for locals. As Tim Cohee said in a recent article in the Sierra Sun:

“In the early days of the season pass, the ski area went to the customers, said, ‘Why don’t you pay us up front for the average number of days you will ski — based on our research — and you can ski the rest of the season for free?’”

It’s a way to reward local skiers and lock in early season revenues before a single flake of snow ever hits the slopes. Then, along comes the EpicPass. Instead of access to one resort, it gives a skier access to 8, most of which are world class destinations. Factor in a holiday ticket price of $110+ at some of these mountains, a big focus on lodging and real estate, and suddenly the EpicPass is not only a win for local skiers but destination guests as well. In fact, Rob said that sales come in for the pass from 80 different countries. Think about that, 80…different…countries.

Plus, with resorts spread out over two geographic regions – the rockies and Lake Tahoe – guests also get increased optimism in a bang for their buck: if snow is sparse in Colorado, maybe it will be better in Tahoe and visa-versa.

A Trend or One-Hit-Wonder?
The question I keep asking myself is if this is going to be something only Vail Resorts can pull off or will groups like Intrawest, Boyne, or POWDR try to follow suit? Yes, resorts enjoy pass sales from people in a variety of states and maybe even countries, but is this a neglected group that could be tapped or simply rare exceptions to the rule that can’t be efficiently predicted or reached?

I don’t know, but I’m very interested to see where this goes.