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Two Sides to a Rather Complex Resort Marketing, Pricing, and Distribution Coin

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Sometimes the things I write begin with a desire to wrap my brain around a concept that has been rattling between my ears for a while.

This is one of those.

Here’s the thing. Resorts put in a huge amount of effort to lock in revenue early. Not only is cash now better than cash later, but commitments, in the form of reservations and season passes, remove the risks of bad weather, bad seasons, and just bad luck.

Example A: Early-Bookers
Let’s start with a benchmark and use some simple numbers as an example.

We’ll pretend that our goal is to get people to book 5 months in advance. If they do, let’s say the average person pays:

  • Lodging: $300/night
  • Lift Tickets: $70/day

Now, what will motivate them to book so early? Let’s look at just two, key factors:

  • Limited quantities of the product they need (lodging night/room combinations)
  • Future, unknown changes in price

Both of these are powerful tools. For example, price changes are the driving force behind things like season pass deadlines and limited quantities are one of the best ways to create urgency which, in this case, would help drive advanced purchases.

In tandem, those pack a pretty powerful punch which we saw with the initial round of Mountain Collective sales.

Example B: Last-Minute Bookers
Now, according to the data I’ve gathered, if you booked using Example A, and I booked the day before you arrived for the room right next to yours, here’s what I’d pay.

  • Lodging: $200/night
  • Lift Tickets: $78/day

The question we have to ask is what goes on my the mind of a visitor if they know the room they booked for $300 in summer is $200 today. Some last-minute deal sites hide hotel names to avoid this very issues, but if a guest checks prices again or finds out another way, what does that do for their motivation to book in advance the next time?

That guest could assume the resort is filling random combinations of rooms and nights that, like a day-old bakery rack, only discounting can sell. But if the hotel is anything short of packed to the rafters, the game is up.

An Alternative
The more a guest sees these differences in price, the more I’d imagine they will get it into their mind that the rewards of waiting may outweigh the risks. And, slowly, adopt a booking habit that is exactly the opposite of what we want.

But let’s look back at those ticket prices.

See that? skiers who book their lift tickets in advance are paying LESS than those who buy at the last minute. Using set quantities of ticket prices at various pricing tiers, Liftopia has been able to build the urgency of limited quantities AND lower prices to motivate skiers and reward them for booking early.

Can it Work in Lodging?
That’s the question I keep arriving at. Would it need to be an lodging-industry-wide shift in pricing for this to work? Or could a resort train its guests to book earlier through their pricing strategy alone without giving those same guests a reason to go to Snowbird instead of Alta or Myrtle Beach instead of Snowshoe?

I don’t know. And maybe pricing is a bit shortsighted. Perhaps there are other perks a resort can offer (besides perferred inventory and lower prices) to entice skiers to make those reservations a month earlier than they normally would.

Either way, the idea of last-minute discounts may be filling rooms in the short term, but I worry it may be doing more harm than good in the long-term.

About Gregg & SlopeFillers
I've had more first-time visitors lately, so adding a quick "about" section. I started SlopeFillers in 2010 with the simple goal of sharing great resort marketing strategies. Today I run marketing for resort ecommerce and CRM provider Inntopia, my home mountain is the lovely Nordic Valley, and my favorite marketing campaign remains the Ski Utah TV show that sold me on skiing as a kid in the 90s.

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