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Why I’m starting to believing more in The Mountain Collective and less in the Epic Pass.

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GREGG
BLANCHARD
   

Last week saw two big headlines come from the pass camps.

Vail dropped a stunner by revealing they’d purchased Whilster/Blackcomb. References to Epic were few and far between relative to other acquisitions, but the move is a clear boost to an already impressive Epic Pass.

Just a day later The Mountain Collective team announced the addition of Telluride and Revelstoke to their product. Whistler/Blackcomb will still be on the pass this year, but the addition will certainly help when they’re gone in 2017.

As I let these two bits of news sink in I found myself (somewhat surprisingly) extremely optimistic about The Mountain Collective and, perhaps for the first time, bearish on Vail’s Epic Pass.

Let me see if I can explain why.

Epic Downsides
I’ve often praised the innovative model that Vail created where season passes were sold to not just to locals, but to destination guests. Who ever thought thousands of people from Chicago would be buying season passes to Vail?

But what TMC is starting to prove is that this model has it’s downsides.

Downside #1) Two Markets, One Product
Vail is essentially selling the exact same product to two very different markets. The first, locals, only buy the pass. The second, destination guests, buy the pass plus lodging and dining and rentals and lots of other things that leave pass revenue in the dust.

The downside is that when you sell the same product to both markets, pricing and product decisions have to be made for EVERYONE rather than what’s best for a specific SEGMENT.

Downside #2) Unlimited Use, Fixed Inventory
All resorts sell unlimited use products, but not all resorts sell them at a volume that exceeds the capacity of any one redemption point. For example, Vail is the flagship brand and namesake of the company. Selling 200,000 new passes with unlimited skiing everywhere will lead to disproportionately higher visits at places like Vail.

Without limits, there aren’t just bottlenecks at popular lifts on the mountain, there are bottlenecks at popular resorts on the pass. It’s like $3.99/mo unlimited web hosting with a dozen sites on the same server. If any one goes viral, the whole thing crumbles. Likewise if the CO and Tahoe both suffer a terrible winter and all Epic travelers end up in Park City.

Downside #3) Growing = Acquiring
In this model, the only way to grow is to acquire new resorts. A partnership with another resort doesn’t give you the ancillary spend that would come from that partnership. You either own one or all.

But acquisitions take time, they take money, they take willing sellers and appeasing locals and trying to repeat patterns in places where patterns may not fit. And acquisitions are based on markets and semi-proven concepts. If those change? You’re stuck.

Enter, TMC
If you think about the Epic Pass as a v2.0 destination product, The Mountain Collective might be v3.0. At every point we see a downside with Vail, we see an upside with TMC.

Downside #1) Two Markets, Two Products
The Mountain Collective is a completely separate product that only makes sense for someone who travels. By its very design, it naturally segments out destination skiers. It sits like another layer above all the traditional marketing a resort was already doing.

Because they are separate, pricing and product decisions can be made based on what’s right for each segment. If TMC was to use their pass as a true loss leader, they can.

Downside #2) Fixed Use, Fixed Inventory
Because there are limits in place that encourage multiple visits to multiple resorts, there is little risk of compressing all passholders into one location at the same time. There is no flagship brand, there is no namesake.

Visits are much more likely to be spread equally among the group.

Downside #3) Growing = Partnering
Because the pass acts as a separate entity that is built to help each resort individually, the pass can grow by adding more individuals through partnerships. These can come together quickly with much less time, almost no money, and no merging of brands or teams or marketing.

It’s the reason TMC (with a tiny team) is adding partners to their pass at double or triple the rate Vail is acquiring resorts (with a massive, corporate team). If destination skier trends or behavior change? Partnerships can be tweaked, rearranged, or dissolved just like that.

One Last Word
I really like where The Mountain Collective is going.

I like that they’re building a destination product that doesn’t rely on one or two key markets for a single resort but can be cast far and wide to benefit the group as a whole. I like that it’s a partnership, not shared ownership, to allow the model to nimbly adapt as skier behaviors change. I like that they are providing a real challenger to the EpicPass without a bank account the size of a small country.

Call me crazy, but the innovative, game-changing EpicPass may have met its match.


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