Pricing has always been a big part of many ski resorts’ marketing strategy. Soft weekend ahead? Run a discount promotion. Lock skiers in early? Slash preseason passes. Stimulate demand in a certain demographic segment? Give them their own day and discount.

But exactly how and when to use pricing to drive demand is not an exact science.

“Pricing is a complex dynamic,” says Kirt Zimmer, marketing director at Windham, N.Y. “First, of course, you have to make sure you’re profitable and covering expenses. You have to look at what the market can bear, what people are willing to spend. You’ve got to look at what your competition is doing and where you fit in relative to them. And finally, in a business with as many ups and downs in terms of weather as we have, you have to be careful not to paint yourself into a corner with your price. If you set your rates too aggressively low and the weather is fantastic and demand is high, it’s difficult to raise prices just because the weather is nice. If the weather is bad, it’s difficult to lower prices further to stimulate demand.”

In a highly competitive market like California, what the competition is doing may be more important in setting rates than covering expenses. Just ask Greg Murtha, marketing director at Sugar Bowl, Calif.

“We got dragged into a price war when Alpine Meadows, our biggest competitor, went to a discount strategy,” Murtha says. “We didn’t want to go down that path, but we felt we had no choice.”

Sugar Bowl ran a discount promotion of its own with a local supermarket that attracted 77,000 people the first year. “We saw gains in market share, but it was eroded by the lower yield on each ticket,” Murtha says. “We were considerably under-priced for our product.”

At other resorts the pricing strategy may be just the opposite. “I don’t think there’s a price ceiling for the Aspens and the Vails of the world,” says Greg Ralph, marketing manager at Monarch, Colo. “The fact that you are the highest priced is one way of establishing that you are the best.”

Here’s a look at a few pricing trends.


Preseason Madness
Ever since Bogus Basin, Id., slashed its preseason pass rates by 60 percent in 1998, increasing sales almost tenfold (2,800 to more than 25,000), ski areas have jumped on the preseason pass discount express. The cheap passes help build loyalty and retention, lock skiers in early and provide cash flow during the offseason. They’re also become a major competitive weapon.

“Price is definitely a major part of our strategy,” says Jennifer Johnson, communications manager at Bogus. “We compete for discretionary dollars and time.”

Boyne USA’s Michigan resorts (Boyne Mountain and Boyne Highlands) are also putting a bigger emphasis this year on preseason sales, running a $75 overnight package that includes lifts, lodging and breakfast. The offer was on sale through October 31 and valid for 84 nonholiday dates during the season. “The goal is to get people thinking about winter and get them committed to Boyne early,” says Erin Ernst, PR manager.

Boyne’s new management contracts with Sunday River and Sugarloaf USA in Maine and Loon, N.H., have also boosted preseason pass sales. The passes are valid at all 10 Boyne USA resorts (Big Sky, Mont., Brighton, Utah, Crystal and Snoqualmie, Wash., Cypress Mountain, B.C., and the Michigan and eastern properties). “It’s a huge benefit for Michigan skiers to have access to such a great selection of resorts,” Ernst says.

Combo passes—either within one family of resorts or among unrelated resorts—add value and extend market share. In Vermont, Jay Peak, Mad River Glen and Bolton Valley are teaming to offer a $269 college pass. It is attracting collegians from Montreal to Boston. “Cost is the biggest barrier to entry to this sport,” says Jay Peak marketing manager Steve Wright. “It’s important to put products out there that will get people in the sport and keep them interested.”

Mountain Creek, N.J., is adopting a different strategy: demand pricing. The resort has just two passes, a 7x7 (all day every day), and a 5x7 (all day Monday through Friday, and twilight only Saturday and Sunday). “As a suburban weekend resort, we have two main audiences,” says Shannon McSweeney, PR manager. “Guests who can only come on weekends, and guests who avoid weekends because it’s crowded. ”


Rate Roulette
How much to use pricing to motivate skiers during the season is a tough call.

“Our ticket is our bread and butter,” says Jane Eshbaugh, marketing manager at Holiday Valley, N.Y. “We feel it cheapens our product to discount it.”

“I think people are looking more for value than just price,” says Yves Juneau, sales manager at Mont-Sainte-Anne, Que. “At $70 a day, we know skiing is not a mass market sport. That’s why value is so important. More than discounting.”

“We’re focusing more on locking people in early,” says Ernst. “We feel time is still the biggest barrier for people. No matter how low your rates, people won’t come if they don’t have the time.”

That’s why, at many midwest resorts, three-tier pricing (holiday, weekend, weekday) is still the norm. “Ultimately we’re trying to drive midweek business by making it more affordable,” says Steve Kershner, director of snowsports at Shanty Creek, Mich. “The three-tier strategy has been successful in terms of driving revenue when it’s busy, but only moderately successful in driving business when it’s not busy. Time is still more important than price.”

Manipulating prices too much can actually backfire, says Kershner, creating rate roulette—different skiers paying widely different prices for the same ticket. “The guy who pays more feels he got robbed,” he adds.


Liftopia
Yet areas have more tools than ever to manipulate pricing and demand. One of the newest is Liftopia.com. Modeled after Expedia.com, this web-based ski lift ticket site allows ski areas to set their own price point and ticket inventory. For example, an area can give Liftopia 10 tickets for Jan. 14 to sell at $20 each; 20 tickets for Jan. 15 to sell for $55 each, etc.

“Customers have to purchase a specific day,” says Evan Reece, co-founder of Liftopia. “There are no refunds, no cancellations and no substitutions. The site allows resorts to target demand for slow periods.” Liftopia.com debuted last winter with 7 resorts, and should have about 40 this season, Reece says.


Looney Tunes
The strong Canadian dollar (aka looney) adds a new wrinkle this season for northern U.S. and Canadian resorts. Wright predicts the looney, trading at par with the U.S. greenback, will push Jay Peak’s Canadian market share to 55 percent. Jay has long sold tickets at par to Canadians, and will be offering more retail and food items at par. Wright predicts other U.S. resorts will follow suit.


Integration
In the final analysis, say marketing execs, any pricing strategy should be part of an integrated marketing approach that also includes brand promise, product differentiation and messaging. “You don’t want to sell just on price,” Murtha says. “You want to sell on the merits of your product and build loyalty through the quality of the experience.”