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November 2010

Hedging Bets

Resorts used deals and pass promotions to lock in business for this season.

Written by Linda Goodspees | 0 comment

In the East, the Farmer’s Almanac is calling for a colder winter than usual. In the west, forecasters are predicting a La Niña of epic proportions. Even economists are lining up to trumpet good news, telling us the Great Recession is over.

But resorts are not taking any chances. After two difficult years of last-minute fire sales, resorts put their best prices out early and often.

“We’re going into the third year of anemic demand,” says Ralf Garrison, director of MTRiP, a travel research program that tracks booking trends across the West. “Resorts have learned they have to dig into their bag of tricks to create demand, since none exists.”

Those tricks include value, price or some combination of the two. But in past years, as reservation lead time shortened, resorts waited to pull out that bag. That created what Garrison calls a “self fulfilling prophecy:” Resorts waiting on guests waiting on resorts to offer them a deal. In the process, the booking window continued to shrink. “Resorts spoiled the destination guest into waiting until the last minute for the best deals,” Garrison says.


Early-Bird Deals

Before summer even ended, resorts put out some great winter deals: 20 percent off lodging rates at Crested Butte for booking before Sept. 13, 30 percent off at Stowe Mountain Lodge for booking before Sept. 30. Even Rock Resorts ran a 96-hour sale in early September, offering rooms at Breckenridge for $79, Keystone $72, and Vail $96.

These time-sensitive offers marketed through social networks like Twitter and Facebook are called “pulsing.” “Pulsing works well with perishable inventory,” Garrison notes. “But it is also one of the culprits of the ‘wait-until-the-last-minute’ phenomenon.”

Although guests are booking later, Garrison says they are actually shopping longer. “In some cases, they are even continuing to shop after making reservations,” he adds. “They keep their search engines on and cancel their reservation if they find a better one.”

Sugarloaf USA, Maine, was trying to encourage visitors to turn off their search engines by offering a guaranteed-lowest-price lodging deal. If visitors booked at least a two-night ski-and-stay package (any dates) by Oct. 15, they were guaranteed the price would not drop lower during the season. And if it does, Sugarloaf will credit them the difference.

“It provides some security for people and encourages them to book early,” says Ethan Austin, communications manager. It seemed to be working, as bookings YTD were up 13 percent, and up 16 percent in revenue.

Elsewhere, it wasn’t clear the early offers were helping. Garrison says bookings at the end of August remained flat with the same point last year. “It’s very early,” he notes. “But so far we have no marketplace data to forecast a better season than last year.”


Pass Promotions

On the season pass front, another early season indicator, prices are flat or down, value is up, and the booking window is getting both earlier and longer. Many resorts try to lock in guests before the previous season even ends, but many are also extending the window on the other end.

At Shawnee Peak, Maine, pass sales are up slightly after the resort extended its pass sale by a couple of weeks. “We had some people telling us, ‘School just started, we’ve got a lot of expenses right now. Can you give us a couple more weeks?’” says Melissa Rock, marketing manager. “We did, and got a few people scurrying under the deadline.” Despite raising prices slightly, sales were up, and Rock was expecting a big response to the area’s three-week night pass sale.

“Last year we sold 1,000 in three weeks,” she says. “We raised the price $20, to $129, but I don’t think it will be a problem, it’s such a good deal. We hear a lot about people being affected by the economy. They can’t do the family pass, but they do the kids’ pass or the night pass.”

Despite some of the best season pass deals anywhere, Colorado skiers, put off by last year’s sparse snowfall (down 26 percent), stayed home in droves. Resorts are once again trying to lure them back with more great pass prices and value. Everybody’s got a deal. “It’s early, but we’re hearing sales are pacing even with last year or above,” Mills says.

Vail’s five-mountain Colorado Pass ($449 before Labor Day) once again set the bar. Copper/Winter Park’s Rocky Mountain Super Pass Plus, with six days at Steamboat, is $469. And Aspen’s new Double Flex Pass ($819) provides two ski days a week, with extra days for $49.

Other Colorado resorts are partnering up, too. Monarch started the trend about six years ago in response to Vail’s Epic Pass. “How could the rest of us compete with that?” asks Greg Ralph, Monarch’s marketing director.

His answer was to add a limited number of free or steeply discounted days at partner areas to Monarch’s $329 pass. Monarch started with 10 partners. Now it’s up to 18, with Revelstoke, Canada, the newest addition (three free ski days and half price lodging). “Passholders love it,” Ralph says. “Partner areas use it as a marketing tool.”

By the end of September, pass sales were running 12 percent over last year’s record. Ralph says early group bookings were up slightly as well. “We’re positioned well for the economy,” he says. “We’re affordable and known for great snow, and our markets are pretty recession-proof.” Indeed: last year was Monarch’s best, up 11.8 percent over the previous year (the area’s third-best season).

Sugarloaf USA also seems to be trending the right way. Despite hiking pass prices slightly for its later deadlines, unit sales are even, and revenue is up 2.9 percent. “We’ve gotten a lot of buzz off our expansion announcement [655 new acres of backcountry terrain],” Austin says.

After refusing for years to discount season passes, calling itself “a premium product for a premium price,” Big Sky, Mont., slashed its unrestricted pass from $1,399 to $799.
“For years, people told us, ‘We love your product, but it’s expensive,’” says Chad Jones, PR manager. “Our numbers were up last year, but we noticed that because of the economy, people were starting to let some things go. This is a way to show we listen to our guests.”

Big Sky cut all of its pass offerings nearly in half, added a new midweek pass (Monday-Thursday, no blackout days) for $699, and a $349 budget pass that gives holders a month at the beginning and end of the season and a week in January.

“Forecasting destination business is tricky because of the shortening booking window,” Jones admits. “People are not calling in September for March reservations, they’re calling in March.”
At Mt. Hood Meadows, Ore., the focus this season is on convenience. Instead of making guests group up in fours to get the best price ($449), Meadows let them buy passes individually for that price, and upgraded its technology to let them renew automatically online. By the end of September, sales had doubled over the best previous year. “Skiers want a good price and they want it conveniently,” says Dave Tragethon, marketing director.

Along with convenience, Mt. Hood is also offering early pass buyers extra value—for every $100 of buying credit they put on their pass, Meadows adds another $25. “We want people to put cash on their pass and get in the habit of stopping to eat in the lodge,” Tragethon says.

At the end of the day, though, all agree that if forecasters are correct, that is what will make the biggest difference.