Fox runs Ski Cooper, which was created in 1942 to train the 10th Mountain Division troopers. It hasn’t changed drastically since then. Upgrades come once or twice a decade. Last year’s partial replacement of the resort’s primary and glacially slow lift took seven years of savings. Skier numbers have stuck at 68,000 annually.
About 30 percent of Ski Cooper’s business comes from metropolitan Denver’s 2.3 million inhabitants, the largest concentration of skiers in North America. Yet, getting them to drive the 110 miles to Ski Cooper has become more difficult by the weekend, as his wife, Linda, testified after the Martin Luther King Jr. weekend.
After picking up visitors at Denver International Airport, she fell in with the Saturday-morning skiers. First, she drove past the turnoff to Winter Park, where the buddy pass three years ago launched the Colorado ski industry price wars. This year, Winter Park offered an early bird season’s pass for $150, then tag-teamed with Copper Mountain for a $350 pass, good at either resort.
Next she drove past Loveland, where a $249 season pass was half of what it was several years ago.
Emerging from the Eisenhower Tunnel, she passed the turnoffs for Keystone and Arapaho Basin, then Breckenridge. All three participated in the $299 Colorado Card offered by Vail Resorts Inc. The pass offers unlimited skiing from November until June—plus 10 days at Vail and Beaver Creek. It may be the best deal ever offered to skiing consumers.
Finally, she arrived at Copper Mountain, which is also the turnoff to Ski Cooper, 31 miles away but a world apart. Intrawest-operated Copper Mountain has offered deals left and right. Early in winter, Copper offered four passes for $49 and in late season, bumped it to four tickets for $29.
This holiday weekend, Copper offered two-for-ones. The orange cones placed in the highway assumed that all cars that left Interstate 70, including that being driven by Linda Fox, were going to Copper. Linda Fox estimated it took her 20 minutes to get out of Copper’s parking lots and back onto the highway to Cooper.
“They’re so fat and sassy because of real estate plays, that I’m wondering if they really know what it costs to put a skier on the slope anymore,” Joe Fox fumed after telling that story.
Copper Mountain management admits that skiing is discounted in order to draw more people into the resort’s new $66 million base village. “We’re trying to get people to come test drive this place, kick the tires, and if we can provide them a good experience, we think they will come back to Copper in the future,” explained Ben Friedland, Copper Mountain spokesman.
But it’s not just Cooper vs. Copper. Many smaller ski areas feel like innocent bystanders caught in the crossfire of a gang war. The broader issue is whether they can survive in this war of prices. Nobody yet reports doom, but most are annoyed even as they’ve become more nimble in their own pricing structures.
Jerry Jones, a ski area broker now and former marketing vice president at Vail, Keystone and Snowmass, warns of unintended consequences—to the big ski areas themselves. “What is happening to the little guys is that they are being forced to compete on price, lowing their average lift tickets,” says Jones. “But they have no other profit centers to speak of to make up for the loss in lift ticket revenues. They don’t own hotels. They don’t sell real estate. They don’t have property management companies. They don’t have retail.
“So the price war puts the little guy in grave danger, because not only might he lose his skier visits, but the ones he does get are at a lower price. He has no other means to capture those lost dollars. But the underlying danger is that ultimately, the big ski areas need smaller ski areas to groom new customers,” adds Jones.
Oh yes, the small guys have responded. Ski Cooper slashed its season pass from $185 to $99; volume quadrupled, but residual ticket sales suffered. In February, it offered its own two-for-one deals, but only during mid-week. Still, Fox says he’s losing market share. How many people want to ski 1960s-style Cooper when 21st century Vail is actually cheaper? Not many. Compared to the five-year averages, Cooper’s January skier count was down 15 percent and February 9 percent.
A similar story is told at Loveland. There, the lowest prices ever have produced only so-so volume. “Our heads are still spinning at this point,” says Scott Fortner, marketing director, when asked about the results. Yes, he concedes, Loveland sold more passes after slashing the price, and no, these added season-pass buyers don’t necessarily ski as much. In other words, the drop in skier days may not accurately reflect the financial position of the ski area operators.
Still, Fortner remains unconvinced that the price wars are good for anybody, except temporarily for consumers. “If it was such a wonderful, awesome thing from an industry standpoint,” he asks, “why don’t you see Utah doing it?”
Even ski areas that marginally depend upon Denver-area skiers acknowledge being impacted by the price wars. “We need to rethink the package,” said Tom Jankovsky, general manager of Ski Sunlight, located two and a half hours west of Denver. The metro area comprises 16 percent of his market, but a sleep-ski package, offered for as low as $49, apparently has lost its luster.
Although larger and farther away, Crested Butte has seen Denver-area skiers decline from 9 percent of its customers to 5 percent since the price wars began. Steamboat, among the large areas but three hours from Denver, is unsure of the impact of the price wars. “We’re still trying to get our arms around that question,” said Andy Wirth, vice president for marketing. (He said they expected to have an answer by mid-April). Metropolitan Denver accounts for 15 to 18 percent of Steamboat’s market.
And Monarch ski area, also farther afield from the Denver market, is offering a season pass for $199, but according to GM Rich Moorhead, “Ultimately, it’s going to make it very difficult for small areas to stay in business.” Some 75 percent of Monarch’s revenue is from lift ticket and season passes.
But even ski areas that wax optimistic are doing business differently. Eldora, located 21 miles west of Boulder, has children’s programming and a location close to I-70 that buffer it from the price wars. Eldora representatives attributed their 30 percent skier-day growth in the second year of the price wars largely to good snow.
However, Eldora in March 2000 offered season passes good through the remainder of that season, as well as for the next season. Kari Strong, sales manager, said the goal was to get people to commit to Eldora before the big ski areas offered their deals. This past March, Eldora followed up with a no-limits, completely transferable pass that costs $575. It was good through this past spring and all of next winter.
This season-pass price slashing began three years ago at Bogus Basin, Idaho. Mike Shirley, general manager, says purchasers of discounted passes ski only a third as often as the hard-core skiers who previously were sole purchasers of season passes. Revenue per skier has actually increased. For Bogus, lower prices mean more money.
However, Bogus Basin draws heavily on nearby Boise and has no nearby competition. The low price converted non-skiers into skiers. In Colorado, the prices probably have recruited new skiers, but the larger picture is of resorts battling for market share. A more effective use of marketing money, argues Joe Fox, would be to create new skiers. “I just think their marketing departments are being shallow by going after their neighbors, instead of trying to increase the number of skiers nationally.”
Actually, the larger ski areas have been trying, as never before, to convert never-evers. Vail, for example, began offering three days of lessons, lift tickets and equipment for the price of one. Other resorts have offered similarly attractive deals. The discounts, said Kelly Ladyga from Vail’s marketing department, were a response to complaints from consumers that skiing had become “too elite and too inaccessible for a significant portion of the population.”
Also confusing the story are the abnormally slow-to-start winters during the first two years of the price wars. As Loveland’s Fortner points out, there probably would have been two-for-ones if there hadn’t been buddy passes.
But Marise Cipriani, owner of SolVista Golf and Ski Ranch (formerly Silver Creek), sees a big picture that is unmistakably clear. “As far as skiing is concerned, I think it is totally crazy what they are doing,” says Cipriani, whose family owns Brazil’s largest airline company.
At SolVista, 54 percent of the skiers come from Colorado’s Front Range, although Cipriani believes a strong family orientation and a growing bed base of lower-end real estate will help seal consumer loyalty. Still, she says the deep discounts have done her no good. Low prices suggest the message that Colorado skiing is worth very little, an impression that it will take years to change, she predicts.
At Ski Cooper, Fox likens the big ski areas to a Wal-Mart when it hits a small town. He doesn’t see himself as a target, but rather as incidental. “They’re just finding the easiest way to increase skier numbers without calculating the damage. Ten years from now, if they succeed, they will see the number of skiers drop,” he says.
