“Mindlessly simple and mindlessly cheap,” is how General Manager Mike Shirley describes the new season pass program at Bogus Basin, Idaho. Season passes for 1998-99 went on sale last March, reduced from $550 to $199 for skiers aged 12 to 69. By the end of July, 95 percent of the lift revenue budget for 1998-99 was already in the bank—exceeding the previous lift revenue record by $100,000—before a single day ticket was sold.
Skier visits at Bogus had reached a plateau, says Shirley, even though the population in nearby Boise had doubled in the past 20 years—a population of whom 15 percent call themselves skiers or boarders, which is nearly double the national average. At the same time, the season passholder base had been slowly eroding to an average of 4,000 passes per year, as the price rose to a high of $550. Making matters worse, a variety of discount programs had caused the yield per skier visit to drop, but Shirley said that it had been impossible to make the skiing public fully aware of the deals that were offered due to the complexity of the pricing structure.
Management needed a way to bring local skiers back. Rather than confuse matters further by introducing even more discounts, Shirley examined the simple, low-cost pricing models of companies ranging from Spirit Mountain, Minn., and Alta, Utah, to Southwest Airlines and Costco warehouse stores. Eventually, he began looking at making season passes the sole discount program at the resort.
The proposal Shirley put before the Bogus Basin board of directors in February was to eliminate the other discount programs and implement a simplified, reduced season pass price structure for 1998-99 passes. After hashing over various price levels, the following strategy was accepted: Season passes for skiers aged 12 to 69 sell for a flat $199. For children aged seven to 12, a season pass costs $29. Skiers under six or over 70 years old ski free. Finally, a price ceiling was set at $800 for families, regardless of the number of children. Passes for the 1998-99 season, which went on sale in mid-March, were also valid for spring skiing at the end of the 1997-98 season. The deal ended May 31 (the deadline for current passholders was extended to July 31).
Local media got wind of the proposal in February while the board was in discussions. After a front-page story in the Idaho Statesman announced the possibility of such a program to the public, “cards, letters and e-mail came pouring in” in support of a reduced season pass price, says Shirley. “We backed into a February promotion program in support of a March sale.”
Once the program was officially announced, Shirley says, long lines formed at the downtown sales office. After the final July deadline, almost 19,000 regular season passes had been sold, in addition to 4,400 children’s passes. Over 1,600 free passes were given to young children and seniors, for a total of close to 25,000 season passes, compared to 2,854 last year.
One of the greatest shifts has been in the number of skiers returning to the sport, according to Shirley. In the ongoing industry debate over whether it is the increasing price of skiing or decreasing leisure time that is preventing people from hitting the slopes, Bogus Basin weighs in heavily on the side of price.
Shirley says their current market research confirms suspicions previously raised by anecdotal evidence: that skiers—particularly young families—simply had been priced out of the sport. And though consumers do have less and less leisure time, he says, it is still the rising price tag that is the root of the problem because skiing is not perceived to be a good value when skiers compare the price they would pay to the time they expect to have available to do it.
One unexpected side-effect, says Shirley, was that “the new pricing strategy blew the doors off end-of-season clearance sales at local ski and snowboard shops.” Apparently, skiers returning to the sport hit the sales to replace outdated gear while they could still take advantage of their new passes for end-of-season skiing.
Shirley addressed a number of potential financial downsides in pitching the idea to the board—selling too few season passes, selling too many season passes—but all seemed to be answered by the strategy of selling low-priced passes late in the preceding season. Now that the passes have had such resounding success, the only real concern remaining is the risk of overcrowding certain “choke points” on the mountain, though actual on-mountain capacity leaves plenty of room. However, Shirley points out, “It will be hard to meaningfully address the capacity issues that do exist until we have the skier visits and the cash flow to both justify and fund the necessary expansions.”
With such increases imminent, the resort is busy expanding parking and shuttle services, improving food service and hiring more ski instructors. According to Shirley, Bogus is now able to shift its focus “from attracting more skiers to the mountain to providing a quality experience for every skier who does come.”
