Heavenly Ski Resort Rentals

Revenue Management in Action

Ski Resort Industry Overview

In the US, the Ski Resort Industry is consists of over 300 companies, generating roughy $4 Billion in annual revenue. Aside from selling lift tickets and season passes, ski resorts generate revenue through their associated hotels, restaurants, bars, and other attractions. This analysis will focus on strategies for managing revenue from ski mountain lift ticket and season pass sales. Also, most ski mountains supply of space exceeds the demand that would be needed to reach “capacity” at a given time

Space

The size of a ski area is typically expressed as number of skiable trails or in total acres. The skiable area is an explicitly defined space which customers rent for use. Purchasing a lift ticket or season pass entitles the purchaser to use the space for a specified time, but the space is shared among all patrons utilizing the space at a given time. In order to maintain safety and in some cases to provide the luxury of limiting lift lines, space capacity can be considered fixed. On the other hand, many resorts have difficulty predicting demand due to its corellation with the weather, which can result in long lift lines, and crowded slopes.

The overall space can be categorized by skiing terrain, ski lifts, maintenance areas, F&B Outlets, retail and equipment shops, lodging, and ticket sales. The Skiing Terrain space at most ski resorts is divided into trails which follow a rating system ranging from beginner to expert terrain, as shown below.

The terrain of a ski mountain is mostly determined by the natural slope, along with obstacles and snow conditions.

The following trail maps are examples of how ski resorts manage their space:

1.Greek Peak Ski Resort, Cortland, NY

2.Park City Mountain Resort, Park City, Utah

3. Heavenly Ski Resort, South Lake Tahoe, CA

4. Vail Mountain, Vail, CO

Additional Revenue

Aside from lift ticket sales, Ski resorts are able to generate substantial revenue through their on-mountain rental programs, F&B outlets, retail stores, and other attractions.

Some examples:

Some creative ideas on how ski resorts can increase revenue:

  • Offer hot beverages next to lift queue
  • Install camera coverage throughout mountain and sell videos
  • Create a first-class section of the mountain with well maintained conditions and limit the quantity of tickets sold (physical rate fence)

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