The Business of Ski Resorts

Wendover Productions

Ski Resort Pricing and Infrastructure Costs

Daily lift tickets cost $100+ at typical resorts
- Top resorts like Vail charge up to $209/day
- Access includes 32 lifts operating 8:30am-3:30pm
Ski lift construction costs regularly reach $10 million per lift
- Most large resorts have dozens of lifts
- Vail has 32 lifts totaling approximately $320 million if all cost $10M
- Costs amortized over few dozen years lifespan
- Divided among hundreds of thousands yearly visitors
Lift infrastructure represents small proportion of total resort costs

Each lift requires multiple workers for operation, ticket scanning, loading assistance
Large resorts need thousands of employees for restaurants, rentals, hotels, activities
Labor recruitment difficulties due to:
- Low-wage, seasonal nature (5-6 months)
- Limited pool of people willing to relocate temporarily
- High turnover as young workers move to long-term careers
Enhanced benefits offered: healthcare, transit passes, 401ks, free ski passes
Aspen case study:
- Base wage: $13.50/hour
- Home prices: $1,700/sq ft (vs Manhattan's $1,400/sq ft)
- Solution: subsidized employee housing at affordable rates
- Employee costs exceed base wages due to housing subsidies

Seasonal workers often arrive without cars
American ski towns have exceptional public transit systems
Colorado leads nation in rural transportation ridership
Aspen system statistics:
- 5+ million passengers/year in town of 7,000
- Buses every 12 minutes on core routes
- System extends far beyond town center
Symbiotic relationship: resorts need accommodating towns, towns need resorts

Most major US ski resorts operate on government land (122 on US Forest Service lands)
Resorts hold permits, don't own the land
Public can legally hike uphill without lift tickets
Resorts sell lift access, not mountain access
Despite this, significant investment in downhill run maintenance required

Annual maintenance: tree trimming in summer
Nightly operations: snow cats groom easier/frequent runs
Artificial snow making when natural snow insufficient:
- Snow guns spray water droplets that freeze quickly
- Requires below-freezing temperatures (common at nighttime)
- Smaller/warmer resorts rely almost fully on artificial snow
- Larger resorts use for season extension and high-use area buildup

Construction costs: expensive system installation across vast mountain areas
Water sourcing: difficult to obtain large quantities needed
Energy intensive process
Cost: $5,000/acre average to cover terrain
Whistler Blackcomb example: $40+ million to fully cover in artificial snow
Snow can melt in few warm days
Represents huge ongoing cost for large resorts

Snow sports among most threatened industries by climate change
Projected effects vary by location:
- Some areas will get more precipitation/snow
- Lower altitude/southern resorts will see shrinking seasons
- Higher altitude/northern resorts may benefit short-term
Industry making physical and business model changes
Expensive snow making capacity increasing

Massive consolidation started 5 years ago (2015)
Vail Resorts expansion:
- 2015: owned 11 resorts
- 2020: owns 37 resorts
- Geographic diversification across different climates
- Properties in Rockies, British Columbia, Australia
- Operates lifts nearly year-round globally
Alterra Mountain Company formation (2018):
- Aspen Skiing Company + KSL Capital Partners joint venture
- Owns 15 resorts across US and Canada

Vail's Epic Pass and Alterra's Icon Pass
Season passes working at dozens of resorts worldwide
Consumer benefits: variety and flexibility at single-resort season pass prices
Company benefits: increased season pass sales
Risk hedging strategy:
- Season passes sold before season starts
- Less weather-dependent than day passes
- Consumers share risk with companies
- Reduces revenue variability year-to-year
Crucial shift as snow variation expected to increase
Climate change now component of financial planning rather than external threat

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