Remember the Titanic
May 6, 2002
Raising the lift ticket prices once again and we’re in a recession? Is this the only solution the Aspen Skiing Co. has every year for its cash flow problems?
I have heard the Skico execs equate six hours of skiing to six hours of golf (value comparison). Forgive my sarcasm, but they are missing a serious reality point. Such as how many golfers do you know that bring their wife and three kids with them? That would cost $500 a day, not including the cost of equipment rentals, ski lessons, lunch, etc.
How many golfers golf five to seven days in a row, while on their vacation with their family in tow? Do the math: $2,500 to $3,500 per week for lift tickets/green fees. Does this sound like Middle America to you?
When I lived in Los Angeles for 13 “too many” years, the first item my fellow skiers and I looked at was the ticket cost. Second item: snow conditions. Third: cost and time of travel. Fourth: cost of hotel accommodations. This seems to be a universal value system for most skiers/consumers.
How many of us in this valley have had our personal income go up by 70 percent in the last 12 years? When I moved to this valley in 1990, the ticket cost was $40 per day. Next year, 2002/03, it will be $68 per day. A 70 percent increase in 12 years!
In light of three bad snow seasons, and ski numbers being down by 10 percent per year for each of the last three years, does this make sense in a recession? I would equate this to selling our water during a drought year when Denver is already starting water rationing. Are there not other solutions?
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For many years the Skico tried to use the marketing concept of Aspen being the Mercedes Benz of ski resorts. But we found that Middle America buys Hondas, Toyotas and Nissans. And this elite image backfired. The skier numbers prove that.
We cannot continue to just blame it on snow conditions. Look at the Western Slope ski resorts or Ski Sunlight being up in skier visits in the last three years.
Do you know any other company that continues to raise their prices every year when their cash flow and product/sales are down? There has to be other solutions. Have any of the big computer companies such as Dell, IBM or Gateway raised their original prices up by 70 percent since the inception of their first sale of the personal computer. On the contrary!
Remember the first VCRs cost between $600 and $1,000? Now you can buy a quality Panasonic VCR for under $200. By lowering their prices and streamlining their production, their sales have skyrocketed. They saw the value of making it affordable for everyone. How many of us now have not just one, but two personal computers in our house, a laptop and a desktop?
Being the most expensive ski resort directly affects the image of Aspen, which directly affects skier visits, which affects the health of our economy, which affects all of our pockets (Look at the number of rental properties open; this is not a good sign).
Would it not make sense to cut costs, tighten our belts in every area possible. Example: the high-end executive salaries of $500,000-plus a year, adjust down to a base salary of $100,000 a year (or a figure that makes sense) with performance bonuses that can make up the difference and then some. So if the company makes money, so do the executives.
Why do CEOs and executives get paid the same huge dollar figure when their company is hurting financially? Should not their salary be performance-based, like the rest of us business owners? No other business owner in the country (or our valley) operates this way. (Except maybe the U.S. Congress.)
How about brainstorming with your employees? How about connecting with the Rocky Mountain Institute, which has some of the smartest people on the planet working (in our very own backyard)?
Even our President Bush and our country is looking to Amory Lovens (and his team) with hope of an energy policy solution, because Amory is a genius!
Ask for help on how to become profitable and marketable without raising prices every year. Ask the community for help. Start a Skico/community “think tank.” Create a financial incentive or a ski pass for life for the group (or person) that comes up with the solution.
Because we are all in this together … trickle down economics works in this valley. We are a destination resort. Our visiting skiers do not sleep on friends’ floors. We know that our skier visits are directly affected and controlled by available bed space and flight availability.
Here are some scary statistics. We have gone from 1,399 economy bed spaces in 1991 down to 399 economy bed spaces in 2002. A 75 percent economy bed space loss! Do the math, and you’ll see how much our economy is losing money.
At some point, we consumers put a dollar value on an item. Example: How many of us will pay $10 for a bottle of Budweiser, when we can purchase two six-packs at the grocery store for the same dollar figure? We consumers are price-conscious. We have household budgets to manage and have not received a 70 percent salary increase over the last 12 years.
Ski Sunlight and some of the other Western Slope ski resorts’ skier visit numbers have gone up over the last three years. Maybe we should follow some of their creative marketing and pricing ideas. Aspen is not impervious or unsinkable. Remember the Titanic?