Skico gets lift beyond inflation rate
The price of the Aspen Skiing Co.’s full-season ski pass has outpaced the national rate of inflation by up to 6 percent over the past decade, according to a study by The Aspen Times.While the Skico’s increases have been greater than the national rate of inflation, a good case can be made that the cost of doing business in the Aspen area has also gone up more than the national rate of inflation since 1995. Everything from gas to wages are higher in Aspen.The Skico charged $850 for its premier pass in 1995. If adjusted for national inflation, that pass would cost $1,058 today, according to the Inflation Calculator website.The Aspen Skiing Co. announced last week that it will charge $1,129 for its premier pass for the 2005-06 season. That’s about 6 percent higher than what the site said the rate would be if adjusted for inflation.All comparisons assumed the purchaser was a member of one of the local resort associations and received a chamber discount. It also assumed the buyer would take advantage of the early purchase discount.The Times also checked to see how pass price increases since 1998 and 2000 compared to inflation rates.In 1998, the Skico charged $949 for its season pass. Adjusted for inflation, the pass would cost $1,100 today. The actual price is about 2.5 percent higher.For the final comparison, the Times looked at prices five years ago. The Skico had kept the price of its premier pass at $949. Adjusted for inflation, that pass would cost $1,054 today, or about 6.5 percent less than the actual price.David Perry, Skico senior vice president for marketing, said there isn’t a direct correlation between pass prices and expenses. Company officials don’t calculate specific increases in expenses before they set the pass price.However, he noted that higher costs do result in higher prices. And, like all business, the Skico is facing substantial increases in expenses this year due to higher utility costs. Water from the city of Aspen is used for snowmaking at Aspen Mountain and Buttermilk, for example. The cost is expected to rise about 40 percent for the coming season.”That cost alone is hundreds of thousands of dollars,” said Perry.Electricity rates from Holy Cross are going up about 20 percent at Snowmass because of the cost of burying power lines up to the village, he said.Perry said it was interesting to learn that the company’s pass price increases tracked closely to the level of national inflation. He said the Skico is concerned about keeping skiing affordable for local customers. The litmus test the Skico applies every season is whether the pass price provides value, he said.The average buyer of a full-season pass used it 32 times last season, according to Skico records. That worked out to a price of $33.72 per day, which Perry portrayed as a good value.He said there is no evidence that indicates that locals feel priced out of the market. Pass sales were up last season, although pass use ultimately went down from the previous year.”Because we’re locals, we’re very sensitive to the local opinions,” Perry said of Skico officials.”No one has grumbled to my face yet this year [about pass prices],” he added. “I’m sure it will come.”The Inflation Calculator can be found at http://www.westegg.com/inflation.Scott Condon’s e-mail address is email@example.com
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