Some Skico pass prices far exceed the rate of inflation
August 9, 2002
The Aspen Skiing Co. has hiked the prices of two popular ski passes by up to three times the rate of inflation over the past decade, according to an Aspen Times study.
The Skico has been upfront about setting a pricing policy that rewards people who ski more. The company brass wants people to buy its Premier pass, which offers the greatest value but is more expensive than other passes. The Premier pass provides unlimited skiing on four mountains for the chamber rate of $999 this season.
But what wasn’t so apparent was just how hard the pricing policy has affected people who want to or must buy the one-day and two-day per week passes.
Since 1993, the price of the one-day pass for members of the valley’s chambers of commerce has skyrocketed 66 percent from $325 to $539 this year if bought before an early deadline.
Meanwhile the national rate of inflation has increased by 24 percent over that same time period, according to the U.S. Department of Labor. If the pass price increased by a similar amount, it would cost $405 today.
Similarly, the two-day pass has shot up from $400 in 1993-94 to $719, or an increase of 79 percent. The inflation rate of 24 percent over that period would place the two-day pass at $498.
Recommended Stories For You
@ATD Sub heds:Premier pass price drops
@ATD body copy: On the other hand, the Skico has drastically dropped the price of its Premier pass over the same period. It charged $1,350 in 1993-94.
This year the same pass runs at $999, or a decrease of 26 percent. If the Skico was following the national rate of inflation, it would be charging $1,681 for that pass.
The Aspen Times used the Department of Labor’s Web site for its study. The Bureau of Labor Statistics provides an inflation calculator that determines the buying power of money in past years in today’s terms.
The Times used the 1993-94 season for the base prices in its study because that is when the Skico merged with Aspen Highlands to offer four-mountain passes. The labor department’s Web site allows a user to plug in a dollar figure from a certain year, in this case 1993. The site calculates the buying power of that amount in 2002.
When the Times compared the increase in pass prices to the rate of inflation since 1997, the patterns were similar.
The one-day pass went up 17.5 percent while the rate of inflation over five years was up 12 percent.
The two-day pass went up 24 percent – double the 12 percent rate of inflation.
The premier pass went up only 2 percent compared to the 12 percent inflation rate.
@ATD Sub heds:Still good value
@ATD body copy: While pass prices can be examined in the context of inflation, they can also be viewed in cost per day, noted Mike Kaplan, Skico senior vice president of operations. In that light, he believes all passes provide good value.
The price per day on the Premier pass is “pretty ridiculous,” he said, figuring a person could ski or ride up to 150 times for $1,000.
Over the course of the 22-week season, the one-day per week pass translates into $24.50 per outing while the two-day pass translates into $16.30 per day.
Kaplan said it is next to impossible for a consumer to find an entertainment activity at such low rates. Colorado Avalanche hockey games, Colorado Rockies baseball games and even a golf outing all cost considerably more.
“We were undercharging for the value in 1993-94,” he said. “We saw that and said let’s try to push people into the Premier pass.”
But he also defended the Skico’s overall ski pass pricing structure.
“Look at the whole picture and you can say there’s still good value out there,” Kaplan said.
@ATD Sub heds:Expenses soaring
@ATD body copy: While some pass prices have increased considerably over the past decade, the cost of doing business has also soared.
Labor is the Skico’s biggest expense. Kaplan said he didn’t know the cumulative percentage increase in wages since 1993-94, but he noted that the Skico tries to give hourly employees a 2 to 4 percent increase annually. It must to stay competitive.
At peak season, the Skico employs 2,500 to 2,700 workers at the ski areas alone. It also owns and operates hotels with a separate work force.
The inflation rate determined by the Bureau of Labor Statistics isn’t necessarily reflective of the picture in Aspen, where doing business has been expensive since the silver-mining boom days. A higher cost of living is a given in a confined valley, where demand for virtually everything outstrips supply.
Nevertheless, how will skiers and riders feel once they learn their two-day pass is 79 percent more expensive than it was nine seasons ago?
“It’s still a fantastic value,” Kaplan countered. “Natural snowfall aside, let’s compare the value now to 1993-94.” Continual improvements, such as access to Highland Bowl, produce a lot more value for the money, he said.
[Scott Condon’s e-mail address is email@example.com]