The region's two largest ski resort operators are using the marketing power of combining multiple resorts on a single season pass to increase sales and draw new skiers and snowboarders to their facilities.
When Squaw Valley announced its merger with neighboring Alpine Meadows last fall, season pass sales spiked 38 percent year over year, says Andy Wirth, president and chief executive officer of Squaw Valley.
The resorts recently announced the addition of Sierra-at-Tahoe to its season pass, and sales through November were trending up another 10 percent from the prior year, Wirth says.
"We struck a power chord in the marketplace," he says. "We have never seen that kind of year-over-year growth on season pass sales it was double what our model was suggesting."
Squaw's largest regional competitor, Vail Resorts, owner of Heavenly Mountain Resort, also offers access to three resorts on its season pass. Vail added access to Northstar-at-Tahoe when it acquired the resort from Booth Creek Ski Holdings in 2010. A year later, Vail increased the allure of its season pass by acquiring Kirkwood Mountain Resort, a locals favorite that enjoys the most snowfall of all regional Sierra Nevada resorts.
Vail management shies away from discussing season-pass sales statistics, but Pete Sonntag, vice president and general manager at Heavenly, says Vail's season pass program helped the company to ride out the horrible conditions of the past season.
"It really offered us a lot of protection from a tough season financially," Sonntag says, "and it also allowed us to continue to spend money on the product throughout the season."
Lack of snowfall for the majority of the season kept skiers and snowboarders on the golf courses instead of the ski slopes for the winter of 2011-2012. Both Heavenly and Northstar were forced to make snow from December through February, and Sonntag says both resorts blew record amounts of snow during the peak winter months.
Both resort operators say their multi-mountain season pass programs don't dilute the revenue stream from any one resort through lost single-day lift ticket sales because the skier experience offered at each resort is different.
For instance, Wirth says, the hardcore skiers who shred the steeps at Squaw Valley aren't the same group that hits the family-friendly slopes of Sierra-at-Tahoe.
The pass actually draws greater exposure to each resort, he says, because skiers accustomed to traveling east up Highway 50 to Sierra may decide to travel up eastbound Interstate 80 a few times a year instead.
Management took a hard look at data collected through telephone research, customer surveys and on-the-slopes discussions with customers before deciding to add Sierra to its pass program, Wirth says.
"Sierra is a very highly regarded resort, and those customers who enjoy skiing and riding there largely originate from Sacramento that is real strength for Sierra," he says. "We also knew there was very little overlap from their customer base to ours. On one hand Sierra is a competitor, but we are not substantially competing with each other, so a joint venture would be accretive to our business."
Resort operators also count on loyal pass-holders as a tool for expanding their customer base. Oftentimes, Heavenly's Sonntag says, season-pass holders bring along friends and family that purchase single-day lift tickets. Many in that group end up purchasing season passes of their own.
"The pass-holder typically is a super-engaged loyal guest, but they always drag a friend along, and that gives us another opportunity to sell our product," Sonntag says. "Those people turn into pass-holders as well, and we also really put a premium on loyalty. We really feel like we get an amazing benefit in the long run by having people come again and again."
Like casinos that offer steeply discounted room rates in the hopes that guests will spend money on food, beverages and gaming, ski resort operators count on the daily on-mountain revenue stream to increase profitability.
Sonntag says season-pass prices fell sharply several years ago, leaving resort operators to count on the increased volume in ridership and per-capita spending by guests to offset the lower cost. Vail's Tahoe Value Pass is $419, while the Tahoe Super Pass Plus to Squaw/Alpine/Sierra is $429. Pass prices are less if purchased earlier in the year.
"That was the gamble that was taken years ago," he says. "Because they didn't spend so much money on a pass, they have got money to have a drink with their meal or take a ski school lesson or do private lessons. It kind of opened up a whole array business to a lot larger audience than before. Obviously we are doing well or we would have gone back to the model we had years ago."