For most businesses across a wide array of industries, a customer will get a better deal per unit if they buy in bulk. These deals run the gamut from buy-two-get-one-free sunglasses in Times Square to Costco’s 40oz tubs of mayonnaise. Ski resorts are no different, often offering a lower per-day cost if a customer commits to multiple days than only one. It’s a win-win; customers get a better value and resorts get more guaranteed revenue up front.
At Liftopia we are firm believers in the value of advance commitment – if a customer is willing to commit to skiing for 3 consecutive days in advance, they should pay less than a customer coming to the window 3 days in a row, as the window customer has much more flexibility. But the ultimate goal is maximizing revenue for our resort partners, so we wanted to take a look at the value of these multi-day products, and find out just how lucrative they are to resorts.
A note to get out of the way before diving in. It seems obvious, but not all resorts are created equal. Large, destination resorts such as Mammoth Mountain in southern California are going to have customers for several days at a time while small, local resorts will get them for 1-2 days max. Liftopia usually recommends that the largest resorts offer a range of products between 1 day and 5 days long, the tiniest only 1 & 2 day packages, and medium partners 1-3 day packages
Looking through 7 seasons of booking data on Liftopia.com, there are examples of resorts of all sizes offering a wide array of product mixes; large resorts offering only a 1-Day package, medium resorts offering 1 & 2 day packages, tiny resorts offering 1-4 day packages, and so on. One thing was clear right off the bat – the more packages you offer, the more revenue went into those more expensive multi-day products.
However, with nearly 1,000 data points from resorts all across North America, with a wide variety of pricing strategies, a reliable estimate of how much revenue a resort would earn by offering a specific product mix can be achieved. All resorts have been separated into five categories by size: Tiny (0-50K visits), Small (50-150K), Medium (150-300K), Large (300-500K), and Whale (>500K) for this purpose.
Here are the results for our Tiny, Small, and Medium partners, where Liftopia recommends 1-2 or 1-3 day packages.
A ‘Tiny’ resort, on average, could expect to see online advance purchase revenue increase by 480% by increasing their product offering from only a 1-Day to a 1, 2, & 3-Day. Depending on resort characteristics, snow conditions, and pricing strategy, that amount could be higher or lower, ranging from +173% to +769%. Regardless, all resorts see a non-trivial increase in revenue, even when there’s no on-site lodging.
A similar pattern exists with Large and Whale partners. Because many of these resorts are name-brand, destination properties that skiers travel to, offering a longer length of stay product is a much better customer experience. In previous seasons, Whales that only offered a 1-Day product sold 12% of their tickets into consecutive days – a de facto multi-day ticket. When multi-day packages are offered alongside 1-Day Tickets, Whale resorts on average earn 51% of their advance purchase, online revenue from multi-day packages.
Our mission here is “Liftopia helps people spend more time doing activities they love by helping our partners run their businesses more effectively,” and we believe that by resorts offering an array of single and multi-day products, both sides benefit!