How do Ski Resorts Make Money?

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How do Ski Resorts Make Money?

Photo Courtesy of http://bit.ly/2u5bevO

Photo Courtesy of http://bit.ly/2u5bevO

Photo Courtesy of http://bit.ly/2u5bevO

Thomas Coder, Staff Writer

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Ski Resorts are a popular vacation ideal amongst many Americans and people around the world. The whole idea of beautiful mountains, long trails, heated gondolas, and luxury condos is very appealing to the consumer, and it is no wonder that a business model such as the ski resort is so successful and widely popular. But it can be a wonder of how someone in their right mind would be willing to open a ski resort. After all, it seems that snowfall decides profits. According to Robert A. Katz, the CEO of Vail Mountain, Colorado, the trick to building stability in a ski resort is to “make your business about much more than snowfall.”
Ticket sales, something that makes up 50% of Vail’s profits,  are actually not as indicative of snowfall as one may think. According to Katz, 40% of Vail’s profits from tickets are made before the season even begins, a time when snowfall is not a major concern. When observing the other 50% of Vail’s profit, their business model is quite similar to that of an amusement park. A trick of Vail Mountain is to make a profit from any and every purchase made at the resort. This means they own all of the places to eat, to buy merchandise, to rent skis, lodging, and even apparel stores. Compared to European resorts, America’s resorts tend to make more money because Europe has private companies functioning within the major resorts. 

Since resorts own all of these things, they can open up their appeal to a wide variety of consumers. The avid skiers will come for the slopes, those more into sightseeing will come for the views, and even those into spas and just relaxing can find a way to do it at Vail. Essentially, the majority of people can justify a reason to go to a resort.

Perhaps the most lucrative economic aspect of ski resorts is the lack of competition they have in America. The last major ski resort in America to open was in 1981. When Beaver Creek was opened, the economics of Ski Resorts shifted, especially for competing mountains in the Rockies. The likeliness of any major resort opening, however, is very minimal, in fact, more improbable than ever before. New environmental restrictions on protected mountain lands beset any entrepreneur trying to open a resort, which is why American Businessmen are looking to open up resorts in Japan and China. This lack of competition assures even more stability for ski resorts to steadily grow. The ski resort, in actuality, is significantly more stable than one may think.