Brains
Dynamic pricing is a strategy where the cost of a product or service fluctuates based on demand, time, availability, and other factors. It has become increasingly popular in the ski industry as resorts look to maximize revenue and manage crowd sizes. By adjusting prices in real-time, ski resorts can better align their pricing with consumer demand, encouraging more visitors during off-peak times and maximizing profits during peak periods. This approach can benefit ski resorts and customers by offering a more tailored experience and efficient resource utilization.
One of the primary drivers behind dynamic pricing in the ski industry is the need to manage demand. Day to day, ski resorts experience significant fluctuations in visitor numbers, with peak times typically around holidays, weekends, and during bouts of prime snow conditions. By increasing prices during high-demand periods, resorts can balance the number of visitors, thereby reducing overcrowding on slopes and enhancing the overall guest experience.
One of the most dramatic examples of this came in January of 2023 when Arizona Snowbowl’s dynamic pricing model charged $309 for a lift ticket. The factors that led to the eye-popping price were that it was a Saturday in January, and the resort had received seven feet of snow in the previous seven days, including 15 inches from Friday into Saturday.
Conversely, lowering prices during off-peak times can attract more skiers, helping to fill the resort when it would otherwise be underutilized. Purgatory Resort, one of Colorado’s most family-friendly and affordable ski resorts, uses a demand-based pricing strategy that can make skiing more affordable. This dynamic model adjusts ticket prices in real-time based on demand, rewarding those who purchase early with the lowest prices available. Guests are encouraged to buy tickets as soon as possible to take advantage of these savings. Lift tickets start at only $9 on select dates. While $9 seems incredibly affordable, those are for weekdays in the early or late season. A lift ticket over winter break is currently selling for $89. These prices will continue to adjust as the dates get closer, the demand increases, and the weather changes. You can browse Purgatory’s lift ticket prices to get an idea of how the pricing works.
- Related: Purgatory Resort, CO, Announces its 2024-25 Winter Operating Schedule Including $9 Lift Tickets
The implementation of dynamic pricing also allows ski resorts to optimize revenue. Traditional pricing models set fixed ticket prices that do not change regardless of demand. This can lead to missed opportunities during peak times when visitors are willing to pay more or to lower revenues during slower periods. With dynamic pricing, resorts can adjust prices based on real-time data, such as weather forecasts, local events, or booking patterns, ensuring they capture the highest possible revenue from their available capacity. This revenue optimization is crucial for the sustainability of ski resorts, many of which face high operating costs due to factors like snowmaking, grooming, and maintenance.
For consumers, dynamic pricing offers both challenges and opportunities. On one hand, it can be seen as a benefit, allowing budget-conscious skiers to find deals by planning visits during less busy times. Skiers who are flexible with their schedules can take advantage of lower prices, making the sport more accessible. On the other hand, it can also lead to frustration if prices are perceived as too high during peak times, potentially deterring some visitors. To mitigate this, transparency and communication about pricing models are key. By clearly explaining how dynamic pricing works and offering tools for customers to track and predict prices, resorts can help skiers make informed decisions. Of course, to eliminate uncertainty, purchasing an unlimited season pass would be the solution for those who don’t want the uncertainty of changing prices.
Whether you love it or hate it, dynamic pricing in the ski industry is a powerful tool that aligns pricing with demand, optimizes revenue, and can enhance the visitor experience when managed effectively. It represents a shift away from the traditional, one-size-fits-all pricing models towards a more flexible approach that responds to market conditions in real-time. While there are challenges to this model, particularly regarding customer perception and accessibility, the benefits of improved revenue management and balanced crowd sizes can make dynamic pricing a valuable strategy for ski resorts looking to thrive in a competitive and weather-dependent industry. For bargain hunters, who are willing and/or able to plan ahead and lock in the cheapest days, dynamic pricing can represent significant savings as well.
