If you’re a snowsport enthusiast, you’ve likely heard (and participated in) the age-old debate: American ski resorts vs. European ski resorts. Beyond the obvious differences in terrain, snow, culture, and scenery, one critical factor often tilts the scale in favor of European slopes for budget-conscious skiers: cost. American ski resorts have earned a reputation for being significantly more expensive than their European counterparts. With ski lift day passes in America around four times the cost of European counterparts, one has to wonder where this difference comes from.
Vail announced it will charge up to $300 for a day ticket next season while no European resort has yet broken the three-digit barrier, and European resorts are starting to look like a feasible alternative for middle-class Americans. Ticket prices in the U.S. were comparable to their European counterparts and tracked inflation until the 1980s, when prices ran way ahead of inflation. When Vail Mountain opened in 1962, a day pass lift ticket cost $5. Adjusted for inflation (measured by the Consumer Price Index or ‘CPI’), a ticket would be around $44 by 2022. However, the actual price last season was a staggering $239.
Of course, this is a comparison that does not take into account the significant infrastructure upgrades undertaken by Vail. However, comparing the pricing of U.S. resorts with state-of-the-art European resorts shows that Americans are paying around four times the lift ticket price to comparable European ski resorts. There is not a single European resort charging more than $95
This price difference stems from the very different history of American resorts versus European resorts. In Europe, skiing evolved organically over a long period, with many ski resorts already being popular wellness destinations in summer, credited with healing properties from the pristine alpine air. Meanwhile, the American ski industry did not take off until the 1950s and was a combination of imported visions from Europe combined with corporate strategies rather than organic growth. Geographical and cultural differences come into play as well. Ultimately, the price difference comes down to a combination of factors, which we have analyzed below. Most factors are intertwined, but we have separated them here as best as possible for better illustration.
1) The Evolution of the American Ski Industry
Skiing evolved in America in a different way than in Europe. Skiing was initially a means of transport in Europe. European immigrants spread this form of transportation across mining towns in Colorado and Utah, such as Park City, Copper Mountain, or Aspen. When the mining industry went bust in America, so did most of these towns, and populations dwindled. Western American mining towns never attracted summer tourists like European ski resorts. Tourism was well established in the European Alps, with people traveling to alpine resorts for their healing properties. Ski tourism in Europe evolved from existing summer tourists discovering the stunning beauty of the Alps in winter for themselves over the years. In America, the collapse of the mining industry almost destroyed mining towns, and wealthy Americans brought the idea of turning these areas into ski resorts back from European trips. In the late 1930s, the first lifts were installed in America’s West, which kickstarted the idea of ski resorts in America.
The next surge in skiing in America came after World War II when around 62 veterans of the 10th Mountain Division opened ski resorts across the nation, resurrecting many mining towns as ski resorts. The most significant growth in American ski resorts occurred in the 1950s and 60s, with the ski industry growing at 15% per annum. From 1955 to 1965, the number of ski areas in North America went from 78 to 580. When this growth topped out in the late 1960s, resorts started to change hands, and the initial ski area founders aged out or moved on and sold their resorts to developers. Then, in the 70s, consolidation started, and mountain resorts fell under corporate management, sometimes by unrelated businesses, like Ralston Purina, which bought Keystone and Arapahoe Basin, CO, in 1973, or 20th Century Fox, which bought Aspen Skiing Co. in 1978.
- Related: The History of the Legendary 10th Mountain Division, The Men Who Started USA’s Ski Industry
At the beginning of the 1980s, there were over 700 ski areas in the USA. Consolidation accelerated while the number of active snowsport participants stagnated, forcing smaller, privately owned resorts, which could not compete with the investments of large corporations, out of business. The number of ski areas has decreased to roughly 500 ski areas, yet between 2000 and 2017, the price of a day pass increased by 200%.
2) Resort Ownership
Market theory has it that in an efficient free market, prices are set by balancing supply and demand; however, the ski industry in America does not represent an efficient free market. The number of active skiers in America has been relatively steady over the last 25 years. However, prices for ski tickets have gone up almost 500% in the same period. This is because roughly 50% of the U.S. ski resort market is dominated by two large players, Vail Resorts and Alterra. In this duopoly, Vail Resorts has the largest piece of the pie in the U.S., with an estimated market share of 36.1%, while Alterra has a market share of 15.1%. By its own estimations, Vail covers 53% of all North American destination guests (which includes Whistler Blackcomb in Canada, the largest resort in North America by visitation numbers). In a duopoly market, inefficiencies can be used to achieve outsized profits, and barriers to entry are high. Skiable mountains are a limited resource and are often situated in National Forests where land is protected from further development. In 2008, Vail Resorts and, in 2018, Alterra introduced multi-resort season passes, which are sold upfront, minimizing their risk and optimizing cash flows for the corporations. The price increase since 2008, when the Epic Pass was introduced, is very noticeable in the above chart of Vail’s actual versus inflation-adjusted day pass price.
3) Lack of International Substitution
American resorts do not face much international competition, with only Canada being a viable competitor. In Europe, Alpine countries and individual resorts compete for international skiers from its European neighbors in Germany, the United Kingdom, the Netherlands, or Belgium but also further afield, like Russia or China. The U.S. does not compete for international skiers as the inbound market is insignificant for U.S. resorts, with only 6% of foreign skiers coming to the USA. Outbound, there is only Canada that attracts any significant flow of skiers. Despite America’s large population, the flow of U.S. skiers to Canada is only the tenth largest outbound travel direction in ski flows. Germany, for example, has around 25 million skiers, of which about 14 million are active skiers in a year. This number compares well with America, which has about 25 million skiers, of which active participation is around 10 million. Approximately 59% of Germans will spend their ski holiday in Germany, while the remaining 41% will travel to Austria, Switzerland, France, or Scandinavia. This means close to six million Germans travel to mainly European resorts. This is more than half the number of active U.S. skiers, a significant number that creates competitive pressure for European resorts. America lacks this kind of international competition entirely, which is surprising given skiers from the East Coast will typically fly more than four hours to the West Coast when they could just as easily fly six hours to Vancouver or seven hours to Europe.
4) Insurance and Healthcare
Skiing /boarding is a sport that carries some risk, and ski resorts need to have liability insurance to cover litigations. As the first lawsuits started to emerge, the legal landscape surrounding ski resort liability started to solidify. The Ski Safety Act, first introduced in Colorado in 1979, served as a model for other states. Corporate liability insurance became an essential tool for ski resorts to navigate this evolving legal framework, causing liability insurance in the United States to increase by 600% in the 1980s. Today, corporate liability insurance at American ski resorts has evolved into a multi-faceted system. Resorts typically carry a combination of general liability insurance, which covers accidents and injuries on resort property, and specialized ski industry insurance. These policies are tailored to address the unique risks of skiing and snowboarding, such as collisions on the slopes and injuries related to ski lifts. The cost of this plethora of insurance policies is passed on directly to consumers. In Europe, skiers typically carry their own liability insurance and have private or public health cover, eliminating any need to sue to recoup medical expenses. In addition, the litigious culture where millions in remuneration are sought for wrongful deaths is a concept entirely unknown in Europe. Therefore, the liability insurance cost for European resorts is much lower than for their American counterparts.
All these factors have contributed to the dramatic price increase in American ski resorts over the last four decades to the point that prices younger generations out of the sport. Since the ski industry in America took off in the 1950s and ’60s, the median skier age has increased by nearly 50% from 24 to 35. It can hardly be a development that the NSAA would encourage to combat the declining participation in younger generations. If they want to grow the sport, we must find ways to make skiing more affordable for families.