Snowboarding in Europe, of course, sounds really fancy. And don't get me wrong, it can be fancy if you want it to be. But the reality is that it's also a cheaper option. And that's because the price of a single day lift ticket at most resorts in America is now many multiples of what it costs in Europe. Think $250 vs. €50.
North America has become the expensive destination.
According to a recent Economist article titled "the economics of skiing in America," resorts in Europe are often owned by local or national governments. This is not the case in America, and it's why the lift tickets in Europe seem, by comparison, cheap. But this price differential is also the result of an evolving business model.
Historically, owning a ski resort has never been a stable business in the US. And this makes sense. Most resorts make their money on lift ticket sales. However, sales are dependent on snowfall. If you get a lot of snow, then you make a lot of money. If the planet starts warming up and you don't get a lot of snow, then you don't make a lot of money. Vail has since changed this.
What they have done is made it so punitive to buy a single day lift ticket in North America, that even if you're an occasional skier, the only sensible thing to do is buy a subscription-like pass in the spring -- well before the next season starts.
This is what I have started doing and it gives you unlimited skiing for less than the price of a few days. It also gives Vail a source of revenue that isn't so dependent snowfall. Season passes now make up about 61% of their lift-ticket revenue, according to The Economist. At the same time, it is a model that relies on being able to price discriminate against single-day, non-pass users:
In basic economic theory, excessive market power reduces the efficiency of an industry. Firms reduce output so as to be able to charge more. There is, however, an exception: if a monopolistic firm can charge different prices to different customers, it need not reduce output to increase its profit. The skiing industry shows the truth of this. As the industry has consolidated, daily prices have soared, extracting more cash from price-insensitive skiers.
But this isn't the only way to do it. There's also the whole real estate thing. Last year, Reed Hastings, cofounder of Netflix, became the majority owner of Powder Mountain. And here, they're trying out a different business model:
This December, Powder Mountain in Utah announced that it would be moving to a model where only local property-owners are allowed to ski certain chairlifts. The idea is to profit from real-estate sales, by offering private skiing without the crowds. “To stay independent and uncrowded, we needed to change,” says Reed Hastings, the firm’s boss.
Even still, neither of these approaches is making snowboarding and skiing more accessible. Which is why it's not uncommon to come across stickers and t-shirts at local ski shops that say, "Vail -- ruining ski towns since 1966." People are missing the old days when lift tickets were cheap and the lines on powder days weren't so long.
What skiing needs is in fact much of what the economy more generally needs: supply-side reform, and especially the construction of new housing and transport in the most popular spots. Though there are more skiers than ever, there are in fact fewer resorts than there were a few decades ago.
This sounds familiar.
All quotes are from The Economist.
About 60 miles north of Salt Lake City is the largest ski resort in America, called Summit Powder Mountain. It's some 10,000 acres. But beyond just being big, there is also a fascinating story and philosophy behind the mountain.
It was started by four partners -- Elliott Bisnow (of Bisnow events), Brett Leve, Jeff Rosenthal and Jeremy Schwartz -- who partnered up with Learn Capital in 2013 to buy the mountain from a distressed seller for $40 million.
The four guys were already running a successful invitation-only event series for entrepreneurs and creative types called the Summit Series, and big part of their vision for the mountain was to recreate this same ethos.
The idea was to create a community focused on relationship-building, entrepreneurship, innovation, environmental sustainability, and good design. Put differently: a kind of utopia for rich people.
So far, about 80% of the home buyers at Summit Powder Mountain are members of the Summit Series.
All of this has translated into some pretty cool mountain architecture (see above). In fact, people who buy vacant lots within the community are effectively banned from building the kind of faux chalet stuff that permeates a lot of (or most?) mountain towns.
Here is a taste of some of the homes that have already been built.
I am all booked for my annual retreat to the mountains, which means I now have snowboarding on the brain. This year we are headed back to Whistler (/Powder Mountain) so that we can all check heli boarding (and heli skiing) off the bucket list. That’s one goal – among a few others – that I plan to accomplish in 2017.
If you don’t snowboard (or ski), this probably means nothing to you. It can be hard to explain the feeling. Thankfully, Christian Haller (Swiss snowboarder), Kris Lüdi, and Stephan Maurer have just released a short film that may very well be the closest approximation to the real thing. It’s called GLUE.
The whole point of the movie is to portray, in an authentic and visual way, what it’s like to snowboard. To do that, a lot of the footage was shot using a “follow cam.” There are also a lot of close-up shots. I just love the perspectives when it kicks in at 1:50.
If you can’t see the video below, click here. And if snow and snowboarding aren’t your thing, check back tomorrow for regular scheduled programming.
[vimeo 190544188 w=640 h=360]
GLUE from Christian Haller on Vimeo.