Who Are We?

(Editor’s note: In last week’s editorial entitled Who Are You?, we asked resort officials to give their point of view concerning positioning and pricing. Here is their response…)

Mark Reaman’s editorial last week challenged the ski resort on its pricing and business strategy. Mark admitted he knows little about the ski business and based his opinion on a quick search of the Internet and his own perceptions about what other resorts have to offer compared to Crested Butte. Mark focused on the lead lift ticket price for Crested Butte compared to other ski areas and presented vacation package prices and an online airline price comparison. I believe the main point of his editorial was that Crested Butte is not being positioned correctly in our pricing and that we should stop trying to compete with the top tier resorts. Mark expressed that Crested Butte just doesn’t measure up in our amenities or mountain experience. In other words we are a second tier resort and should price ourselves accordingly. We disagree.
Although we hesitate to dispute someone “who buys ink by the barrel,” there are enough misconceptions in his article that we feel we should clear them up.
The best way to illustrate our competitive set is by looking at what other resorts our current guests consider when choosing a destination to ski. We have extensive surveys that show this quite clearly. When asked in our guest surveys, “What other resorts did you consider before choosing Crested Butte?” the following chart shows the top six responses and their corresponding ticket pricing. In contrast to what Mark presented, our lead lift ticket price is the lowest of this group and, remember, ours includes admissions tax which is not the case with the other resorts. When looking at a true comparison, you also need to look at child and teen tickets to see a clear comparison of our value position with the competition.

Top 6 competitors lead window lift ticket price   
What other resorts did you consider before choosing Crested Butte?   
                           Adult Regular    Early/Late Season    Teen Ticket    Child Ticket
Crested Butte        $87                     $59                             $53                   $44
Steamboat            $95                       $76                           $79                   $58
Vail/Beaver Creek    $98                    $98                             $98                   $62
Telluride                 $92                    $69                             $92                   $58
Aspen/Snowmass    $96                     $96                            $87                    $62
Breckenridge         $93                       $93                           $93                    $50
Jackson Hole         $91                       $78                            $91                    $54 

Ski industry ticket pricing is really quite complex with a broad distribution system that feeds from the lead ticket price. Other levels of pricing and discounts include wholesale, group, Internet and a wide range of discounts and package rates. If we decided to lower our lead price it would have a direct impact to all pricing tiers and would require us to reduce discounts and eliminate many promotions (2 for 1 deals or Gunnison Getaway discount tickets, etc.)

The other price that Mark challenged was the lodging package price. He compared a lodging package at Steamboat Springs to a package at the Lodge at Mountaineer Square. Unfortunately, our staff could not find information on the Steamboat package so it might not have been an apples-to-apples comparison. CBMR uses data from CRADAR (Central Reservation Association of Destination Resorts) to accurately compare our lodging and package prices to other resorts. Other ski town central reservation services report into CRADAR, which compares lodging rates and packages sold. The most recent reports show the average daily rate for lodging booked through Crested Butte Vacations is $139 less per night than our competitive set and complete packages to be $834 less than the other resorts. If anything, we should be higher.
We at CBMR believe Mark was trying to point out that the local perception is that we are priced as high as or higher than other destination resorts. His opinion is that if we lower our lift ticket and lodging prices we will grow the number of visitors. Within reasonable limits there is very little or no evidence to support this theory in the ski industry. Price elasticity does not result in more skier visits. CBMR has proven this in the past. Our guests are looking for a unique experience and are looking for value rather than cheap prices.
 Further evidence to this is contained in the editorial. You have to ask yourself that if Alta and Taos lift tickets are only $65, why are they still doing around 100,000 less skier visits then Crested Butte. I would challenge that we have the highest and best value of any major destination resort in Colorado and have some of the most compelling packages and promotions this year. We are offering a great product and value at every level and are priced competitively. Our marketing, sales and lodging departments are extremely knowledgeable about the destination ski market, our resort and the resorts in our competitive set. Combine that with the uniqueness of our towns and valley, and we are more than comfortable with our pricing.
Do we need more visitors to our resort? Absolutely!! Our biggest challenge right now is our air service model and the lack of frequency and direct flight markets with the best size planes. We can directly track the shortfall in skier visits this year to the change in our air service model and the reduction of 10,000 inbound seats year over year. If there is one thing we can focus on as a community going forward, it is providing better and more convenient air service. We all need to encourage the RTA to seek new ways to build our air program.
At CBMR, we do take Mark’s comments and all input from inside and outside our community seriously. We are certainly concerned with the perception that is generated by our advertising and marketing and how it is being received by potential guests. Our goal should not be to be the “lowest guy in the top tier” or the “top guy in the middle tier.” Rather we will continue to grow into a position that people see Crested Butte as singular for it unique attributes, position and overall value. Everyone at CBMR has been diligent in their efforts to position ourselves given the current macro and micro economies. We will continue to work hard to make the resort successful and the valley sustainable.

Ken Stone for
Crested Butte Mountain Resort