87. Ski Areas

Independent ski areas survive on thin margins and fickle snow

Ski areas are seasonal and capital intensive businesses that depend on discretionary spending and snow. Consolidation has made mega passes from Vail Resorts and Alterra cheap and powerful, so independent mountains like Loveland and Mount Ashland compete on uncrowded slopes and local ownership. Small areas survive through family ownership or community nonprofit support, tight operations and side businesses, but thin margins and weather risk remain.

Takeaways

• Ski areas are weather-dependent and capital-heavy. Rob Goodell calls the business seasonal and labor intensive. At Loveland, 60 to 65% of revenue comes from lift tickets and about 30% from food and beverage and from ski school and rentals, so it keeps a capital reserve called a lack of snow fund.
• Mega passes reshape competition by bundling resorts cheaply. Vail Resorts and Alterra own about 10% of ski areas but sell the Epic and Ikon passes. An Epic Pass costs more than $1,000 for 42 resorts, while a single day at a big resort can top $300. Andrew Gast calls mega passes very affordable.
• Independent hills sell uncrowded slopes. Rob Goodell says independent mountains are less crowded, and parking is Loveland's most limiting factor. Loveland is expanding parking to accommodate more people. A single-day adult ticket costs $149 and a season pass $699, far below big resort day rates.
• Mount Ashland is a community-owned nonprofit. In the early 1990s, owner Harbor Properties wanted out and the community bought the mountain. Donations cover only about 1% of day-to-day costs. Its operating budget is a little over $4m, and it is budgeted to lose about $250,000 in March.
• Labor and housing are major operational constraints. Loveland employs about 60 year-round staff and 620 to 640 at peak. It has expanded employee housing over the last five to six years and has been staffed better as a result. About 50 ski patrol plus 100-plus volunteers work the mountain.
• Capital costs and lift choices shape the business. Chairlifts cost from hundreds of thousands to over $10m. Mount Ashland's new lift cost over $3m, $2m for the lift and $1m for installation, and Mount Ashland expects $250,000 to $300,000 from old chairs. High-speed detachable lifts last about 25 years, against its 61-year-old chair.
• Summer revenue is small but growing. Mount Ashland runs restaurants and camps for children aged 8 to 13. Its new axe throwing attraction is expected to bring in $25,000 to $30,000 in its first summer. The mountain wants to be a hub for trail running and hiking.