PALISADES TAHOE, Calif. -- Alterra Mountain Company, owner of the Ikon Pass, is brainstorming ways to attract new skiers while continuing to reward die-hards with the substantial cost advantages of a season pass.
Starting this week, Alterra has tasked the leadership of each of its 16 ski areas to come up with ideas.
In a wide-ranging interview at the Mountain Travel Symposium on Wednesday, Alterra CEO Jared Smith said the multi-mountain pass has been a game changer for ski areas in North America, enabling them to lock up 25% to 30% of ski season revenue before the first snowflake even falls. Those funds insulate ski operators from the vagaries of weather, allowing them to more easily secure capital for investments in lifts, snow making, IT and other infrastructure.
While the Ikon Pass substantially reduces the daily cost for passholders, Alterra's other guests take the brunt of high-priced day passes that are in the $300 range at some mountains.
"In my opinion, we've reached a tipping point. It is prohibitively expensive," the Alterra CEO said.
Those high one-day prices are generally hitting new skiers, who also are paying for travel expenses, ski rental equipment and lessons. That makes starting out "ungodly expensive and hard," said Smith.
"We have to find ways to get people to the hill, get them an instructor and get them to enjoy the mountain in a way that encourages them to come back," he said.
Options that Alterra will consider, Smith said, are all-in packages and concierge services. Another option, which has elements of programs in place elsewhere (including at Utah's Snowbasin), would be to give skiers who aren't in the Alterra database three free ski days, provided that they take an introductory lesson.
A capital-intensive industry
Anther topic touched upon during the hour-long interview: Why does skiing cost so much?
"This business, it eats capital -- for breakfast, for lunch, for a snacker," he said.
For example, Alterra has 230 lifts across its company with an average lift age of around 30 years. Replacement of a single lift averages around $15 million, nearly double what it was 10 years ago, he said.
"The cost to operate these places is really high, and that's part of why it is so expensive to do what we do," said Smith.
Alterra versus Vail Resorts
The Alterra CEO also spent time contrasting his company's philosophy with that of primary competitor Vail Resorts.
Vail is a public company with a top-down management approach, Smith said, while Alterra leaves more decisions to the management of each particular ski area.
"We think we are going to make better decisions and we think it is going to lead to more differentiation in the marketplace and more authenticity," he said.
Smith said that philosophy will be demonstrated when Alterra takes control of Colorado's Arapahoe Basin, which it put under contract in February. The mountain, a favorite of advanced skiers, is known for its laid-back atmosphere.
Under Alterra, longtime A-Basin COO Alan Henceroth will have the same authority to run the mountain as he has does today, Smith said. In fact, Henceroth's decision to stay on was a factor in Alterra's decision to enter into the purchase agreement.
Smith also had kind words for Vail. In particular, he praised the company for developing the modern multi-mountain passes that have redefined the industry. Ikon, Smith acknowledged, wouldn't exist if Vail hadn't first developed the Epic Pass.
The Alterra CEO, who previously led Ticketmaster, said he has a lot of respect and empathy for Vail.
"I know what it is like to run the only publicly traded company in your industry and one that's easy to hate," he said.
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The Mountain Travel Symposium is run by Travel Weekly parent Northstar Travel Group.