Ikon Pass vs. Epic Pass: Good or Bad for Skiing?

In 2008, two years after becoming CEO of Vail Resorts, Robert Katz introduced a single season pass that was valid at all Vail Resorts ski areas, and called it the Epic Pass. Because Vail Resorts owns popular ski areas across the United States, Europe, and elsewhere, this meant that pass-holders could watch storm-cycles to decide where to ski and when. Concurrent with this move, he lowered the price of the annual pass and raised the price of individual day passes at the resorts. This created an incentive for those who typically would plan a ski vacation or two per year to simply buy a season pass, because the season passes ended up being cheaper than simply purchasing day passes during their vacation time.

This move shifted what had been a fairly unpredictable and seasonal revenue into a stable recurring revenue model. It also increased the TAM (total addressable market) for season passes. Previously, season pass customers were largely locals with enough time to ski their nearby resort extensively during the season. With the Epic Passes, tourists and families from cities like Atlanta and Houston could now justify a season pass, because they knew that if they were at least going to take one or two ski trips a year, they could pick up an Epic Pass and then watch to see which of Vail's resorts got the great snow that year, then plan their trip accordingly.

Adoption of the Epic Pass was swift, and in the years since its introduction Vail Resorts' market cap ($MTN) more than quadrupled. In its wake, another large ski resort conglomerate, Alterra, introduced a similar pass for their resorts called the IKON Pass. The speed of IKON Pass adoption has been equally stunning.

With this has come some back-lash from some of the locals and hard-core skiers and snowboarders who previously were a fairly exclusive group of enthusiasts. Having a season pass was something of an indication that you were a committed supporter of your local mountain, not a simple tourist or casual participant. Now tourists from out of state often flocked to the resort with the best snow, increasing the crowds and reducing the fresh turns that the locals of that mountain used to enjoy. Pretty soon mockery emerged, such as locals referring to the tourists as the IKON't Ski crowd. It touched a nerve, and soon Instagram accounts appeared that were dedicated to shaming tourists, and calling attention to crowds and un-cool behavior of multi-resort pass-holders. Things turned to outright hostility today when one such account, @ikonoftheday, posted a pic of a hand flipping off the camera and claiming that they had received a cease-and-desist letter from Alterra's management because of coronavirus-related comments the account-holder allegedly made.

THE TAKEAWAY
In 2018, the National Ski Area Association released what they called their Model for Growth, because only 19% of beginners adopt the sport long-term and both Millenials and Gen X are now skiing much less than their Baby Boomer parents. That is the reality. Boomers are aging out of their skiing years, and the generations behind them aren't as wealthy as Boomers were at their age. At the same time, skiing and snowboarding are more expensive than they used to be. This concoction is a recipe for the sport shrinking in both participants and public relevance. Some hard-core enthusiast say they wouldn't mind losing participants (and hence, valuable resources) from the sport. It would make it more enjoyable for those who undertake the effort and cost to be one of the lucky few who participate. But this is a short-sighted view, and the pains felt by resorts and gear companies falling on financial hard times would eventually be felt by locals, too. It would be better to brainstorm tactics to welcome and educate the tourists and new participants, rather than shame them. Time will tell just how much the coronavirus will reduce interest in ski travel. But it is likely to bring plenty of hurt to an already hurting industry. And for those of us who have loved and lived in the ski industry our whole lives, it would add unnecessary additional pain if we were to self-righteously ridicule our way even further towards the sport's irrelevance.

• NSAA
• IKON
• EPIC