Let's say, hypothetically, the ski market is permanently reduced by 10%, 20%, 30%, whatever. Will that raise or lower prices?

[Rich_Ease_3051]

Let's picture a worst case scenario world where:
- international lockdowns are extended for a few more years permanently barring overseas tourists or even interstate tourists and workforce
- unvaccinated are barred from skiing because of government mandated vaccine passports on resorts
- economic depression results in cut back of discretionary spending by families on expensive sports/holidays like skiing
- dying off of boomers and millenials and Gen Z not having the income to partake in skiing and replace the boomer turnover
- intermittent and chronic supply chain issues preventing the gear industry from getting raw, intermediate, and final merchandise from their suppliers to consumers

Will this raise or lower the price of lift tickets, accommodation, price of gear (online and brick and mortar), price of après and similar services like resort restaurants, cafes, hire services, transport to and fro resorts, including plane tickets (a big chunk of skiing expense), price of ski packages, etc?

In short, will a permanent reduction of the ski market be overall inflationary or deflationary?

How do you picture the skiing, as an industry and as a personal hobby, in this scenario?

 

[KingGrump]

international lockdowns are extended for a few more years permanently barring overseas tourists or even interstate tourists and workforce

Don't know about you guys down under. If things get so bad that elimination of interstate travel is required in the US. Skiing cost delta will be the least of my worries.

 

[dbostedo]

Let's picture a worst case scenario world where:
- international lockdowns are extended for a few more years permanently barring overseas tourists or even interstate tourists and workforce
- unvaccinated are barred from skiing because of government mandated vaccine passports on resorts
- economic depression results in cut back of discretionary spending by families on expensive sports/holidays like skiing
- dying off of boomers and millenials and Gen Z not having the income to partake in skiing and replace the boomer turnover
- intermittent and chronic supply chain issues preventing the gear industry from getting raw, intermediate, and final merchandise from their suppliers to consumers

Will this raise or lower the price of lift tickets, accommodation, price of gear (online and brick and mortar), price of après and similar services like resort restaurants, cafes, hire services, transport to and fro resorts, including plane tickets (a big chunk of skiing expense), price of ski packages, etc?

In short, will a permanent reduction of the ski market be overall inflationary or deflationary?

How do you picture the skiing, as an industry and as a personal hobby, in this scenario?

The general rule is that diminishing demand will cause too much supply and prices to fall. Eventually supply would adjust (i.e. companies would make less product or go out of business) and there would be an equilibrium reached. This is a very simple supply and demand model of course, and usually applies to commodity type goods.

Theoretically, if demand suddenly fell for skiing evenly across the board (all levels, regions, types of resorts, etc.), prices in the aggregate would fall as resorts competed for more limited skier dollars. Of course, this ignores all kinds of possible local effects, so prices in the aggregate may go down - in general, not necessarily in all specific cases.

Some, no doubt, would try to increase prices to maintain their existing revenue. But if competition is open enough (if there's enough similar product out there) that's a loser long term. If they really do offer something special or convince people to go there in some other way, they could potentially succeed with higher prices.

Eventually, resorts that lost enough would go out of business, or otherwise reduce their availability, until supply caught up with demand, and prices would stabilize again.

But it's a really complicated question. I could be completely wrong on all of this, given the infrastructure and variation that exists in skiing in different locations and with different product models. It's certainly not a standardized, commodity product. Passes vs. day tickets, revenue now vs. later, operating times and amenities, etc. all change the equations and I think we'd see a huge variety of approaches to try to deal with reduced demand.

 

[geepers]

Let's picture a worst case scenario world where:
- international lockdowns are extended for a few more years permanently barring overseas tourists or even interstate tourists and workforce
- unvaccinated are barred from skiing because of government mandated vaccine passports on resorts
- economic depression results in cut back of discretionary spending by families on expensive sports/holidays like skiing
- dying off of boomers and millenials and Gen Z not having the income to partake in skiing and replace the boomer turnover
- intermittent and chronic supply chain issues preventing the gear industry from getting raw, intermediate, and final merchandise from their suppliers to consumers

Will this raise or lower the price of lift tickets, accommodation, price of gear (online and brick and mortar), price of après and similar services like resort restaurants, cafes, hire services, transport to and fro resorts, including plane tickets (a big chunk of skiing expense), price of ski packages, etc?

In short, will a permanent reduction of the ski market be overall inflationary or deflationary?

How do you picture the skiing, as an industry and as a personal hobby, in this scenario?

Hi Rich,

Yep, it was a depressing no-ski season for Sydneysiders. However things should improve from here:

• Vax rates Australia wide now over 80% 1st dose and 57% double dosed. NSW is a bit ahead with 89% 1st dose, 68% dbl and expected to reach 70% in next couple of days.
• Re-opening of NSW starts October 11 or sooner
• International travel slotted to resume in November. (Of course it will take a while to reboot the air routes and unwind inbound demand.)

Barring the rise of a new variant the future is looking ok.

The bigger problems have been: the loss of revenue for some businesses catering for snow sports (2 bad years in a row for many ); the rapid increase in domestic ski real estate ; the cost of accomm ; and the pricing of season passes at one particular NSW resort.

 

[Rich_Ease_3051]

Hi Rich,

Yep, it was a depressing no-ski season for Sydneysiders. However things should improve from here:

• Vax rates Australia wide now over 80% 1st dose and 57% double dosed. NSW is a bit ahead with 89% 1st dose, 68% dbl and expected to reach 70% in next couple of days.
• Re-opening of NSW starts October 11 or sooner
• International travel slotted to resume in November. (Of course it will take a while to reboot the air routes and unwind inbound demand.)

Barring the rise of a new variant the future is looking ok.

The bigger problems have been: the loss of revenue for some businesses catering for snow sports (2 bad years in a row for many ); the rapid increase in domestic ski real estate ; the cost of accomm ; and the pricing of season passes at one particular NSW resort.

See Thredbo upping their yearly pass to $1500 while Perisher yearly was more or less the same is the kind of price signal that makes it hard to gauge if the hobby will be inflationary or deflationary on the aggregate.

Accommodation is the biggest cost and regional people had it good on that front. There were many deals to be had gear wise if you didn't rush and participate in the usual pre-season shopping. Petrol is not breaking the $1.50 mark this whole season.

Worth noting Vale reduced yearly pass price for Northern Hemisphere. They may look at Thredbo and see what they can get away with. Or Thredbo might be looking at Perisher's world wide price decrease and may feel the pressure to decrease their ridiculous price.

Regarding variants, I note that Israel just wholesale cancelled the vaccine passports of 2 million Israelis because they didn't get their booster. I don't want to take this thread in a Covid discussion direction, but I think it's instructive given that Israel is ahead of us with Covid trends:

Nearly 2 million Israelis lose Green Pass as new rules enter effect

Document granting access to certain venues for vaccinated and recovered now only valid for 6 months after last shot; coronavirus cabinet to convene Sunday for first time in a month

www.timesofisrael.com

Given our push to vaccinate started last month, March/April would be the 6th month time period when Aussie vaccine passports would be cancelled. Will all those skiers, who got both jabs, want to get a booster just for the sake of sliding down the mountain? I don't know.

I'm in the deflationary camp of this whole thing. And probably not as optimistic as you given the trends I'm seeing. Deflation is positive for consumers, but is not positive for businesses, who provide us the goods and services that enable us to enjoy the hobby.

 

[geepers]

See Thredbo upping their yearly pass to $1500 while Perisher yearly was more or less the same is the kind of price signal that makes it hard to gauge if the hobby will be inflationary or deflationary on the aggregate.

Accommodation is the biggest cost and regional people had it good on that front. There were many deals to be had gear wise if you didn't rush and participate in the usual pre-season shopping. Petrol is not breaking the $1.50 mark this whole season.

Worth noting Vale reduced yearly pass price for Northern Hemisphere. They may look at Thredbo and see what they can get away with. Or Thredbo might be looking at Perisher's world wide price decrease and may feel the pressure to decrease their ridiculous price.

Regarding variants, I note that Israel just wholesale cancelled the vaccine passports of 2 million Israelis because they didn't get their booster. I don't want to take this thread in a Covid discussion direction, but I think it's instructive given that Israel is ahead of us with Covid trends:

Nearly 2 million Israelis lose Green Pass as new rules enter effect

Document granting access to certain venues for vaccinated and recovered now only valid for 6 months after last shot; coronavirus cabinet to convene Sunday for first time in a month

www.timesofisrael.com

Given our push to vaccinate started last month, March/April would be the 6th month time period when Aussie vaccine passports would be cancelled. Will all those skiers, who got both jabs, want to get a booster just for the sake of sliding down the mountain? I don't know.

I'm in the deflationary camp of this whole thing. And probably not as optimistic as you given the trends I'm seeing. Deflation is positive for consumers, but is not positive for businesses, who provide us the goods and services that enable us to enjoy the hobby.

I'm hoping 'Bo 2021 was just an opportunistic cash grab (or a carefully considered price elasticity calculation to make up for some skier number restrictions). They do have the advantage of a loyal following who just aren't that price sensitive and will drop $75 on a lamb shoulder for lunch at Kerala Hut plus same for each of the teenage kids plus drinks, plus, plus... Despite not having skied an Everest day beforehand. Heck, I prefer it myself although I'll only stretch to the Hut's $45 burger. (Well, it's a damn fine burger.... and I'll only do that after a run of Everest days and only rarely. Which is also the way that burger should be ordered.)

Even allowing for the better vertical Thredbo has issues on wind hold days. Which happen often enough so it's not a laydown misere.

Hopefully with "normal" numbers 2022 pricing will revert.

We'll find out soon enough on boosters as the State re-opens. Our brand new-to-the-job this morning State Premier is a go-for-it sort of guy so it could get wild. A big chunk of the health workers were vaccinated in groups 1A and 1B back in March and April - like my wife - so they will be the canaries.

The NSW resorts were getting crowded enough on weekends that they were turning people away. I only ever ski Monday to Friday now. So a small thinning may escape notice.

In the meantime we are seriously considering a trip to Canada.

 

[Idris]

Don't know what is hapening in your part of the world, but in Europe the ski industry continues to grow. Prof of this is the massive building of new apartment blocks and the uprgading/enlarging of lifts.

 

[cantunamunch]

In short, will a permanent reduction of the ski market be overall inflationary or deflationary?

I find the question itself to be a bit of a category error.

If skiing goods demand and skiing services demand falls off enough to cause price change on a significant scale, it will first become less relevant to overall economy. Less relevance -> less effect either way.

By analogy, shipping giant porphyry statues of Jupiter on sailing barges is more expensive now than it was in 1790 - but it affects present day economies not one whit.

 

[CascadeConcrete]

Some, no doubt, would try to increase prices to maintain their existing revenue. But if competition is open enough (if there's enough similar product out there) that's a loser long term.

The ski market is interesting because, while there is decent competition nationally for destination travel, local markets are often pretty sparse. And there are relatively easy ways to differentiate different types of skiers to give them different pricing (day tickets vs season passes, bundling tickets with lodging, etc). A lot of people only have one reasonable option for local skiing, maybe two or three. You pretty much have to be in the Colorado front range, Salt Lake, Tahoe, or New England to have a bunch of options to pick from. And even then, probably one or two of those mountains make a lot more sense for your specific needs than the others. For most skiers, the local mountain can do what they want to do and you're kind of stuck with it.

 

[Rich_Ease_3051]

I find the question itself to be a bit of a category error.

If skiing goods demand and skiing services demand falls off enough to cause price change on a significant scale, it will first become less relevant to overall economy. Less relevance -> less effect either way.

By analogy, shipping giant porphyry statues of Jupiter on sailing barges is more expensive now than it was in 1790 - but it affects present day economies not one whit.

Didn't mean if it would be inflationary or deflationary to the whole economy, but only to the ski industry.

 

[Lorenzzo]

One of the lessons from last year is the more restrictions in place the more people from Texas and Florida will go skiing.

 

[cantunamunch]

Didn't mean if it would be inflationary or deflationary to the whole economy, but only to the ski industry.

Fair enough, but then it becomes predominantly a 'how will supply be affected' question.

 

[Blue Streak]

Let's picture a worst case scenario world where:
- international lockdowns are extended for a few more years permanently barring overseas tourists or even interstate tourists and workforce
- unvaccinated are barred from skiing because of government mandated vaccine passports on resorts
- economic depression results in cut back of discretionary spending by families on expensive sports/holidays like skiing
- dying off of boomers and millenials and Gen Z not having the income to partake in skiing and replace the boomer turnover
- intermittent and chronic supply chain issues preventing the gear industry from getting raw, intermediate, and final merchandise from their suppliers to consumers

Will this raise or lower the price of lift tickets, accommodation, price of gear (online and brick and mortar), price of après and similar services like resort restaurants, cafes, hire services, transport to and fro resorts, including plane tickets (a big chunk of skiing expense), price of ski packages, etc?

In short, will a permanent reduction of the ski market be overall inflationary or deflationary?

How do you picture the skiing, as an industry and as a personal hobby, in this scenario?

Yeah, I’ll bite, since every other economic outcome in this pandemic has been so predictable.
NOT

 

[oldschoolskier]

As the market reduces the prices will increase (to keep shareholder profits) which will further decrease market and increase price until....it can't be increased (backlash) at which point prices will fall to attract list customers. As to when all bets are off.

 

[dovski]

So last year we actually saw more people engage in outdoor sports like biking and skiing. Most shops sold out of their most popular sizes leaving little if any inventory for summer tent sales. This year we have a shortage of new ski gear due primarily to the backlog at ports on both sides of the Atlantic. So if anything this pandemic has been a boon to the ski industry. If you have not booked your lodging at popular mountains you may have some challenges as hotels are booked solid (personal experience with that at Big Sky). That said if demand for skiing suddenly declined you would see an initial decrease in price to try to entice more people to the hill, hotel, ski shop ...etc but overtime that would normalize as the market adjusted to the new level of demand. Basic supply and demand - over supply decreases prices, excess demand increases them, once the market finds a equilibrium prices normalize.

 

[Lorenzzo]

Much like The Buoy is a predictor of storms in the Rockies, advance inquiries by my out of town guests predicts overall skier demand. So far they're breaking records for inquiries.

 

[johnnyvw]

I was talking to one of the guys at a Buckmans shop yesterday...they had their ski swap and tent sale, and all but 6 pair of skis or snowboards sold. He said it was like frenzy feeding. And I overheard an insanely high amount of money in sales for their chain over the past week with the associated tent sale. It doesn't sound at all like the ski market is reducing, if anything maybe the opposite due to it being an outdoor activity.
At the moment, they seem to have a good amount of inventory.