The Crystal Conclusion...

>>5.5% increase per year...about inline with the growth of the U.S. economy, including inflation

Something is cost-neutral if it rises with the rate of inflation (only).  This rate is higher than inflation, and therefore reflects a true cost increase after accounting for inflation.  If all prices rose "about inline with the growth of the U.S. economy, including inflation", then economic growth would be meaningless, because that growth would not have resulted in any increase in purchasing power.  Hopefully a core purpose of economic growth is to gain an increase in purchasing power, not just to barely keep up.

Exactly... the 5.5% rate is a "nominal" rate...if you take out historical inflation of about 2.5% to 3%, that reflects prices increases of about 2% to 3% per year...not much in the grand scheme of things. It is after all a business -one with significant sales volatility due to the inherent nature of the business. Seasons Passes have gone up in recent years to fund renovations, etc. Although I'm not sure it was necessary, it's a nice addition and it makes sense to pass those costs onto the users.

well, cost increases reflecting inflation do make sense: but I'm skeptical that's what will happen. this year's price increases at Summit are but a taste of what is to come.

In any case, I think as much as prices are justifiably increased according to costs...there isn't much of a justification to raise prices if the demand isn't there. Midweek demand at Summit is minimal...hell everywhere. I'm not expert but I question a business model that keeps the masses away because of such high prices. Little areas like Baker or Bridger MT stay in the black because they are cheap....and loyal droves flock there and spend oodles on food and lodging.

-J

A real increase of 3% a year sounds nominal, but it compounds. Since the time I started skiing 40 years ago, if tickets increased at a "nominal" real 3% a year (and I'm not saying they have, I don't have the data), then that an increase of 326% in real terms. If that's accurate. my cost to take my daughter skiing is over 3 times, in real terms, what it cost my dad to take me skiing.

Luckily for me it cancels out - I have one daughter, my dad has three children.

In the case of 2.5%, the increase over 40 years is 268%.

So I'm puzzled at how a real increase of 268% to 326% over that time is a good value, for improvements and maintenance that any business would normally provide. By definition, these are greater increases than the average inflation rate for other things (BTW gasoline has increased substantially greater than inflation if you measure from 1972, but not if you measure from 1980 or after).

Riding the chairs is pretty darn expensive and it does keep alot of folks away. My parents hunted, and followed high school sports. They would never justify paying for a lift. So my intro to skiing was on pins with my explorer post. The less it cost the more I ski

What about the cost of a 7-10 year old kid's season pass going from $50 to $475 or an 11-17 year old's pass going from $400 to $895? All in one year.

Not a goddam nominal thing about that.

"So I'm puzzled at how a real increase of 268% to 326% over that time is a good value, for improvements and maintenance that any business would normally provide."

Travertine, you can't really look at an absolute percent increase over time because of the phenomenon called "the time value of money." it's what drives financial theory. if you look at it on a compounded or individual year increases and back out inflation, you're (again) looking at 2-3% of real price increases per year. I suppose this might not be acceptable if they only had rope tows, but because of the significant "improvements" to the mountain let alone cost increases outside the control of the ski areas (such as insurance that have increased well beyond inflation), then a 2-3% per year (or 286% to whatever on absolute terms) is justifiable.

My point is that ski areas operate for us and they're not trying to "stick it to us" but rather provide a better experience and most importantly continue to operate.

As far as the increase in junior pass holders...not sure on that one!