Investigating Vail's Crowd Problem

Summary

Vail Resorts has aggressively expanded by acquiring ski resorts across the U.S. and globally, from small hills to major destinations. While the Epic Pass model has brought millions of new skiers, overcrowding has become a serious issue, leading to frustrated visitors and locals alike. Efforts to expand facilities are often met with resistance due to concerns over traffic and environmental impact. Snow conditions and the significant costs of snowmaking also pose challenges. As growth slows, Vail faces the dilemma of balancing expansion with the sustainability of the ski experience, highlighting the difficulties in maintaining growth in a resource-constrained industry.

Takeaways

• 😀 Vail Resorts has not seen a new ski resort built in the U.S. in 45 years, so they began acquiring multiple resorts to dominate the market.
• 😀 Popular ski resorts, including Park City, Breckenridge, and Whistler, have seen overcrowding due to the increase in skiers visiting every year.
• 😀 The increase in skier numbers has created a negative impact on the ski experience, including longer lift lines and crowded slopes.
• 😀 Resorts like Breckenridge experience long wait times at gondolas during peak periods, making it difficult to accommodate the surge in visitors.
• 😀 The town of Breckenridge, while historically a mining town, was bought by Vail in the 1990s, but Vail only owns a limited portion of the land.
• 😀 The expansion of resorts is heavily impacted by local governments and residents who are hesitant to approve new developments due to concerns over traffic and infrastructure.
• 😀 Breckenridge faced backlash when a planned expansion project was downsized and relocated after local opposition to the construction of a hotel and condominium complex.
• 😀 Ski resorts rely on snowfall, but unpredictable weather patterns make snowmaking a costly and necessary process. Artificial snow is expensive and not ideal for the skier experience.
• 😀 Vail’s business model of selling Epic Passes to a growing customer base is strained by overcrowding and the limitations of resort infrastructure.
• 😀 Despite significant profits in 2022-2023, Vail Resorts saw a slight decrease in Epic Pass sales in 2024, signaling potential challenges to their continued growth.

Q & A

Why haven't any new ski resorts been built in the US in the past 45 years?

The main reason is that there is no more available land for new ski resorts. Private land is scarce, and building on public land requires extensive government permits, which makes it highly difficult.

What strategy did Vail use to expand its ski resort business in the 1990s?

In the 1990s, Vail started buying up various ski resorts across the U.S., including popular ones like Park City, Breckenridge, and Keystone. This expansion allowed them to control major ski destinations and increase their reach in the ski industry.

How does the increasing number of skiers affect the experience at ski resorts?

The rising number of skiers leads to overcrowding, making the experience worse. Crowded lift lines, slopes, and congestion during peak times such as holidays result in longer wait times and less enjoyable skiing.

How long can it take to get up the mountain at Breckenridge during peak times?

During peak times, such as the morning rush, it can take an hour or more to get up the mountain due to long lift lines, particularly at the Colorado SuperChair on Peak Eight, which can carry only 600 people every 10 minutes.

What challenges would Vail face if they wanted to double the speed of the gondolas?

Vail would need to redesign and plan the gondola system, submit numerous documents to the town council, and gain approval from local residents, who might oppose the idea due to concerns about even more people coming to the resort.

Why is there growing resistance from local residents to ski resort expansions?

Local residents are becoming less supportive of expansions because they are concerned about increased traffic, overpopulation, and the negative impact on their towns. With the growth in skiers, the towns are feeling the strain on resources like parking, housing, and services.

What happened to the Breckenridge Grand Vacations project?

The project, which was initially approved in 2018 to build a hotel and condominium complex, faced significant local opposition. After the crowds from the COVID-19 ski season, the town council reversed its approval, and the project was scaled down significantly.

How does snow affect the operation of ski resorts, and what are the costs of snowmaking?

Snow is crucial for ski resorts, and the lack of natural snowfall can severely impact operations. To compensate, resorts often rely on snowmaking, which can be very costly. Producing snow on one acre of terrain can cost between $1,000 and $2,500, and snowmaking equipment can cost thousands of dollars.

How has Vail’s strategy of purchasing ski resorts helped mitigate risks in the business?

By acquiring ski resorts in different regions, Vail has spread out its risks. In the event of bad snow conditions at one resort, other resorts in different regions can still generate profits, helping to maintain the overall business health.

What challenges does Vail face in maintaining consistent growth despite expanding its business?

Vail faces a 'negative network effect,' meaning that as more people use the resorts, the experience worsens for everyone. This makes it harder to keep growing, as overcrowding leads to dissatisfaction, requiring large investments to improve infrastructure and manage increased demand.