2. Objectives For Today’s Meeting
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
• Level set understanding of competitive environment and situation at
SSRC
• Determine core issue company is facing
• Review and evaluate recommendations
• Review implications and risks of recommended action plan
• Next steps in implementation plan
2
3. Executive Summary
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
• Ski destination resort industry increasingly competitive
• SSRC doing well, but losing share of Colorado skier market
• Customers spending fewer of their vacation days skiing on the mountain
and repeat visit rate low
• SSRC needs to grow revenue by attracting new customers and retaining
current customers
• Two-prong approach: Pricing actions and volume driving actions
• Will lead to higher revenue yield and increase # of skier days
• Add customer value and balance demand
• Implement pricing actions within 3 months, volume driving actions
between 4-6 months, review program effectiveness in one year
3
4. Competition increasing and SSRC’s share of market
declining
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
• SSRC had its best year ever (‘92/’93 season)
• Positioned as one of the premier North American ski resorts
• Direct competitors in Colorado area include Vail/Beaver Creek,
Aspen/Snowmass, Crested Butte, Telluride, and Ski The
Summit
• However, customers spending fewer of their vacation days
skiing on the mountain
• Customers looking for other wintertime activities (eg. Snowmobiling)
• SSRC’s share of Colorado skier market has steadily declined
since 1990
• SSRC’s repeat visit rate was low, even compared to other
resorts
4
5. Core Issue Facing SSRC
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
• How can SSRC continue to grow revenue in an increasingly competitive
ski destination resort industry?
5
Grow
Revenue
Attract new
customers
Retain
existing
customers
6. Recommendations – Two Prong Approach
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation 6
1. Pricing
Increase multi-day discount
on lift ticket
(4 and more days only)
Seasonal variance lift ticket
(peak vs. non-peak)
Repeat customer discount
2. Volume
(# of skier days)
Expand SCRS reservation
system
Implement commuter
service from airport
Market to international
skiers (destination)
Legend:
Attracting new customers
Retaining existing customers
Both sets of customers
7. Optimize Price for Higher Revenue Yield
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
• Current discount level not competitive, does not provide financial incentive to buy
• Provide better customer value and increase multi-day ticket sales
• Incremental revenue to offset margin lost on multi-day discount
7
Pricing
Increase multi-day
discount on lift ticket
(4 and more days only)
Seasonal variance lift
ticket (peak vs. non-peak)
Repeat customer discount
• Three season pricing: Peak @ $45 (Christmas, New Year’s, March Break), Regular @
$42, Value @ $37 (Nov 26 – Dec 11, April 5-close)
• Bring pricing more in line with direct competitors Vail/Beaver Creek & Aspen/Snowmass
• Balance demand; attract customers in slower periods and increase margins in peak
periods
• Repeat visit rate low at 55%
• Incent customers to return by offering additional discount to drive sales and loyalty
• Incremental revenue from additional sales to offset margin lost on discount
8. Increase # of Skier Days to Lift Revenue
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation 8
Volume
(# of skier days)
Expand SCRS reservation
system
Implement commuter
service from airport
Market to international
skiers (destination)
• 20% of customers used SCRS to reserve in ‘91/’92, trend increasing
• 75% of these customers used toll-free #, with 60k calls receiving busy signal
• Expanding capacity will allow more reservations to be made, increasing sales
• 81% of business from customers in US, outside of Colorado
• Commuter service adds value and easy transport to mountain from Yampa or
Steamboat Airport
• Differentiation can help add value in ticket prices compared to other resorts
• International skiers segment growing in US
• Willing to pay premium for premium destination resort
• Incremental revenue from sales to this segment offsets cost to market to this
segment
9. Implications & Risks
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation
Implications
• Two-prong approach is balanced
and conservative
• Will lead to higher revenue yield
and increase # of skier days
• Deliver more value to multi-day
skiers and repeat customers
• Maintain position of premier
resort, in kind with Vail & Aspen
• Positive impact to local residents
as business in area increases
9
Risks
• Little data on customer acquisition or
retention costs – need to validate
information
• Pricing actions’ impact TBD – could be
viewed negatively by customers or not
competitive given other resorts’ actions
• Unable to gain market share
• Uncertainty of how KIC (parent
company) will respond to
recommendations
10. Implementation Plan
Objectives
Executive
Summary
Situation Analysis Core Issue Recommendations
Implications &
Risks
Implementation 10
Research & Analysis
Conduct analysis on pricing actions
and feasibility, effectiveness
Time Immediately
Implement Pricing Actions
Determine pricing actions’ details
and implement in fee structure
3
months
Expand SCRS reservation system
Expand reservation system toll-free #
capacity to be able to take in new
reservations
4
months
Implement Volume Driving Actions
Introduce commuter program and market
to international skier segment
6
months
Post Implementation Review
Review and analyse effectiveness of
pricing and volume actions
1
year
11. How to
improve
profit?
Increase
Revenue
Reduce
Costs
Fixed
Costs
Variable
Costs
Volume
Revenue
Capture
Increase
# of skier
days
Improve
Mix
Optimize
Price
Create
commuter
service from
airport
Market to
Internat’l
skiers
(desination)
No
Change
Increase
multi-day
discount
Seasonal
variance
Teen
Program
Repeat
customer
discount
Lift
tickets
Accessory
Shop
Ski school
Restaurant
Lodging
Other
wintertime
activities
On-
Mountain
Dining
Summer
activities
Current
products
New
products
Expand SCRS
reservation
toll-free # to
avoid busy
signal
Exhibit: Decision Tree
