When COVID-19 hit in March of 2020, the winter ski season at Jackson Hole in Wyoming was winding down, so the resort closed early and picked things up a few months later when its summer season opened. It helped that skiing and other mountain activities, like hiking and biking, are sports that allow for social distancing. The resort accommodated safety restrictions by limiting occupancy in restaurants and other places that people gather, and also managing the number of people on the mountain at any one time.
Even though social distancing restrictions are lifting, the resort will continue to manage the density of visitors using a process it launched during the pandemic, Molly Wolanski, the resort’s reporting and analytics director, told CFO Dive. The goal is to maintain the safety of visitors. But the leadership also learned from the exercise that they can give customers a better experience by managing density in a way they didn’t do before.
“It’s a comfortable carrying capacity,” Wolanski said. “It’s not meant to be a max. It’s meant to be a safe and enjoyable amount.”
The poster child for mismanaging volumes is the parent company of Vail Resorts, which in February was slammed for over-selling its so-called Epic season passes at a discount and allowing so many people on the mountain that customer experience suffered.
“Anger is being directed at the owners of Vail [and its other properties],” the Denver Post reported February 28, “because of Vail Resort’s ‘epic’ fail – a record number of season pass holders, attracted by the … discounted pricing, ascending on mountains that are understaffed, undersnowed and overcrowded.”
“They basically oversold their passes and there are insane lines,” said Wolanski. “They have no management of it and it’s coming back to bite them.”
Under Jackson Hole’s process, now in its second year, the leadership team sets a volume base at the beginning of the winter season using data the finance team has been collecting from its point-of-sale software and then migrating the data to analytics software, which puts the information into a format that leadership can understand and make decisions against.
“Our point of sale software is the software where the limits are actually set, but there’s no analytical tool, no easy way to visualize or report on what that is,” Wolanski said. “So, we bring that data into Prophix [their analytical tool] and that allows us to see it, do something with it. It’s more or less yield management.”
The finance team can’t predict when the snow will be good and when it won’t be, but it has a good idea from previous seasons what its capacity will be at different points in the season. In the early weeks, for example, it knows all of its lifts won’t be operating, so it takes that into account, and it knows at other points there are relatively predictable ups and downs.
“So, we look back at five years of history and can normalize that data,” Wolanski said. “We can use a five-year average, maybe dropping the high and the low, and get an average that normalizes our season. That’s our new base of where we expect visitation to be for the coming year, and that’s our starting point for forecasting.”
The finance team knows weekends will be busier than weekdays, so as part of its normalizing process, it matches, for example, Saturday to Saturday rather than December 13 to December 13, so it can compare apples to apples.
Once it has its baseline set, it looks at the sale volume of its products. Each product is based on the sale channel a skier accessed to get the day or half-day ticket. An online sale at a seniors discount, for example, is a product. An in-person purchase at the resort is a product. A discounted sale through a lodge with which the resort has a relationship is a product.
“Each of these categories, or products, has a yield on it, so when we go to set how many day tickets … we want to sell … we’re trying to achieve revenue expectations for each of those,” she said.
There are no limits on some products, such as a season ticket holder and an in-kind ticket that employees at other resorts are given. But, based on what capacity looks like at a given point in time, the resort will push, or limit, other products to keep the mountain as close to optimal use as possible.
“If we know we have what might be a slow weekend, we can see tickets aren’t booked that much, so we can tell marketing to push this weekend,” she said. “Or we can say, our ticket office needs to accommodate absolutely anyone who walks in. Sell, sell, sell and we can achieve our daily revenue expectations. So, it’s financial management.”
Smoothing out volumes in this way helps keep the experience good for customers but it also helps the resort allocate resources more efficiently.
At the beginning of each season, based on the baseline that’s set, the finance team allocates money upfront to different uses. If the leadership asks marketing to push a type of product to try to fill an expected downturn in midweek traffic, for example, the push will use resources that have already been allocated, a more efficient approach than having to allocate new money.
“We don’t always know in advance of a season where we’re going to push,” she said. “We know every year we might need to push 10 pieces of our season, so in making a decision that this upcoming week is one of those, the dollars are already accounted for. It’s just where to apply them.”
Other money-making parts of the business also use the daily reports on skier capacity Wolanski generates.
“Our food and beverage locations know what our visits might look like,” she said. “They might make decisions outside of finance for that: how many staff they’re going to bring on, how they’re going to manage what looks like it’s going to be a busy weekend.”