Costs of a ski resort

[StuckonI70]

Apparently, Silverton's purchase of the liftline mining claims cost as much "as a condo in Telluride" in 2000, and I think the chairlift was like $20K, used from Mammoth.

 

[Frankly]

Not that I know anything but my general impression is that the ski area operates at a break even point and that's all good so long as real estate continues to appreciate. And in the case of destinations, tourist visits.

I bet if you look at ski area ownership you'll see a lot of secondary investments in property positively impacted by the ski area ;-p

So making a profit may be desirable but it isn't always necessary. Think of it as a doctor's Alpaca farm....

 

[Chris Walker]

Not that I know anything but my general impression is that the ski area operates at a break even point and that's all good so long as real estate continues to appreciate. And in the case of destinations, tourist visits.

I bet if you look at ski area ownership you'll see a lot of secondary investments in property positively impacted by the ski area ;-p

So making a profit may be desirable but it isn't always necessary. Think of it as a doctor's Alpaca farm....

I don't know anything about the ski resort operating business but in the movie theater business (a small role in a previous life) there was a saying: "Movies for show, popcorn for dough." The core business isn't always the main profit center.

 

[LKLA]

I don't know anything about the ski resort operating business but in the movie theater business (a small role in a previous life) there was a saying: "Movies for show, popcorn for dough." The core business isn't always the main profit center.

Popcorn has a 95% profit margin - it goes down to 90% if customer uses "butter" Movies alone have upwards of 60% of their revenue going towards "film exhibition costs". Even higher if they are tent-pole titles and higher even if they are being shown on premium screens (I-Max).

Concessions typically account for approximately 70% of revenue for many theater owners (Cinemark, AMC, Regal), and while average ticket is around $7.50- 8.00, average spend on concessions per patron is around $5.50 - 6.00.

But, it still all comes down to the core business - in this case movies. If the movie slate is poor and the box office is down - like it is this year - then movie theaters will not do well because at the end of the day people do not go to a movie theater for the food . Movies get bring people in - once there try to get them to drink some liquid sugar and eat some popcorn with liquid butter and munch on some nachos with liquid cheese.

 

[David Chaus]

Movies get bring people in - once there try to get them to drink some liquid sugar and eat some popcorn with liquid butter and munch on some nachos with liquid cheese.

Whereas, if I’m willing to wait few weeks, watch the no-longer-new movie on iTunes or Netflix, mix my own extra strong hot chocolate, pop my own gourmet heirloom variety popcorn with real butter, and melt some nice Gruyere or Manchego or Fontina on my own nachos in my own convention oven, for $5.99 for 2 people, then the movie theatre is similarly screwed. I am still having a great time.

It is the perceived urgency and immediacy of “see it when it’s new” that drives the movie business. I think skiing is a little different because the experience of a powder day is really distinct and different than skiing a week after a storm. And even if most people are not laying fresh tracks but rather skiing cut up crud, or staying on the groomers, a given ski area/resort will see an increase in business on days or weeks with significant snowfall.

Hmm....maybe the business models aren’t that different. The perception that you’re somehow missing out if you don’t go when there’s a dump of snow is pervasive, even among those who don’t really benefit from skiing under those conditions. I guess that’s like the opening of a blockbuster.

 

[LKLA]

Whereas, if I’m willing to wait few weeks, watch the no-longer-new movie on iTunes or Netflix, mix my own extra strong hot chocolate, pop my own gourmet heirloom variety popcorn with real butter, and melt some nice Gruyere or Manchego or Fontina on my own nachos in my own convention oven, for $5.99 for 2 people, then the movie theatre is similarly screwed. I am still having a great time. Nothing is a perfect comparison, but we all know that.

It is the perceived urgency and immediacy of “see it when it’s new” that drives the movie business. I think skiing is a little different because the experience of a powder day is really distinct and different than skiing a week after a storm. And even if most people are not laying fresh tracks but rather skiing cut up crud, or staying on the groomers, a given ski area/resort will see an increase in business on days or weeks with significant snowfall.

Hmm....maybe the business models aren’t that different. The perception that you’re somehow missing out if you don’t go when there’s a dump of snow is pervasive, even among those who don’t really benefit from skiing under those conditions. I guess that’s like the opening of a blockbuster.

One business sells the experience of watching a movie and popcorn and the other sells the experience of sliding on snow and gloves so they are indeed different. Heck, a privately owned 50 screen theater circuit is very different than 11,000 screen theater circuit like AMC and Mount Peter Mountain is very different than Mammoth Mountain.

While it is true that many people feel the urgency to see movies - everyone seems to be focused on instant gratification these days so movies are far from being unique- it is equally true that the experience of seeing a movie at a theater is very different than at home - and that in many cases a movie theater affords a backdrop that allows people to do certain things that they could not do otherwise (go on a date for example or watch a movie with a group of friends).

What drives the movie business is nothing other than movies. Same as what drives the ski business at the end of the day is snow. We can sit here and split hairs till the cows come home but that is the reality. If the movie slate is good, theaters will do well (even better if they can sell lots of concessions and premium tickets). If there is snow, snow resorts will do well (even better if lots of people buy chili bowls and take lessons).

Just look at the results from the movie theater companies over the last 2,3,4,5,6 years and this year