How Thredbo optimised skiing prices for COVID

Brrr, its cold!

Hello from Thredbo. Today, I am going to analyse how Thredbo has calculated its Lift Ticket Prices in 2020. Now in a normal year, Thredbo would charge about $120 or $130 per day and they’d offer discounts as well for multiple days or for a season ticket. This year however, due to social distancing requirements, Thredbo is limited in its capacity of how many people it can have on the slopes. Not only that, the demand for skiing is up. And that is because everybody wants to get out of their house and out into the fresh air. And people can’t travel overseas of course. So Thredbo has this wonderful opportunity to put up their prices and that’s what they have done and they have done it in 2 ways.

First of all, they’ve put up the price of a Lift Ticket upto $159 a day. That is a record. It’s the most that Thredbo has ever charged for a day by about 20% and they’ve also done away with discounting. So if you want to come here for 2 days or 5 days or even a month, you are still going to have to pay the full $159 per day. And you might say ‘Oh isn’t that unfair to people that want to ski for a longer period of time’? And it may well be, but Thredbo knows that it can get enough demand from people wanting to pay that amount, that they can still afford to charge that price.

Let’s also remember they still have to run their resort and they have a lot of fixed costs of running the resort and need to become profitable somehow and if they couldn’t find a way to be profitable, then they couldn’t offer skiing to anybody at all. So it is actually a bit of a of win-win even though some people might feel like they are paying more than they had to in previous years.

Now I would like to talk about skiing and Dynamic Pricing because in my view, if there is any industry that is well-suited to Dynamic Pricing, its skiing because nobody can predict what the weather is going to be. Now Thredbo sets their prices at the start of the year and then once they are set, they are set and they don’t change and what I would love to see Thredbo doing is updating its prices everyday based on the existing number of bookings that they’ve got and weather in particular. They know that if there is a big dump, more people are going to come to the snow and they could afford to put their prices up in that situation. So I would love to see them move towards that. I am a little bit surprised they haven’t given that Thredbo is owned by a group that also owns hotels that do Dynamic Pricing. And I would love to see Thredbo taking that concept from the hotels and applying it to lift tickets as well.

And now, I’m off to the slopes..

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