By Beth Carter
Posting in Cities
San Francisco startup Liftopia uses big data to help 250 U.S. resorts sell lift passes online and offers a service that helps them adjust pricing and promotions in real time.
It’s the dead of winter, skies are grey, the sun sets early, it’s easy to long for warmer days. But with winter comes snow, and when the snow comes, skiers rejoice.
Over the past few years, my own excitement at hitting the slopes each season has been numbed by the $75 day pass to enjoy my home mountain of Alta in Utah. Many skiers and snowboarders are feeling the pinch. With a sport that's already so expensive once you allocate gear, plane tickets and lodging, the unwavering and ever-growing prices of resorts are disillusioning, even for die-hards.
Until a few years ago, the ski industry - which accounts for more ticket sales than the NFL, NHL and NBA combined - was notable for some of the best hardware (snowmaking, park building, equipment and apparel) and some of the worst sales processes (what other sport still relies primarily on a walk-up ticket window?).
But the industry is emerging from the dark ages, thanks in part to Liftopia, a San Francisco startup that aspires to help resorts generate incremental revenue while simultaneously cutting skiers and snowboarders everywhere some slack.
Overhauling an antiquated sales model
Through the ski sticker-covered doors, colored crepe paper - leftover from the previous evening's holiday party - spirals from the ceiling at the Liftopia offices. The space is filled with beanie-wearing employees and decorated with colorful murals that remind visitors of a ski shop. It's bright and warm compared to the weather outside, and full of potential to make your experience on the mountain better.
Liftopia was co-founded by two former Hotwire employees, Evan Reece and Ron Schneidermann. Their idea to change the ski market snowballed out of casual observations from working in the travel business. For instance, the two thought the fact that the price of a day at a resort generally remains static despite relying completely on factors (snow conditions, weather) that are completely uncontrollable seemed odd. Why not create a central marketplace where resorts could manage price points in real time and sell tickets in advance. The business model would be the opposite of Groupon, something sustainable for the suppliers long term, not just for customers.
“We sell a weird product,” says Schneidermann, who is Liftopia's COO. “It’s a date-specific, name-specific non-refundable lift ticket. That’s not common. As skiers, we grew up going to ski shops the night before or morning of, that’s how we’re conditioned.”
With $5,000 each and makeshift home offices, the pair bought access to a lot of industry data and set about cold-calling contacts that Reece made while working at Hotwire. At first some resorts were skeptical, worried that it might impact margins. This is where the anti-Groupon model came into play - Liftopia had to bring value for both resorts and skiers.
“If the supply side does well, then you increase value for the consumer,” Reece says, “because then the supply side can say ‘our business is more efficient so we can offer these premium products, improve our infrastructure and improve the guest experience.’”
Arduous uphill climb
Liftopia launched in October 2007 with just seven partners, selling 900 tickets total that first season. 900 may seem like a lot, but in the day before this interview was conducted in late 2012, the site sold eight times that amount.
The first big break for Liftopia came in its second year, when Park City Mountain Resort in Utah agreed to partner with the company. That was a mixed blessing. Liftopia had burned through its funds, and had just a $2,000 marketing budget to make its biggest client to date happy. No pressure.
“That’s a one-shot deal,” Schneidermann says. “If you can’t sell lift tickets for Park City, you don’t deserve to be in the business. That was the make-it-or-break-it season, and to go into it with two arms behind your back on the marketing side was really stressful.”
Reece and Schneidermann set about calling ski shops and telling them about their website, and writing a lot of ads on Craigslist. Ultimately, they grew bookings from $40,000 to $500,000 that year.
Today, the Liftopia platform enables 250 resorts all over the United States to sell tickets, lessons and rentals in advance - while allowing them to retain control over pricing and the quantity of tickets available. The startup is also branching out into new services, such as Cloud Store, a platform for resorts to sell tickets on their own websites, as well as mobile applications for Apple iOS devices. When you shake your smartphone, the Liftopia software tells you which resort got the most snow in the past 24 hours.
Getting more skiers on the mountain
The motivating idea behind Cloud Store is to use big data analytics and business intelligence to benefit the whole industry. The platform can adjust prices and quantities in real time based on input that resorts receive from their local market. Liftopia goes a step further with an analytics service called Partner Intelligence that lets resorts review their data and make better business decisions. If a resort is using the tool, Liftopia can point out low performance dates for the rest of the season and suggest pricing adjustments.
Last year seven resorts were using Cloud Store, but this year Liftopia expects to have 50 signed on before the end of the season - enabling them to manage their operations far more efficiently and profitably.
“A lot of people to this day say, ‘Oh how cute, you’re in ski,’” Reece says, “but what we’re hoping is, because we got to start from scratch, that ski resorts will actually run their businesses setting an example for travel instead of just catching up to it.”
One of the more quiet disruptions that Liftopia is working on is the opening up of an industry with a reputation for being exclusive. Reece and Schneidermann believe that the “look at how old his gear is” mentality is hurting the ski industry. That's one reason you won’t see someone hucking themselves off a 30-foot cliff in any Liftopia promotions.
“That everything has to be accessible to any level is really important to us,” Schneidermann says. “No one wants to look like a dork.”
Jan 13, 2013
Nice little story on the who and why. A little on the how..? Do they take live ticket sales, discounting, channel weather forecasts etc to predict sales vol and then apply discounting rules to prices offered on their website?
I live just under Teton Village in Jackson Hole. Lift tickets here are well over $100 and have been unaffordable except to wealthy families for years. It's been a sport of the rich for some time and while online booking might allow the less well off to find those rare ticket price drops, which do occur, the other costs are more fixed. The overpriced ski industry is on its way out if it depends solely on skiers which is why the big players are trying for year round status. But once transport costs get too high, the party will end.