To help us better understand this phenomenon, I Love Ski has spoken with Tony André, manager of the European market in Liftopia.
According to Tony André, ‘customers are the first to benefit from this new price. « Buy in advance and save money » is a clear and easily understandable message that builds long-term confidence between the skier and his ski resort. When they get their ski passes in advance for a certain date, the skiers know that the rate offered is the best available and that the demand will increase this price.The operator, on the other hand, captures the income before, ensures a better experience on the site by avoiding long lines and can better forecast the peaks of influx.’
Yield management: risk compensation
‘Dynamic pricing is for people who don’t necessarily ski,’ explains Tony André. ‘The sale concerns dated passes, and the resorts pay the risk, rewarding the customer who has purchased in advance. This way, the resorts are blocked in the act of purchase, thus avoiding last-minute purchases that often depend on the weather.’
Technically, the company has a web store that distributes this strategy, with an inventory of passes according to the dates, with analyzed data of the sales made, but mostly geographic research data. The capture of the demand validates if the price strategy is relevant, since the income generated by the research must be optimal, regardless of the demand. Only a flexible pricing strategy can achieve such a constant conversion rate.
A sales channel that, according to the Liftopia company, does not manage to cannibalize the marketing initiatives launched by the complexes that have previously rewarded loyalty thanks to the use-by-use cards. ‘The SPP is an intelligent response to a dispersion of local customers, allowing greater flexibility and rewarding local skiers, but losing important problems such as attracting new skiers and being less climate dependent.’ According to Liftopia, ‘we are in another segment, it’s about maintaining a coherent combination.’
Why don’t these new techniques apply in France yet?
‘The obstacles are rather psychological, because the tour operators often have a vision focused on the operational part and almost don’t imagine that skiers are already used to buying this way to reserve their transport or their accommodation in the mountains. Price networks are increasingly complex because we have to respond to highly segmented and volatile customers, which leads to a massive use of promotions or pack sales by external companies that collect customer data. They still don’t use dynamic pricing. Some fear lowering their average price or damaging the sensitivity of local actors, but dynamic pricing maximizes the rate of return for each day of the season and facilitates operational planning while strengthening the trust link with the buyer. Many imagine that the implementation is complex and will interrupt the existing systems, but it won’t do it at all. The advantage of analyzing data in real time is that you’re able to measure the impact of your prices and adjust your strategy continuously. To try it is to adopt it!‘, explains Tony André, from Liftopia.
The only necessary step is to agree to consider your pricing policy differently by leaving behind some previously used models. Many resorts want their price list to be more flexible in order to attract a more unpredictable digital customer base. Several French resorts are going to take this step, paving the way for many more to come. It’s exciting because this is an industry that is in full evolution and this great innovation comes at the right time.