Recession a bonus for ski lift ticket reseller Liftopia

A down economy means that more bargain-hunting skiers are seeking tickets closer to home. It also means more business for Liftopia.

In 2005, two mid-level employees from Hotwire started Liftopia, a business to help ski resorts sell more lift tickets. Taking what they knew about yield management in the travel industry, they figured that resorts would jump at the chance to move more people onto their lifts, especially on slow days.

I liked this company when I first met its founders, Ron Schneidermann and Evan Reece, in 2006 because I saw it adding clever and modern Web methodologies to a traditional business. The company has done acceptably well since its founding. I feared, though, that the recession would kill this concept. Who's spending money on skiing in 2009, after all?

But as it turns out, the recession has been a gift to the small company. Yes, people are spending less on leisure. But when they do, they're staying closer to home and looking for value. What Liftopia delivers is right for these times: it matches people who want to ski for cheap (and not travel far to do so) with ski resorts desperate to bring people to their sites on what would otherwise be slow business days.

The road to Kirkwood
The path to success for this company has not been the one the founders planned on. The founders originally plotted their customer acquisition strategy this way: get the big resorts first and then watch the rest of the industry fall into line. They wanted to be the go-to shop for value-priced lift tickets, and they thought that starting at the top was the way to go.

Except that the big, successful resorts didn't want anything to do with the start-up. As Schneidermann tells it, the ski industry is filled with fly-by-night lift ticket resellers run by amateurs looking for free passes for themselves. To a resort like Kirkwood, Liftopia looked like one of these upstarts and not worth the trouble.

The Liftopia team found it easier to get contracts with smaller resorts. These contracts don't generate huge revenues for either the company or the resorts themselves, but slowly, resort by resort--in a form of business battle more akin to trench warfare than the air war the founders had planned on--Liftopia has been making progress.

Liftopia has also scaled back its technology vision. The company is capable of automatically generating lift ticket prices based on moment-to-moment sales figures and historical data. It initially pitched these algorithms to the resorts. But for the resort owners, this was too much tech; they just wanted a way to offer reasonably-priced tickets to get a few more skiers onto the lifts. Now, Liftopia pushes the ease with which it can manually update prices, rather than its automated-pricing engine. The small ski resort owners that Liftopia has as customers, Schneidermann says, are not in general run by aggressively tech-forward wonks looking to actively squeeze every penny out of their resources. They just want to make a few bucks and stay afloat.

Still, Schneidermann says, since "resorts don't have budgets to push promos or software in place to react effectively to drops in demand," he does feel that Liftopia has a lot to offer--especially since right now "people are deal-hunting."

And, finally, after the slog of winning over about 85 small to midsize resorts as customers, the A-list resorts are biting. "You can't keep charging a flat rate in a down economy," Schneidermann says, explaining the shift in his customer base.

In January, Schneidermann says, Liftopia sold more tickets than it did in the entire previous season.

 

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