By Lauren Chapey
As the holiday season quickly approaches, what will winter trips and vacations look like in the Covid-19-induced “new normal”? While in 2019 a record-breaking 115.6 million Americans traveled during the winter holidays, this number is expected to drop considerably in 2020. Early holiday bookings for Christmas and New Year’s Eve this year have decreased by 35% and 33% respectively, and those who are planning to travel are not straying too far--international travel decreased 65% during the first half of 2020.
With dramatic declines in travel and vacation bookings, affected industries are looking for creative ways to recover from a devastating spring and summer. In the skiing industry, Magic Mountain—a laid-back ski hill in Vermont—has found clever ways to revamp its customer experience and cut costs at the same time.
Skiing: An industry on ice
COVID-19 hit the ski industry hard, forcing many slopes to shut down practically overnight in March 2020. Given that the spring break season normally accounts for 20% of a ski area’s revenue, the timing was especially brutal. The 2019-2020 season was on course to be the fourth best recorded ski season in terms of visitors. Instead, its sudden and premature ending caused a 13.9 % decrease in total visits and led to a $2 billion loss to the ski industry.
As ski slopes struggled to make it through the summer with less padding from winter season revenue, they set their sights on making a comeback in the 2020-2021 winter. Although mountain capacity and lucrative lodge services like dining and storage will be reduced, skiing is relatively well-positioned for the pandemic: it’s outdoors, physically distanced, and most skiers wear masks because of the cold. Many mountains are taking advantage of this and charging customers normal or even increased season ticket prices, in the hopes that skiers will risk the possibility of government-mandated shutdowns to enjoy some relative normalcy amidst a shortage of vacation choices.
Magic Mountain: Taking a customer-centric approach
While some mountains are boosting prices to make up for losses, Magic Mountain in Londonderry, Vermont is taking a more customer-centric approach—and winning at it. Magic Mountain is using costovation—or low-cost innovation—to win in the midst of uncertainty. Contrary to its competitors, Magic Mountain has decreased ski lift prices and developed creative new passes and lift packages, such as a family package that doesn’t break the bank during today’s pandemic-induced recession. It can make these customer-centric offerings possible by limiting its days of operation to the weekends only, when the vast majority of skiers are able to visit. For Magic Mountain’s target customers, including students and young professionals, this is a win. For Magic Mountain, the pay-off is already evident: early-bird pass sales are up 59%, and Magic already sold more passes from April to June of 2020 than they sold during all of the 2019-2020 season.
What is costovation?
Costovation is innovation that benefits customers while reducing costs for businesses. Magic Mountain has chosen to put its customers first by reducing costs creatively to improve both its own operations and customer satisfaction. Costovation provides a framework for businesses to cut costs without hurting the customer experience because, they are able to direct their cost cutting in a way that prioritizes the customers’ top needs but removes the things they don’t care about.
First key to costovation: Choosing a specific target audience
Most ski resorts operate for every single day of the ski season. While some retired or local residents with flexible schedules may be able to take full advantage of every minute of a season pass, most skiers, especially young professionals and college students, will hardly ever ski during the weekdays. This means that they end up paying for more than what they’re actually able to use.
Homing in on this younger audience, Magic Mountain operates its ski lifts only Thursday through Sunday. Then, from Monday to Wednesday, Magic offers mountain rentals for private group events, galas, charity events, and even weddings. This allows the mountain to offer significantly decreased season pass prices because it cuts operations costs while still offering its customers what they want.
Developing new offerings designed for the way people really use the mountain
Even before the pandemic, Magic catered to its target customers by offering creative season passes. Take the Shredder Unlimited pass, for example, which is for their 18-29 year-old target audience. At almost half the price of an Adult Season Pass, the Shredder pass is a great option for young professionals and students who otherwise couldn’t afford a season pass.
Magic also cut costs and introduced creative season passes specifically for the 2020-2021 season. Larger families struggling during the recession brought on by the pandemic can purchase the One Big Family pass, a flat rate pass for families of any size with children up to age 21. Additionally, this season’s early bird special prices were 20-30% lower across the board compared to their 2019-2020 early-bird prices. These new passes and price cuts show that Magic Mountain understands how to put its customers first. Plus, their class-act moves will win customer loyalty by sympathizing with those hardest hit by today’s tumultuous times.
Prioritizing customers over its bottom line helps Magic win big
Many may have viewed Magic Mountain’s price slashing during one of the most difficult times for ski areas in recorded history as risky and even foolish. However, Magic has actually come out on top for its customer-centric approach – Magic has already seen a 40% increase in revenue from early-bird sales this year. Following three consecutive years of pass-sales growth, Magic’s use of costovation in the face of an economic recession allowed it to continue its growth.
Magic Mountain made a smart decision in putting its customers first amid financial woes. By understanding its target customers and cutting offerings they aren’t interested in, Magic has been able to decrease costs in a way that actually improves the customer experience. Its sympathetic and innovative approach to customer concerns around the recession and pandemic through price cuts and creative pass packages make Magic a go-to for many struggling customers. Costovation helped Magic Mountain excel in a less than an ideal time, and others can look to this model for inspiration to do the same.