Vail Resorts CEO Robert Katz was looking for ways to energize a boring business in the stale skiing industry when he had a simple idea: to reinvent the season pass.
Some seven or eight years ago, Vail Resorts slashed the price of its season pass from $1,500 to $600. Then Katz started finding new ways to tailor the pass to customers' wants and needs, using the information gleaned in the process to mine their profiles and deliver better products.
The results have been stellar — a company considered a leading innovator in the vacation and leisure industries and a stock that has outperformed the market. Vail shares have risen more than 40 percent in 2017 and more than 300 percent over the past five years.
"Everyone thought we were nuts, (that) there was some mistake," Katz said during a speech Friday at the Baron Investment Conference in New York.
There was a catch with the new season pass offering: To get the discount, skiers had to buy the pass before the season started.
Anyone who wanted to ski at any of Vail's 15 or so locations across the world but did not get a pass would have to pay a day rate considerably higher than a normal day lift pass.
"The company was shifting risk from us to our guests. The amazing thing is it still exists," Katz said. "This has allowed us to create one of the ultimate loyalty programs in travel — I actually think in all consumer products."
Today the season pass program has soared, with 650,000 holders across all 50 states and in a multitude of countries. Season pass revenue went from essentially nothing to 43 percent of total revenue.
But it's about more than money: Vail has been able to optimize the information it gets when people apply for the pass to offer more appropriate programs for holders.
"Our ability to offer each person exactly the right product at the right price with the right message, that's what's driven our company," Katz said.