December 22, 2003

Ski Areas

Posted by shonk at 03:41 AM in Economics | TrackBack

Although I’ve been skiing the last couple of days, I have devoted a couple of moments to serious thought. Specifically, I’ve been thinking about the economics of a ski area and whether the ski area model is a good one or not. So far as I understand it, at least in Colorado, most of the ski areas are actually on national forest land leased from the National Park Service. For example, Breckenridge, the area I’ve been skiing at, is in the Arapaho National Forest and is run by Vail Resorts, which also runs Vail, Beaver Creek and Keystone.

Now, what’s interesting to me about the way in which ski areas are operated is not so much the leasing aspect, but rather the way in which ski areas make money. The most obvious way is by selling lift tickets. Now, what’s interesting about a lift ticket is that it is precisely what the name would imply: a ticket which allows one to use the chairlifts on the mountain. What isn’t so obvious is that you are not required to have a lift ticket in order to use the mountain; in fact, you will often see snowshoers climbing up the mountain, presumably without a lift ticket. If one had the desire (and stamina), one could even ski the mountain without buying a lift ticket, so long as one walked back to the top instead of riding the lift. In other words, the ski area does not make money by claiming ownership of a particular piece of land and then charging people to use that land (remember, the ski area does not, technically speaking, even own the land), but rather by charging people for the privilege of using the value they have added to the land (in the form of ski lifts). Hence, in a sense, the ski area is a departure from the landowner/renter relationship that many on the left (along with the Georgists) find fault with.

Okay, so that’s not exactly earth-shaking, nor is it very well-researched. But I thought it was an interesting observation, another example from the multitude of ways in which organizations can be structured and land-use relationships can be realized.