Airline baggage fees boost ski rental profits
February 3, 2012
Steamboat Springs — Michael Berry, president of the National Ski Areas Association, thanked a group of airline industry managers in Steamboat Springs this week for the baggage fees they began imposing on passengers several years ago.
"I know it's something you don't get kudos about often," Berry said. "But baggage fees have had significant positive impact on our business metric."
Berry made his remarks during the 13th annual Airline Summit hosted by Steamboat Ski and Resort Corp., which uses the occasion to entertain key employees from the airlines that fly direct to Steamboat during ski season. He betrayed a sense of humor in his remarks about airline baggage fees, but Berry wasn't kidding about the revenues the fees have indirectly routed to resort operators and independent ski shops.
Faced with the increasing cost of transporting skis and boots to and from a resort, many ski vacationers are opting to leave their personal boards at home and to ski on the latest, greatest, freshly tuned skis for their brief stay at a big mountain.
"The growth of (rentals of) high-end demos has been huge," Berry said. "We'll rent you the right ski for the right day, and not only that, we'll deliver it to your condominium. You'll never have to touch them except when you drag them out to the snow."
A high-end, or demo, ski rental can cost as much as $38 at the base of Steamboat Ski Area. Consumers willing to shop around can find lower prices, and in most cases, they can book their skis online and receive a discount for doing so.
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The airlines have relatively accommodating policies when it comes to ski equipment. United, for example, permits as many as two pairs of skis in a bag plus a boot bag to count as one piece of luggage as long as the combined weight does not exceed 50 pounds.
However, traveling skiers must pack bulky clothing along with the rest of what they need on vacation, and a third piece of luggage quickly can cost $100.
Rental skis delivered
Berry praised companies, including Black Tie Ski Rentals, of Steamboat Springs, that have found a new niche in the ski rental industry by delivering skis and boots to vacationers' accommodations, saving them the need to wait in line in a crowded ski shop.
Black Tie, celebrating its 10th anniversary and 13 owner-operated branches across North America, and other rental operations such as Christy Sports custom-fit their clients with the appropriate equipment for their skiing abilities and styles.
"We came up with the idea after country singer Alan Jackson requested an in-room fitting while visiting Steamboat in 2001," said Joe Sternberg, who co-founded Black Tie with Ian Prichard in a one-car garage in 2002.
Berry said skiers and snowboarders turn to high-end rentals for more than convenience. In addition to swapping the cost of flying skis and boots to a destination resort for the chance to ski on a new model, vacationers have the flexibility of swapping out skis mid-vacation. Few vacationers know in advance whether they'll ski groomers or deep powder in their narrow window of opportunity.
The contribution baggage fees make to the popularity of high-end demos goes beyond the simple rental fee, Berry said. Premium rentals are a cash cow for shops, he said.
"The ski (makers) don't like this, but it's changed everything for us, and it's a gift from the manufacturers," Berry said.
Ski rental companies purchase skis at about half of retail prices and take two years to pay for them in installments, he explained.
"We buy skis for $600 that retail for $1,200," Berry said. "By the time they're paid off after the second year, (they've generated an) income stream of $2,000, and it includes selling them to a local for the price we paid for them."
Of course, the ski shops spend heavily on keeping their rental fleets freshly tuned and waxed.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com