Markus Redl Discusses Dynamic Pricing In Ski Resorts
Dynamic pricing models have been common practice in the hotel and aviation industries for years, and in Switzerland, even in ski resorts. Despite various reservations, dynamic pricing will soon become established in the cable car industry in Austria as well. Cost trends alone require increased profitability, along with necessary investments in snow reliability and the further development of year-round operations. This is certainly not about profit distributions to owners, but rather about maintaining mountain infrastructure and being able to adapt to advancing climate change: a question of our national competitiveness in alpine tourism.
Dynamic pricing primarily serves to help businesses (and the industry as a whole) achieve more skier days and/or increase average revenue. Potential guests have different needs (e.g., regarding time flexibility) and are also price-sensitive depending on the booking situation. Structural overcapacities are expensive and inefficient; a modern product and pricing policy aims to optimize capacity utilization (within a day, a week, during and outside of holiday periods, and generally throughout the year). This generally means avoiding extreme peaks (overload) and maximizing traditionally low-occupancy periods.
1 Price differentiation has a tradition
Charging different prices for services (while maintaining consistent quality) has always been common practice among ski resorts: primarily person-based (e.g., children's, youth, and senior rates), but also time-based (e.g., off-peak and peak season rates, incentive offers on Saturdays/changeover days), all combined with volume-based price differentiation (from points-based to season tickets). The goals of price differentiation are usually a combination of: increasing profitability, better capacity utilization, customer retention—in short, positioning oneself well in the competition and securing market share. This applies both among ski resorts and to other providers in the tourism and leisure industry.
Price increases at ski resorts have often been made internally based on cost trends, rounded to practical prices for cash payments. Especially in times of high inflation, however, this quickly leads to potential guests dropping out of the market due to a lack of disposable income for vacations and leisure activities. This is where dynamic pricing comes into play for ski resorts, because continuous, temporal price differentiation through early bird discounts creates multiple price points – almost all of them lower than previous prices.
The daily base rate is recalculated and published once a day for each scheduled operating day of the winter season; the last time is the day before, not on the actual day of booking. Both historical demand (e.g., the first Saturday of the semester break) and current demand—shortly before the booked day or period, including the weather forecast—are incorporated into the algorithm. In other words, the price is calculated from the outside in, in exactly the opposite way to what was previously the case. Different willingness to pay results in different prices.
The prices for multi-day tickets or the child and youth fare are derived from the daily base rate. The algorithm is typically given both a lower and an upper price limit. Neither is set in stone, as competitors' pricing policies and the availability (e.g., possible partial operation due to a lack of snow) naturally play a role. In any case, an auction-like price increase for the last available tickets does not occur.
2 Basic principle of dynamic pricing: earlier means cheaper
Snow conditions and weather play such a dominant role in purchasing decisions that, unlike other industries, prices at ski resorts with dynamic pricing do not fluctuate. Quite the opposite: the central customer promise is that the price will either stay the same or increase (more or less significantly). Experience shows that even substantial price reductions do not stimulate demand when there is a lack of snow or bad weather. Conversely, it is strategically very important to convey to potential guests that "the earlier you book, the cheaper it is." This sharing of the snow and weather risk with guests is a key consideration.
Should there be a significant restriction on lift or ski operations, the general terms and conditions apply anyway – the amounts paid are usually refunded or credited. Snow and weather risks refer to other scenarios: For example, the snow may turn slushy earlier than usual, some slopes may be impassable due to a lack of snow, or there may not be bright blue skies and sunshine, or perhaps even snow or rain. Another thing that is becoming more common due to climate change are days with strong winds, on which many lifts cannot operate, at least temporarily – a particular problem for feeder lifts or small ski areas with only a few facilities.
Most guests only engage in snow sports on a few days a year. According to MANOVA, spending in Austria for adults in 2022/2023 averaged €263.80 per ski day (lift ticket share: 17 percent), so the need for optimal conditions is understandable. However, ski resorts must strive to maximize sales not only during periods of particularly high demand, such as parts of the Christmas holidays and periods of good weather with excellent piste conditions, but also during as many operating days as possible.
To optimize capacity occupancy, it is crucial to have as high a proportion of guests booking in advance as possible. Once guests have decided on a specific day or period, purchased a lift ticket (possibly including accommodation, travel and departure), taken vacation, or arranged childcare, the likelihood of reversing this decision if conditions are less than (completely) optimal is much lower than if they wait. When purchasing multi-day tickets, some guests no longer anticipate taking a break for a day.
In addition, ski resorts only have a certain capacity due to the comings and goings of guests throughout the day. Parking spaces are often the limiting resource, and overcrowding can also lead to excessive wait times at the lift ticket office, lifts, equipment rentals, and mountain restaurants. Imposing a numerical cap (allocation system) and introducing time slots (time-based products) can remedy this, but also require a high proportion of guests who are "pre-committed," as Vail Resorts puts it.
3 Online ticketing is central
In practice, visitor flow management at ski resorts is difficult to imagine without digitalization. An actively managed product and pricing policy (instead of "first come, first served") requires a high priority for online ticketing. This brings us full circle with dynamic pricing, a demand-based early bird discount (in terms of amount). This makes it possible to communicate attractive starting prices and to present price differences throughout the rest of the season to potential guests at any time as potential savings.
Based on our positive experience in managing the pandemic, ecoplus Alpin GmbH has introduced "flexible pricing" at four locations in Lower Austria starting with the 2022/2023 winter season (see Dynamic Pricing for Ski Resorts | Tirol Tourismus Research): Annaberger Lifte, Erlebnisalm Mönichkirchen, Hochkar Bergbahnen, and Ötscherlifte. This involved channel-specific pricing differentiation: The online price became the standard price, which is always around 15 percent cheaper than the on-site price at ticket machines or lift ticket offices. A massive early bird discount results in days when adult day tickets are available starting at just €33.90 (since December 2024, prices have been rounded up to 90 cents).
The four ski resorts mentioned all have a relatively high proportion of day visitors, have already implemented parking management, and are direct competitors in the Schröcksnadel Group in Upper Austria, who also have a dynamic pricing system. The online share of sales achieved is over 60 percent, which, according to implementation partner Pricenow, is the European leader. The Hochkar Bergbahnen is the leader this winter season with around 66 percent, even higher during holiday periods. The ski resort's entire logistics, especially the scheduling of shuttle buses, is based on data.
Furthermore, more than 34 percent of all tickets are loaded onto existing key cards, allowing the lifts to be used without prior pickup. Since November 2024 alone, more than 10,000 customers have been newly registered and can be invited back in compliance with GDPR regulations. Around 55 percent of bookings are made at least one day in advance, compared to just 37 percent last winter. This reduces the burden on on-site ticket offices and reduces peak bookings.
4 Price sensitivity for short-term bookings is rather low
With dynamic pricing as described, discounts are more than offset by higher prices for short-term bookings. Malasevska et al. found evidence that dynamic pricing can generate higher demand and increase revenue by 0.5 to 7.5 percent.
To use the Hochkar Bergbahnen as an example: This year, around 20,000 adult day tickets have already been sold for under €40, 47 percent of which were under €55. Static prices for major competitors, both easily accessible from Vienna, are €54 and €62.50, respectively.
However, price sensitivity is rather low for short-term bookings (especially on the same day), which is also demonstrated by the fact that a relevant group of guests foregoes the 15 percent savings offered by online booking, even when our staff offers on-site support.
The development of dynamic pricing for 6-day ski passes during the semester break, from booking in early November (by €241.50) to early February (by €346), can be criticized solely as a price increase of 43 percent, as in the ORF Bild 1 report of February 13, 2025 (article "Ski lift ticket prices are only getting more expensive"), obscures the context: namely, that the final price roughly corresponds to the previous fixed-price practices before the introduction of dynamic pricing, is still competitive, and thus the criticized price difference actually represents the potential savings from the customer's perspective. The Lower Austrian Chamber of Labor, on the other hand, was able to assess the situation with its advantages and disadvantages, also mentioning the cancellation option with the worry-free package for €5 per day.
5 Accusation of lack of transparency
The accusation of lack of transparency can affect various levels in dynamic pricing: on the one hand, how a price is determined and composed, and on the other hand, how high a price is or will be in relation to other prices.
What's striking is that dynamic pricing is usually replacing huge product catalogs (resulting from the combination of various price differentiations). Most discounts and benefits are obsolete (with the frequent exception of children's and youth rates), and discounts granted only upon request at the lift ticket office, for example, due to membership in motoring clubs, are no longer available.
The factors relevant to dynamic pricing are explained by the ski resorts; however, the self-learning algorithm is not rigid by definition and is intended, as usual, to suggest increasingly better daily base rates within a defined price range with the help of artificial intelligence (see "Artificial Intelligence and Dynamic Pricing: A Systematic Literature Review"). A fundamental rejection of the use of AI in pricing is likely intended to serve resentment; in any case, a kind of "loss of control" does not occur.
Consumer protection criticizes, among other things, that the maximum prices are not known, meaning guests cannot calculate the potential savings from booking earlier. However, as already explained, a maximum price stored in the pricing system can change. It is therefore tricky to state such planned maximum prices; this is by no means standard practice in Switzerland either. Of course, attractive starting prices should be highlighted in communication, and not just a potential maximum price should be considered.
The various prices are public and can be accessed online at any time. It's only a matter of time before information on price trends – as with other products and services – becomes comparable through so-called price crawlers, including recommendations and forecasts for potential guests. For the ski resorts themselves, as well as for tourism statistics, the actual revenues over a longer period or the entire winter season, or at most the cumulative number of visits and average revenues, are relevant.
6 Outlook
Dynamic pricing will become standard in ski resorts in Austria over the next five years due to its strategic and economic advantages. The cable car industry is well-connected, not least through numerous ticket associations and banks as financing partners (and often owners). Paradoxically, some very high-earning top destinations could remain at static prices, although these price increases (especially when guests buy at short notice) would certainly be possible and – also in the context of the industry as a whole – sensible.
The current stigma surrounding dynamic pricing and fears of customer backlash will all diminish as it becomes more widespread. Currently, only a small portion of ski resorts in Austria operate dynamic pricing models. In the future, the debate will likely be more about "how," rather than "if." Per Kristian Alnes wrote his dissertation on precisely this topic: He shows, for example, that the extent of price differences between different partial periods influences guests' perceptions of fairness and impacts behavioral intentions. However, the framing of price differences can influence these effects. We recommend Angelika Erlbacher's master's thesis, "DYNAMIC PRICING: Fairness Perception of Dynamic Ski Pass Prices in the Skicircus Saalbach Hinterglemm Leogang Fieberbrunn."
Ultimately, what matters is the guests' subjective perception of the value for money—and not whether a rule-based early bird discount is "only" granted, a demand-based algorithm determines the price, or availability (e.g., slope opening, snow quality) is also directly factored in. However, with customer data, ski resorts can, for the first time, operate quality and customer loyalty management on a large scale, sell additional services in their own area (e.g., VIP parking, fast lane), encourage repeat visits with discount codes, inform winter guests about summer offers, and vice versa; but above all, they can do a great deal to increase customer satisfaction through safety and comfort.
It will also be interesting to see whether ski resorts will still need ticket booths or access systems on a large scale in the medium term. Certainly not for communicating with guests for the purposes of risk management and visitor flow control (e.g., notification in the event of partial closures due to storms).
In the future, dynamic pricing will encompass the entire product catalog, including various season tickets. The time of purchase will be crucial, perhaps differentiated by so-called blackout dates. This will bring liquidity into the company early and is preferable to price dumping through the sale of heavily discounted contingents through distribution partners such as supermarkets or gas stations.
To date, no marketplace for lift tickets has been established. Platforms already exist for other services such as equipment rental with ALPINRESORTS.com, snow sports schools with CheckYeti, or information on offers and weather with bergfex. Strategically, it is of utmost importance that the industry engages with any intermediary for the core service of the cable cars; POOL-ALPIN has already done the necessary preparatory work. Dynamic packaging, i.e., allowing other services such as accommodation to be purchased in addition to the lift ticket, is generally desirable, but it increases complexity considerably.
