Yo,
I hope everyone had a great weekend!
Not quite going to be talking about adventure outfitters this week, but we are still sticking to extreme sports… kinda.
If you’re into winter sports like skiing and snowboarding, or at least have friends who are, you’ve probably heard of either the Ikon or Epic pass.
Basically, everyone who lives out west, has a second home out west, or even just visits Colorado once on spring break will buy one of these two passes beforehand starting in the summer up until the last minute. You can buy a single-day pass, a multi-day pass, or a season-long pass.
The key being that these average out to be cheaper than the lift tickets sold at the resort if used enough, and they allow more flexibility (i.e. you aren’t bound to specific days).
So, if you have even a little bit of foresight, or just know you’ll be on the slopes a lot, they’d definitely be worth it. Trust me, I learned the hard way.
But why would the resorts be on board with this when they could just sell the lift tickets themselves?
Well, these two passes have driven up demand, making it easier for casuals to visit, so the mountains are making more money, it helps them forecast and staff up for the upcoming season, and maybe most importantly, all the other mountains are doing it.
In other words, if I have a choice between buying a season pass for one mountain or a pass that includes several mountains, I’m choosing the latter. Most resorts realized this, didn’t want to lose customers, and just joined the cult.
Together, Epic and Ikon passes cover most of the big resorts in the United States.
Coincidentally, or maybe not so coincidentally the companies who own the Ikon and Epic passes also own many of the mountain resorts on their list. For example, Vail Resorts Management Company the company that started the Epic pass, actually own Vail, Beaver Creek, Keystone, Park City and several other resorts.
So, it’s not so much convincing mountain owners to participate as it is just creating a bundled discount for the resorts that are already in their holdings and rebranding it as something else.
Anyways, it’s a huge business. Epic and Ikon pass alone bring in around $59.5 million a year each.
And before you think, “oh, let me just go buy a mountain, set up some lifts, and start a resort”, you’re late to the party, just about anything bigger than a sledding hill has been bought by people thinking that same thing.
When I heard about this, I was interested in some of the other industries that fit this mold.
Fragmented industries that could benefit from a bulk or bundled discount and a little consolidation. Industries with idle capacity, excess inventory, or vacancy that could be marketed.
And it turns out there were several of them.
ClassPass: Most gyms, salons, and fitness studios are independently owned with unique classes and instructors. ClassPass leveraged a similar business strategy as Ikon and Epic pass to find empty spots in fitness classes, aggregate these options, and market them to consumers under one membership. ClassPass was recently acquired by Mindbody for over a billion dollars.
Airbnb/Vrbo: Most homes are independently owned. Airbnb and Vrbo aggregate and consolidate vacancies and market them as “fun vacation stays”. And we obviously all know how big these companies are.
It’s clear that the Ikon and Epic pass system is mimicked and successful in other industries as well. As we zoom out, we can see that this is a well established strategy that entire companies are built on. There is a landscape for this.
But who cares? Those industries are developed and impenetrable. Where is the opportunity still available?
Not quite going to be talking about adventure outfitters this week, but we are still sticking to extreme sports… kinda.
Ikon And Epic Passes
If you’re into winter sports like skiing and snowboarding, or at least have friends who are, you’ve probably heard of either the Ikon or Epic pass.
Basically, everyone who lives out west, has a second home out west, or even just visits Colorado once on spring break will buy one of these two passes beforehand starting in the summer up until the last minute. You can buy a single-day pass, a multi-day pass, or a season-long pass.
The key being that these average out to be cheaper than the lift tickets sold at the resort if used enough, and they allow more flexibility (i.e. you aren’t bound to specific days).
So, if you have even a little bit of foresight, or just know you’ll be on the slopes a lot, they’d definitely be worth it. Trust me, I learned the hard way.
But why would the resorts be on board with this when they could just sell the lift tickets themselves?
Well, these two passes have driven up demand, making it easier for casuals to visit, so the mountains are making more money, it helps them forecast and staff up for the upcoming season, and maybe most importantly, all the other mountains are doing it.
In other words, if I have a choice between buying a season pass for one mountain or a pass that includes several mountains, I’m choosing the latter. Most resorts realized this, didn’t want to lose customers, and just joined the cult.
Together, Epic and Ikon passes cover most of the big resorts in the United States.
Coincidentally, or maybe not so coincidentally the companies who own the Ikon and Epic passes also own many of the mountain resorts on their list. For example, Vail Resorts Management Company the company that started the Epic pass, actually own Vail, Beaver Creek, Keystone, Park City and several other resorts.
So, it’s not so much convincing mountain owners to participate as it is just creating a bundled discount for the resorts that are already in their holdings and rebranding it as something else.
Anyways, it’s a huge business. Epic and Ikon pass alone bring in around $59.5 million a year each.
And before you think, “oh, let me just go buy a mountain, set up some lifts, and start a resort”, you’re late to the party, just about anything bigger than a sledding hill has been bought by people thinking that same thing.
Other Industries Doing The Same Thing
When I heard about this, I was interested in some of the other industries that fit this mold.
Fragmented industries that could benefit from a bulk or bundled discount and a little consolidation. Industries with idle capacity, excess inventory, or vacancy that could be marketed.
And it turns out there were several of them.
ClassPass: Most gyms, salons, and fitness studios are independently owned with unique classes and instructors. ClassPass leveraged a similar business strategy as Ikon and Epic pass to find empty spots in fitness classes, aggregate these options, and market them to consumers under one membership. ClassPass was recently acquired by Mindbody for over a billion dollars.
Airbnb/Vrbo: Most homes are independently owned. Airbnb and Vrbo aggregate and consolidate vacancies and market them as “fun vacation stays”. And we obviously all know how big these companies are.
It’s clear that the Ikon and Epic pass system is mimicked and successful in other industries as well. As we zoom out, we can see that this is a well established strategy that entire companies are built on. There is a landscape for this.
But who cares? Those industries are developed and impenetrable. Where is the opportunity still available?
I’ll Tell You Where
Golf.
Golf has always been the dad’s sport. You hate it as a kid cause it’s boring, love to play it as an excuse to drink beers in your 20s, use it as a way to take a nap on Sundays in your 30s, and then actually begin to enjoy it for what it is after that.
That is, until recently. Golf had been steadily losing viewership since Tiger’s glory days, up until the past two years. Full Swing increased fandom and broadened golf’s audience (similarly to how Drive to Survive did for F1), and LIV brought controversy that the sport hadn’t seen in decades. Not to mention the merger that happened last week stoking the fire even more.
Now everyone has an opinion, a favorite golfer, and cares a little bit more. Golf has become more top of mind.
Which may have impacted why I narrowed in on it as a potential opportunity.
Golf courses are often independently owned, operate very similarly to mountain resorts, and can be found literally anywhere in the country. There are hundreds of times more golf courses than there are mountain resorts, yet when you look into something like an Ikon or Epic pass that exists for golf there’s next to nothing.
There’s no “pass” I can buy with a list of participating courses that I can choose from on a vacation and book a tee time.
The only company I could find that did anything close to this was Troon. It was hard for me to even figure out what it is that this company did by looking at their website, but it looks like they are a course management company who owns, operates, and handles booking for some of these resorts.
They recently received over $10 milliion of investment from TPG and Rory McIlroy.
But even with this market leading success, I don’t think Troon is keying in on what has made Ikon/Epic, ClassPass, and Airbnb successful. I actually think that it could be a bad investment, and here’s why:
- Jack of all trades is a master of none: Troon quickly expanded into fitness, spas, tennis, and sporting lessons for kids before mastering what it set out to do, which was golf. They failed to get significant traction through there golf bookings platforms, so they pivoted to other industries instead of doubling down. Now it just feels like they’re “all things country club.” Like I said when I visited their website, I couldn’t tell what it was exactly that they did.
- Bad Traffic: It seems to me that they are brute forcing traffic. Troon is only getting 21k visitors to their website a month….in peak golf season. To put that into comparison, ClassPass gets 760k visitors per month and Epic Pass gets 198k visitors per month (in the summer). For something that quite literally has 100x the market as Epic, to get 10% of the traffic doesn’t feel great. Don’t get me wrong 21k is good, but not “I just raised 8 figures from TPG and Rory McIlroy good”.
- They’re Just Affiliate Marketers? Like I mentioned earlier, I failed to find a membership/pass that would let me book a tee time with a participating course on a given day. Where I could hypothetically golf in Georgia one day and California the next, using this one pass. What Troon seems to be doing is simply affiliate marketing. They sell memberships to individual golf clubs at a discounted price, but they don’t bundle or aggregate anything. They increase sales and fill empty tee times for courses, and as a result take a cut of the booking. Again, this is great, but not “I just raised 8 figures from TPG and Rory McIlroy great.”
- Not Enough Courses: This one kinda speaks for itself. I don’t feel like they have a big enough course base to make purchasing their “membership” worth it. No big-name courses and only offered in select states. Want to golf right next to their HQ in Scottsdale? Perfect. Want to golf at some of the great courses in northern Michigan? SOL.
Here’s What Would Work Better
I think that there’s an opportunity to copy what the Ikon and Epic pass have done with winter sports, to a tee. Not kinda copy it, but exactly. Instead of diversifying into all thing’s country club, stick to golf.
Start local. Everyone has heard of bootstrapping, so find some local courses and build from there. Make the conversation about what you can do for them. Something like “If I could bring you ___ customers for your ___ empty tee times, what would that be worth?”
From there, you expand, but only market it to people within the geographic you are serving. Who knows, you could even make a tiered system where the worst courses are dirt cheap, and the super nice ones have a more expensive membership.
The reason Ikon and Epic pass work so well, is their participating resorts are world class; they’re the best in the United States. So, if you want to rise to that level, you’re going to have to get some world class courses. Whistling Straights, The Country Club, etc.
And worst case, I was completely wrong about Troon, they are doing this, and you are now second fiddle. Second fiddle in a huge market. I’d still take being the Vrbo to Airbnb, the Lyft to Uber, or the Apple Music to Spotify.
You’ll be looking like Troy on the green. Bet on it.
Off The Bench
Summer’s already under way, but it’s never too late to start working on that summer bod. Here’s a dirty little secret, I know someone that can help. Odell has helped dozens of people get in shape and get off the bench! Off The Bench Fitness gives you daily workouts, accountability, and nutrition that transforms your mind and body. Whether it’s for golf or skiing, invest in yourself and start today.
Final Thoughts
The main point is golf courses are going to have open slots, and I’m sure they’d rather have a non-member scratch golfer pay to play than leave it open. And it would be a scratch golfer, because only those serious about golf would buy an annual membership. The system would weed out the hillbillies automatically.
As for the golfers, it’s all about access and convenience. That’s exactly what ClassPass, Ikon/Epic, and even the outfitters I mentioned last WEEK (LINK) realized. If you bring them access to several great courses, at rates lower than club membership fees, and flexibility. Well, that’s kinda an offer you can’t refuse.
‘Til Friday.
from, matt
