Daily Rate vs Season Pass pricing

Hey,

Your doubt is logically correct, and you actually spotted something that sounds weird: if the average visits are 10 a year, why are customers spending 1200$ for unlimited visits rather than just 800$ (i.e., 10 times the $80 single entry ticket)?

However, the reality is that it is not uncommon in this type of businesses to see these situations. People often overestimate how often they will use a season pass. Let's use these assumptions: 

• A few season ticket holders might do only 1-2 visits a year (e.g., they move to another country, they get hurt early in the season, they get too busy with work). Let's say 15-20%
• A few others might get close to the 8 "threshold" (say 6-7 visits): when you buy the season pass, you definitely expect you'll ski much more than you actually can (even without injuries or work issues). Let's say 40-45%
• Lastly, a few others will get their full worth of 15-20 visits. Let's say roughly the top 40%

If you compute the numbers above, you'll see that (0.18 × 1.5) + (0.42 × 6.5) + (0.40 × 17.5) = 10.0 average visits.

We can discuss of whether my percentage assumptions are correct or not: I picked on purpose some numbers that would yield a 10.0 average to be consistent with the case (and I agree with you: the true average might be slightly higher than 10). However, you can see how we are not too far from a real-case scenario!

Hope this helps!

Tom

Hi, good catch — and this is actually exactly the kind of thing interviewers like you to question.

Based only on those numbers, yes — if:

• daily ticket = 80
• average customer does 10 visits

then buying day passes costs 800, which is less than a 1200 season pass.

So on the face of it, the season pass doesn’t look attractive.

But in estimation / case questions, that usually means you should challenge the assumptions or look for what may be missing.

For example:

• maybe season pass users ski much more than 10 times (10 could be average across all customers, not pass holders)
• maybe the pass includes other benefits (priority access, discounts, flexibility, etc.)
• maybe it’s designed to lock in customers upfront, not just optimize per-visit economics
• maybe heavy users subsidize lighter users

Also, sometimes the point of the question is precisely to see whether you spot something inconsistent rather than blindly compute.

So yes — your instinct is right. I would have raised the same question in a case. Often that’s exactly what good candidates do.

You are reading the math right. Season pass at 1200, average customer at 10 visits times 80, daily wins at 800.

But the case is not testing pure cost. The 10 visits is an average. Heavy users go 20 or 30 times and the pass is a clear win for them. Pricing is set for that segment, not the average.

There is also a behaviour shift. Once people buy the pass, they visit more often than they planned. The operator gets 1200 upfront which helps cash flow, and pass holders spend more on food, drinks, and parking. The 1200 also anchors the daily price and makes 80 feel reasonable.

So on paper daily is cheaper for the average customer. But the pass is priced for heavy users, locks in cash flow, drives more visits, and lifts ancillary revenue. That is why operators offer both.

Never just compare unit prices in pricing cases. Think about who buys what, why they buy, and what behaviour the price is driving.

Good luck.

hey!

I would argue: If the season pass costs 1200 and the average customer only visits 10 times, then the effective cost per visit is 120. A daily ticket costs 80, so 10 daily tickets = 800, which is cheaper.

So yes, for someone who visits only 10 times, the daily pass makes more financial sense. A season pass only becomes worthwhile if a customer visits more than 15 times (because 1200 ÷ 80 = 15).

Best, Alessa

Hi there,

You are right! At 10 visits, the daily rate ($800) beats the season pass ($1,200). Good catch.

The key formula to ask in any pricing case like this: what is the breakeven number of visits?

$1,200 ÷ $80 = 15 visits

Below 15 visits → daily rate wins for the customer.
Above 15 visits → season pass wins.

Since the average is only 10 visits, most customers are better off paying by the day. The firm's pricing question then becomes: why would anyone buy the season pass at all? That is where you explore other factors... convenience, no queue on the day, perceived value, loyalty. Or reprice the pass to be competitive closer to the breakeven point.

Good luck!