Interview: How Vail Resorts CEO Manages Tech Innovation in Nature

Editor’s Note: This interview is part of Skift’s CEO interview series. This particular series is with hospitality CEOs talking about the Future of the Guest Experience and the evolving expectations and demands of hotel guests. Check out all the interviews as they come out here. Also, enjoy the previous series on the Future of Travel Booking, with online travel CEOs.

Ski resorts are swinging into their busiest season of the year with loyal season pass holders and first-time amateur skiers preparing for one or several trips to the mountains. No brand name is as well known as Vail when it comes to discussing lofty winter travel plans, putting the resort and hospitality company in a unique position to lead the industry in innovation and experience.

Vail Resorts has been quietly confronting major challenges in recent years from determining millennials’ interest in ski as a sport to determining the role of technology during their guests’ largely outdoor stays. Vail CEO Rob Katz has lead the group since February 2006, introducing its EpicMix ski app, appealing to a growing “Red Bull generation,” and turning the season pass into its primary product.

Katz spoke with Skift recently about balancing guests’ tech and leisure demands, fostering loyalty, and attracting a younger customer base.

Skift: What are the biggest challenges that you’re facing in improving the guest experience?

Rob Katz: One of the unique pieces for us is how we integrate technology into the guest experience. We have a higher-end guest and our approach is to create this incredible guest experience that is on par with the best of the best in travel. We also provide an experience that is very nature-based. People are coming us to ski and recreate in the outdoors.

The two trends that we see and focus on is asking how we can provide an absolute luxury experience and, at the same time, have it be consistent with this kind of outdoor recreational experience. It needs to be authentic. One of the challenges we face is figuring what we can do, for instance, inside the hotel room to drive loyalty and increase satisfaction while also connecting guests to the out doors. The other is technology, which has provided numerous new options and opportunities to impact the guest experience.

The question for us is how create the guest experience that’s true to our high-end nature and works within an outdoor recreational experience. The other piece for us is that we’re seeing a huge influx in international tourism from a variety of different countries. How do we provide things that are unique and specifically tailored for them and, at the same time, maintain our authenticity?

Skift: What role does technology play in improving the guest experience? Is consumer-facing or back-end technology more important or effective than the other?

Katz: They are both very important. One of the things for us is that we’re operating a comprehensive resort experience. In addition to operating a hotel, we operate a ski mountain, ski school, numerous restaurants, rental stores, and a transportation business that takes people from the airport to the mountain. The back-end technology piece is knowing who the guest is, what their background with you is, and what their needs are. We are spending a tremendous amount of money to bring together all of those database.

We’ve developed our own kind of Google search experience so if you go up to a lift ticket window, we know who you are and can provide the right service based on that. We’ve seen that can be really successful at improving the guest experience and reducing the amount of a time a guest might stand at a counter. If the guest is renting skis then they walk in and we know they rented skis three years ago at another one of our resorts and they don’t have to fill out paperwork.

All of that is the back-end because the guest doesn’t see it, but it dramatically improves the experience that we can provide the guest. On the front end, one of the big efforts that we’ve put forward is with an app called EpicMix. The question that we wrestled with for a long time was how do you introduce technology onto a mountain experience, but, at the same time, not interfere with somebody’s experience in nature.

About five years ago we came up with a concept that put a RFID chip in every single ski pass. As the guest is skiing around the mountain, we can provide them information about their ski day, like how many vertical feet they’ve skied, that allows them to track and compete with one another. It’s a Nike Plus-type experience. One of the bigger innovations that we’ve done as a company is around photos. Most resorts had professional photographers and guests could go online or in store where the resort typically charged a fair amount of money for each photo. I thin that’s a somewhat antiquated process.

We decided that we would use our mountain photographers to take pictures of our guests then scan the RFID chip in the ski pass and upload the photos directly to their online account. Instead of charging for the photo, we gave it to the guests for free so they could share it on Twitter or Facebook. Our view on photos and this kind of customer-facing technology is that, if a guest wants to have a photo of themselves at our resort and they want to put that on Facebook then that’s the best advertising we could ever get. We really shouldn’t be charging the guests for that; we should encourage guests to do that. When we removed the fees, we saw an explosion in the number of photos that were being posted about our resort by our guests on Facebook and Twitter.

Skift: Are you finding that guests gravitate towards experiences in nature without technology or do they want the technology and not mind if it interferes with nature?

Katz: When we launched EpicMix, people asked why guests wouldn’t just use the GPS on their phone to track their ski experience. Our experience is that the vast majority of our guests do not to be fiddling with their phone tracking the experience while in the middle of it. We put the RFID chip in the ski pass so guests don’t have to pull our their phone or use an app. It’s all happening seamlessly in the background.

I think that’s also true in our hotels. People are interested in technology but they’re not coming to us for technology and that’s important for us to remember. They’re coming to us for leisure experience.

Skift: What changes are you expecting in the kinds of guests coming to Vail Resorts and how will you cater to them?

Katz: There have been concerns for many years in our industry around what happens as the baby boomers age and how the kids of baby boomers will pick up the sport. It’s something that golf and tennis is struggling with right now. The benefit that we had was that the industry as whole decided to open up parts of the mountain to more creative opportunities. That started somewhat with snowboarding in the 80s, but then you look at freestyle skiing and terrain parks and new equipment and kids have become really excited and enthusiastic about skiing. It is kind of free expression, which is different than golf and tennis. You look at what we call the “Red Bull” generation watching sports like the X Games and all that energy is really directed towards ski resorts in the winter.

The way that affects our business is that when families are making vacation decisions, Mom and Dad love the mountain as it’s always been and kids wants to come to be Shaun White and have that kind of experience. That whole genre becomes an addition attraction so we can maintain our connection to the whole family.

Skift: How do resorts like Vail align themselves with the “Red Bull generation”?

Katz: What we do is create areas within the mountain that are tailored to freestyle skiing, snowboarding, and younger demographic. At the same time, most of the mountain is available for traditional skiing. Kids have much more autonomy than they have on most other vacations. The family might separate during the day so it provides a kind of unique vacation experience. We think it’s why our guests are so passionate about this kind of vacation.

Skift: Has hiring changed at all in the last few years to meet changes in guest expectations or demands?

Katz: We spend a fair amount of time and resources on improving our recruitment efforts, which includes assessing the best place for us to find employees and the characteristics that make for good guest service employees. There are real challenges with that right now.
You can use technology and more sophisticated tools to attract employees. In almost the same way that we use marketing and analytics and customer relationship management efforts to attract guests, we’re now using those same things to attract employees. The market for guests has obviously gotten incredibly competitive, but the market for employees has also become very competitive. We have to be as good at marketing to employees as we are to our guests.

Skift: What’s your perspective on the increase in hotel fees across the industry? How does that impact the resort business?

Katz: As someone who has traveled quite a bit myself, I think the question always comes down to value. Somebody might charge you a fee and you may feel like that’s a great value. I’m not talking about being charged left and right; I’m talking about a set fee. The approach we take is asking how many things we can bundle into the fee to make sure that people feel like it’s fixed and they’re getting a good deal when they do it.

You hear two messages from guests. One is that they want choices and options. The other is that they want us to make things simple for them. They don’t want extra charges on top of whatever they’ve agreed to when they come to visit us. There are certain properties where we do absolutely have hotel fees and resort charges and we are very clear about what’s included in this. We’re not getting negative feedback from our guests about that. We have other hotels where we don’t charge, which may have a more limited service that’s included in the room rate. Because we have a variety of properties at different price points in different locations, we really listen to guests. If we’re receiving feedback that this isn’t something they want then we just take it out. We can’t keep a resort charge or daily fee is your guest is tell us that they don’t want it.

Skift: Is there anything else unique at Vail that’s significantly impacting the guest experience?

Katz: One of the unique things that we do here, it’s pretty unique in travel, is our season pass. Almost 40% of our lift ticket revenue comes from people who are buying a season pass. The travel industry kind of created loyalty programs so every time a guest went to a property, they would build points. Then every time the company, whether it was an airline or hotel company, added new properties or services, the new property would get these loyalty members.

If Marriott bought a new property in Bali then everybody with Marriott Points can use points at the property and it does well. Adding that property in Bali also makes the loyalty program look more robust and attractive. Our company has kind of done the same thing where we have our own loyalty program with a focus on our season pass. We’ve said, “Look, if you buy all of your skiing from us in advance then we’ll give you a ridiculously great rate.”

This was the development of the Epic Pass about six years ago, for $700, with which guests can ski all of our resorts all season long with no restrictions or blackout dates. People thought we were crazy, but the reason we did it, and it’s really panned out, is because people feel a level of engagement and loyalty to the company. Also, every time we buy a new ski resort, all of our season pass holders, of which we have about 400,000, can go and ski that resort. It really energizes any resort we buy.

We feel like we have kind unique twist on guest loyalty, and advanced booking. Because we sell our passes anywhere from two to nine months ahead of the season, we’re locking in that guest’s trip in revenue. The product has created the greatest amount of guest enthusiasm and loyalty that we have at the company.