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Ed. Note: It’s important for leaders at all resorts, from department heads on up, to have a basic sense of how to analyze the performance of their area of responsibility. A great way to track performance is via key performance indicators, as the following article, adapted from our sister publication Adventure Park Insider, describes.

No one needs an MBA to use KPIs, and in fact, it’s valuable for leaders outside of the finance department to have the means to track performance. Managers are best positioned to understand how their areas of responsibility function, and KPIs can help them evaluate ways to improve performance and wring the greatest value from their budgets. Managers who stand in the boots on the ground and also know how to massage the numbers are invaluable to an operation.

Winter resorts have been on a roll these past few years, and visits have reached record levels. However, successful operations still require careful management and monitoring of a variety of key performance indicators (KPIs)—quantifiable measures that show how successful an organization is in meeting performance objectives. 

KPIs provide valuable insights into efficient operations. Resort leaders and managers who effectively measure and analyze KPIs are better equipped to ensure business success, employee and guest satisfaction, and safety. Here’s a look at key KPIs for these areas of business. 

1. Business Success

Essential number one, business success, delves into revenue and expenses, of course. It also goes further, taking into consideration customer loyalty, the performance of each individual revenue center, and the cost of attracting new business.

Revenue Growth. Revenue growth serves as a vital KPI for any operator. While revenue can be a lead indicator, focus on earnings (revenue less expenses) to track the overall financial health of the resort. Monitoring earnings growth helps identify trends and assess the impact of marketing efforts, and can inform decisions regarding pricing, promotions, and investment in new facilities. By comparing revenue and earnings growth over time, operators can evaluate the effectiveness of their business strategies.

To achieve consistent revenue and earnings growth, resorts should adopt a multi-faceted approach: identify and capitalize on expansion opportunities; diversify revenue streams through expanding sales channels and adding premium services (i.e., private access or party areas; food options; merchandise packaging; expanded retail and rental offerings), and implementing pricing strategies that help to balance crowds between peak and off-peak times.

Average Transaction Value (ATV). The average transaction value is the total spending per guest or spending during a specific time period divided by the number of transactions. Increasing the ATV will help boost revenue. To achieve this, offer enticing add-ons and packages, enhance the overall guest experience, and adopt effective merchandising and pricing strategies.

More specifically, resorts can introduce premium experiences or upgrade options that provide added value to visitors. Carefully curate merchandise and offer high-quality products that align with your resort’s culture and guests, and offer diverse dining options that encourage guests to make additional purchases. Constantly reevaluate these options and adapt to customer wants and needs. Keep in mind that ATV will be affected negatively by offering discounts, but this can be countered by increasing volume.

Customer Acquisition Cost (CAC). In a watch store the other day, I witnessed a man get turned away because the staff said they did not “have the time” to install a new watch band. They offered for him to come back the next day, but he was unhappy about it and seemed very unlikely to return. I questioned how much the store must have spent to attract the customer, only to lose him completely.

Customer acquisition cost refers to the expenses incurred to attract new customers. Understanding different customer types (i.e., big kids vs. little kids) and their associated acquisition costs can help optimize marketing efforts and allocate resources more effectively. By identifying the most cost-efficient customer acquisition channels, such as digital advertising or partnerships with local tourism agencies, resorts can streamline their marketing strategies and maximize their return on investment.

To reduce CAC, analyze customer data and behavior so you can tailor marketing messages to specific customer segments and enhance the effectiveness of your acquisition efforts, whether that’s via search engine optimization, targeted online advertising and email, or social media campaigns. Additionally, nurturing partnerships with local businesses, tour operators, and hotels can lead to mutually beneficial promotions and referrals, lowering acquisition costs.

Customer Lifetime Value (CLTV). The customer lifetime value represents the total revenue generated by a customer over their entire relationship with the resort. It considers repeat visits, additional purchases, and referrals. To increase CLTV, cultivate customer loyalty through exceptional experiences, personalized marketing initiatives, and targeted loyalty programs. By enhancing customer satisfaction and engagement, resorts can extend the CLTV and drive long-term profitability.

2. Employee Retention

Staff satisfaction, training, and development can affect the employee retention/turnover rate. In general, the higher the employee turnover rate, the more it costs to train and develop new employees.

Employee Turnover Rate. High employee turnover can significantly reduce the efficiency and consistency of resort operations and customer service. Measure the employee turnover rate for both front-line staff and management positions to discover valuable insights into the resort’s work environment and employee satisfaction levels. 

Resorts should prioritize attracting and retaining talented individuals who are passionate about delivering exceptional guest experiences. To reduce turnover, offer competitive compensation packages, provide opportunities for career advancement, and foster a positive work environment. Regular feedback sessions, open communication channels, and recognition programs can contribute to increased employee satisfaction and loyalty.

Employee Satisfaction Index. It’s essential to assess employee satisfaction to understand the needs and concerns of your workforce. An employee satisfaction index can be measured through surveys, such as an internal 360 review, that cover various aspects including work-life balance, training opportunities, job satisfaction, and overall organizational support. By actively listening to feedback and addressing problems, resorts can boost employee morale, increase productivity, and foster a loyal and motivated workforce.

Training and Development. Resorts must invest in the training and development of employees to maintain high operational standards and guest satisfaction. This also boosts employees’ proficiency, confidence, and job satisfaction.

A comprehensive training program covers several aspects of operations, including guest service, safety protocols, emergency procedures, and technical skills. Regular training sessions should provide opportunities for career advancement and cross-training and enable employees to grow within the organization; that all helps improve retention rates.

After this investment is made, it’s important to track the effectiveness of training programs, assess employee performance, and provide ongoing development opportunities. Prioritizing training and development will ensure that employees are equipped with the necessary skills and knowledge to deliver exceptional experiences.

3. Safety

Employee and guest safety is always a top priority. While the resort environment inherently holds some risk, no one wants to create or tolerate unnecessary risks. To that end, incident rates for both employees and guests are important KPIs, as they indicate how well your resort is controlling risks.

Incident Rate. Measuring the incident rate for both employees (beyond statutory compliance) and guests provides insights into the effectiveness of safety protocols and training. A robust incident reporting and investigation system allows for the timely identification of potential safety hazards and the swift implementation of preventive measures.

It is critical to analyze incidents by severity, and to differentiate between incidents caused by visitor and employee behavior and those resulting from facility design flaws or equipment failures. Conduct comprehensive risk assessments to help identify trends and implement corrective actions. The aim is to continuously improve safety measures and minimize the occurrence of accidents.

Safety Training Compliance. To maintain high safety standards, regularly review and update safety procedures, conduct comprehensive training sessions, and foster a safety-conscious culture. Safety training frequency provides a measurable indicator of your commitment to safety.

Establish a safety training program for all employees and provide refresher courses periodically. Train all staff members—not just front-line personnel—to effectively manage guest behavior and provide clear instructions and safety guidelines. Recognize and reward employees who prioritize safety, as this helps create a culture where safety is ingrained in daily operations. Managers should actively engage with employees and encourage them to report any safety concerns and participate in safety initiatives. These actions contribute to a safer and more enjoyable experience for visitors. 

Run regular safety drills to ensure compliance with safety protocols. Drills and simulations help employees develop muscle memory for emergency situations and ensure they are well-prepared to handle any unexpected risks.

A final point regarding safety: investing in high-quality equipment can help keep incident rates to a minimum.

4. Guest Satisfaction

To measure guest satisfaction, talk to customers, ask their opinions, put yourself in the mix, and solicit reviews. 

Customer Feedback Response Rate. The customer feedback response rate provides insights into the resort’s attentiveness to guest concerns and suggestions—and into the intensity of the customers’ satisfaction with their experience. Analyze guest feedback trends to identify recurring issues and implement improvements that enhance the overall guest experience.

Use multiple channels for capturing customer opinions, such as suggestion boxes, online surveys, and real-time feedback systems. Targeted surveys can provide deeper insights into specific aspects of the guest experience. It’s wise for managers to mingle and interact with guests and promptly address any issues they raise. Immediate and appropriate action demonstrates a commitment to guest satisfaction and encourages guests to volunteer their perspectives. 

Online Review Ratings. Online review platforms and social media have become influential sources of information for potential guests. Monitor online review ratings and guest comments to help gauge guest satisfaction levels, identify areas of excellence, and address any negative feedback. Consistently strive for positive online reviews and ratings; these help build a strong reputation and attract new visitors.

Respond to both positive and negative reviews and comments in a professional and timely manner, and address any concerns. Take the time to acknowledge positive feedback, and proactively resolve issues mentioned in negative reviews and comments—that demonstrates a commitment to guest satisfaction and cultivates a positive online presence. 

5. Embracing KPIs

Efficient management of winter resorts requires a comprehensive understanding of KPIs across many aspects of operations, from parking to F&B to grooming. A focus on business success, employee retention, safety, and guest satisfaction allows resort leaders and managers to make data-driven decisions that optimize operations and ensure memorable guest experiences. Embrace these KPIs and they will contribute to long-term success and profitability. 

Mike Solimano, Killington Resort / Pico Mountain, Vt. 2023 SAMMY Leadership Award Honoree.SAMMY Guest Editor Says...

Metrics are more important than ever in the ski industry with the business being so capital intensive and the current pressure on margins. When setting up metrics, it’s important to make sure the numbers are comparable (e.g., F&B revenue vs. skier visits or F&B transactions). It’s also important to understand what flaws can exist in your numbers (for example, a large group function in the base lodge that has nothing to do with skier visits can skew the results of your KPIs).

It’s necessary, too, to evaluate KPIs within the wider scope of your resort. Consider the suggestion to diversify your dining to improve average transaction value (ATV): We manage almost all of our F&B locations in-house but have found that, for smaller locations (remote lodges, waffle huts, etc.), it can be beneficial to outsource. While this doesn’t contribute to our ATV, our typical rent is about 25 percent of the contractor’s revenue. In smaller locations, this could be comparable to or better than our margins when managed in-house, without the burden of hiring extra staff.  

KPIs are critical, but not everything can be measured in hard data. For example, when it comes to improving safety, it can be easy to overlook “near misses,” i.e., situations where we almost had a safety issue but were lucky enough not to. Having teams discuss “near misses” can be helpful in reducing real safety issues even though the almost-incidents may not show up in the data.

Similarly, when it comes to tracking employee satisfaction, we have scrapped the annual review process and moved to a 1:1 coaching model. We want our managers to spend time learning the needs and wants of their direct reports because we can’t improve work/life balance, for example, if we don’t know what that means to each person.

We do use internal employee surveys to help us objectively measure the performance of our managers and department cultures, though. Like most resorts, we’ve conducted these for years, but realized many of the departments were not learning from the feedback the surveys provided. So, we changed our process to better act on the survey data. Now, each department must create a plan to improve its scores and present the plan to companywide leadership at bi-weekly information meetings in the fall; managers’ bonuses are also impacted by their departments’ employee survey scores. 

I think it is key to try to take feedback constructively. Many times, I read feedback and say, “that is actually a good idea,” or “they are right, and we should change that.”

If we are open to feedback, listening to guests can also help us improve operations, which will ultimately improve guest satisfaction. I answer all the emails that I receive from guests and staff. Even if I am telling the guest that we can’t do what they’re asking, most are surprised that I take the time to reply. Responding to guests sets a tone that we care, and it models a mentality of openness for everyone on our team.

— Mike Solimano