Ski resort arbitrage
Ski resort arbitrage
Our ski mountain of choice has an optional resort card that can be preloaded with any amount of money and can be used to purchase anything at the mountain (passes, lessons, food, gear, etc.).
They’re offering a 10% sale on these gift cards. It’s worth noting these are digital accounts so bo issues if you lose the card. Considering we spend about $1500-1700 a season, is there much downside to putting this amount on the card? Is this similar to getting a 10% guaranteed return since we’d be spending the money regardless?
I’m normally against prepaying for stuff and tying up cash…but a 10% return is appealing (albeit $150 return isn’t too impressive). I wouldn’t do this for multi year expenses since I imagine todays inflation would eat away at that 10% pretty severely over multiple years. There would be a risk if the resort went out of business as the cards would be worthless. While I don’t have access to their financials, they’ve been around for decades and are insanely busy, so I imagine this risk to be low for the next year (though perhaps they’re doing this discount to get needed cash?).
Given all that, this seems like an unsecured bond that will pay me 10%. Anything else I’m missing?
They’re offering a 10% sale on these gift cards. It’s worth noting these are digital accounts so bo issues if you lose the card. Considering we spend about $1500-1700 a season, is there much downside to putting this amount on the card? Is this similar to getting a 10% guaranteed return since we’d be spending the money regardless?
I’m normally against prepaying for stuff and tying up cash…but a 10% return is appealing (albeit $150 return isn’t too impressive). I wouldn’t do this for multi year expenses since I imagine todays inflation would eat away at that 10% pretty severely over multiple years. There would be a risk if the resort went out of business as the cards would be worthless. While I don’t have access to their financials, they’ve been around for decades and are insanely busy, so I imagine this risk to be low for the next year (though perhaps they’re doing this discount to get needed cash?).
Given all that, this seems like an unsecured bond that will pay me 10%. Anything else I’m missing?
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Re: Ski resort arbitrage
I'm not really sure how this is arbitrage. It's a discounted gift card, just like buying restaurant gift certificates or Big Box Retail gift cards.
Sure, it's worth it IF AND ONLY IF your spending won't be influenced by the balance on your card.
Sure, it's worth it IF AND ONLY IF your spending won't be influenced by the balance on your card.
Re: Ski resort arbitrage
Agree with previous poster - it's a bit of a stretch to call this arbitrage - it's just a discount - akin to a sale.
The general issues with such things apply:
* Avoid spending more than you otherwise would have
* Extra transaction up front (to buy the card or whatever)
* Mild annoyance to keep track of the card/digital ID, and use it properly
* Small chance of a hassle when you go to use it.
That said, you sound like the more-or-less ideal use case for this - you would very likely have spent that much anyways. Buy a card for, say 70-80% of what you think you'll use this year.
The general issues with such things apply:
* Avoid spending more than you otherwise would have
* Extra transaction up front (to buy the card or whatever)
* Mild annoyance to keep track of the card/digital ID, and use it properly
* Small chance of a hassle when you go to use it.
That said, you sound like the more-or-less ideal use case for this - you would very likely have spent that much anyways. Buy a card for, say 70-80% of what you think you'll use this year.
Re: Ski resort arbitrage
I'd probably do it but for half of your normal spend. You don't want to spend more than you normally would just because you have the card/discount. Also, who knows if your habits will be the same this ski season given the pandemic.
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Re: Ski resort arbitrage
Buying something like that all at once might also present an opportunity to meet a credit card bonus... which could easily top the savings on the card discount in the first place.
Re: Ski resort arbitrage
It might not be valid for buying a season pass so check on that. The season pass might actually be a better deal
You could be in a bind if you, or someone you normally ski with, have an injury and do not ski as much as expected. I know someone that bought a season pass then had their skiing partner break an ankle, in the parking lot , the first time they went skiing.
In some areas there are occasionally years when the snow is so bad that you cannot ski much.
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Re: Ski resort arbitrage
That’s the gamble with a season pass. They are so discounted vs daily rate the gamble for active skiers are worth it. I have 2 passes, the multi resort ikon pass and a local mountain, both require 4-5 days on the snow to break even…we average 30 days.Watty wrote: ↑Tue Nov 30, 2021 9:35 amIt might not be valid for buying a season pass so check on that. The season pass might actually be a better deal
You could be in a bind if you, or someone you normally ski with, have an injury and do not ski as much as expected. I know someone that bought a season pass then had their skiing partner break an ankle, in the parking lot , the first time they went skiing.
In some areas there are occasionally years when the snow is so bad that you cannot ski much.
It’s also why every season pass I’m familiar with offer very low cost insurance against a season ending injury. Although it’s inexpensive I don’t buy it. Last, I look at season passes over my 40 years of skiing, sure some years it’s not a good deal and others it’s a great deal. Simply stated if you ski/board with any regularity you should be buying a pass.
OP - I put cash on mine and my families pass each year at a 10% discount. It’s just one of those ways to reduce the cost of an expensive sport.
Re: Ski resort arbitrage
Thanks everyone. We already bought our season passes since the mountain sells out pretty early on. I'll add that it would be insanely expensive to buy daily passes if you go more than 3-4 times a season. I think that there is some default option to get a prorated refund if there's an injury - the mountain can easily resell the pass to their waitlisted customers.
I'm planning to put about $500 on this pass. We'll go about 15 times and the kids will do some lessons so I'm confident we can make quick work of the $500 without inflating our normal spending habits. I also need to demo some new boots so who knows how much that whole process will cost (obnoxious shaped feet).
*and yes, I should have put arbitrage in quotes
I'm planning to put about $500 on this pass. We'll go about 15 times and the kids will do some lessons so I'm confident we can make quick work of the $500 without inflating our normal spending habits. I also need to demo some new boots so who knows how much that whole process will cost (obnoxious shaped feet).
*and yes, I should have put arbitrage in quotes
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Re: Ski resort arbitrage
I totally agree. It's difficult for most to achieve the latter, but it can still be worthwhile.dukeblue219 wrote: ↑Mon Nov 29, 2021 10:13 pm Sure, it's worth it IF AND ONLY IF your spending won't be influenced by the balance on your card.
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