There are very few things that give me more joy over the winter than family skiing excursions, and there are very few topics that I enjoy teaching and discussing more than priority queues.
So when Killington, a popular ski resort, announced early this week that they are launching a priority access system, I had to write about it.
“Killington launched a Fast Tracks program, where skiers and riders pay a rate that begins at $49 per day — in addition to the $149 to $169 daily lift ticket cost — for priority access to 10 of the resort’s most popular lifts where ‘there are traditionally longer wait times,’ according to the resort.”
The idea of a priority queue, i.e., serving a certain group of customers before another, is extremely easy to implement and thus, very prevalent these days, from call centers to flight check-ins and boarding. Paying for this priority is also prevalent, but maybe a little less so. In certain countries you can even pay for fast traffic lanes, based on the level of congestion. In amusement parks, such as Six Flags, you can pay for priority similar to the one Killington is now offering.
The notion of priority access to resources is as old as civilization. The oldest record of such priority pertains to water resources and the Jewish laws from 3000 BCE. The Talmud says:
“A spring owned by the people of the city: their lives and the lives of others - their lives take precedence over those of others; their beasts and the beasts of others - their beasts take precedence over the beasts of others.”
Jewish law established a descending order of priority for certain types of water usage, and villagers versus non-community members or outsiders. At the top of the hierarchy was the “Right of Thirst” - no person could be denied the right to quench their thirst, regardless of whether they were a community member or whether the water was on public or private land. However, use by outsiders could be restricted, until the needs critical to the life of community members were satisfied. Thus, villagers' drinking use attained priority over outsiders' satisfying their thirst, and then villagers' irrigation and livestock needs were met before outsiders were granted access to water their animals.
So very early on, people realized that when resources are scarce, it is necessary to create a priority system which would allow for “fair use” among everyone. One such system is when people are served as they come, sometimes referred to as FIFO: first-in, first-out. However, it is important to stress that FIFO is also a priority scheme; granting priority based on timing and access, rather than importance and necessity, as demonstrated by the Jewish law.
The Merits of Priority Queues
The first step is to recognize that, when the number of people who want to use a resource exceeds the capacity of that resource, some people will be granted access prior to others. This can happen either by limiting access to the resource, or rationing it, which will reduce the quantity or quality of what everyone gets. In our case, there are more people who want to ski during the weekend than the resort can handle. In addition, more people want to ski during the holiday season than the rest of the year.
Clearly, one option is to charge a higher price on those days, which will decrease the number of skiers. Reduce the overall demand, but treat everyone uniformly. I am sure the price is higher during the weekend and the holidays, so the resort is already doing this to some extent.
So what’s the advantage of a priority queue where people now pay to have priority (as opposed to the priority queues we saw in the water access scenario from 5,000 years ago)?
The key idea (which is also the idea behind fast lanes in traffic) is to recognize that people value time differently, and to price-discriminate them based on this dimension. You charge a higher price for those who are willing to pay more, and grant them priority. For Killington, while the average wait remains the same, a group of skiers will have priority, and the resort will have higher profits, which can then be used to invest in higher capacity for the future.
While charging for priority access may seem like something only a profit maximizer would do, Mendelson and Whang have shown that a social welfare maximizer can benefit from a price-priority rule that will elicit the right preferences from people. Customers are charged the externalities they place on the waiting time of others.
In other words, priorities are a great tool when people are willing to pay, and resources are limited regardless of the motive of the service operator. Not granting priority to some means everyone is getting terrible service, or in the case of skiing, everyone is both paying high prices and waiting for a long time at the lifts. Everyone loses.
The Issues of Priority Queues
First, when you prioritize specific customers, the rest of the customers are, by definition, going to be worse off. In this case, the proper equilibrium behavior is one we can describe as “follow the crowd”: If other people are buying priority access, you should buy priority access too. Given the skiing prices in the US (which are already significantly higher than in Europe), adding $49 is not all that bad. Once you factor in sleeping arrangements and rental equipment, it’s probably close to 5-10% of the daily expenses. The issue is that, in this case, those who cannot afford it will have to wait even longer. In fact, much, much longer.
This brings me to the second issue: Who is paying for priority access? And who is this policy penalizing most?
While congestion roads are rationalized using the fact that some people are busier than others and thus may want to pay for priority, this is hardly the case in the ski resort example. In ski resorts, everyone there is on vacation, so it’s purely an issue of affordability and social standing. In fact, one would argue that the richer you are, the more vacation days you have. So you can either report that you will take an additional few days off, or just spend the entire winter on the mountain. In that sense, those who are penalized even more are those whose time on the mountain is limited: families.
I am a terrible skier. I learned how to ski late in my life (in my 30s), and while I can ski all blues (US) and all reds (Europe) and wide black runs, I don’t get any points for style, and I rely heavily on gravitation to bring me to the bottom of the mountain. Why do I still do it? I enjoy the family quality time. Very few things are as fun in the winter as skiing with my family, and the combination of nature, sports, and the lack of electronic devices is significant. In order to equally enjoy this time with my family, I would now need to spend an additional $250 per day to purchase a priority pass.
If the goal is to entice more people to join this sport, the resort is doing the opposite. One of the nice things about skiing in Europe (apart from the better food) is that skiing is viewed as a family passtime and not as a social status activity.
And this is the next issue: Killington’s Fast Tracks are not only offering priority to some people, but they are doing it based on social status and in a way that is very visible to everyone involved.
A few years ago we visited the London Eye. We booked tickets in advance, and given the limited time we had in London, we chose priority access. To my surprise, it was actually not that expensive. In fact, the price was similar to buying a regular ticket on the day of the visit. When we arrived, we realized that in order to get to the priority line, we had to pass by all those who had purchased a regular ticket and had been waiting in line for hours. It was a terrible experience for everyone, and I prayed that I wouldn’t bump into anyone I knew while walking by.
The good thing about priority queues in call centers is that you don’t know where you are in line and who has priority. In a hospital, you can see priorities, but you can rationalize them based on severity. Optics matter. But in this case?
And this brings me to the final issue: in this case, the resource is a natural resource. I know the resort built the lift system and maintains both the mountain and the lifts, but I find it unfortunate that in such a place, the action taken will make any existing disparity even more visible.
Who Should Have Priority?
I am not a priority-queues purist. Even when it comes to ski resorts, it’s ok to give priority to some people.
For example, ski schools have priority now, which makes sense. These are the people who should have priority in order to accelerate their learning and keep the slopes safer. There are also those who hire private instructors for that, but this usually entails paying a hefty price, which makes them a tiny minority on the mountain.
So, what’s the solution? I think Disney got it right in the past. Trying to maintain a balance between the feeling of an egalitarian family activity and the fact that resources are limited is not trivial. Disney had a solution that was called FastPass. You could “book” a slot for a future time on the most popular rides and if you managed to arrive at that time, you were allowed to skip the line. You could do this as many times as you wanted, but could not hold multiple passes at the same time.
But even Disney dropped this solution. In August, Disney announced that it is officially retiring its free FastPass system at Disneyland and Walt Disney World resorts in favor of a new system that will require guests to pay if they want to skip to the front of the line.
And while some of you may argue that this is exactly what Killington is doing, I think there's a difference between a private firm maintaining a private resource, and one utilizing a natural resource.
So the suggested solution for ski resorts is to continue to grant priority to ski schools. If the resort wants to offer priority access, they can provide a FastPass-like system, where priority is granted only once per person, preferably during an off-peak time such as early morning, and made available to everyone without additional pay.
Priority queues make sense when everyone is better off because of them. Priority in hospitals makes sense on both a societal and personal level because if I were in an urgent situation, I would like to know I will have that priority.
In the case of a ski resort, I find the idea of charging for priority access to an activity that involves family leisure time and a natural resource (without overall meaningful improvement), to be in very poor taste.