The lack of banks means the connects will be uncompetitively long compared to UA.
Yes, it is leisure, see above comments on why this works so poorly for revenue management.
WN customers for the most part won't be comparing directly with UA simply because they're not on the third-party travel sites. Some might price compare between SWA's website and UAL's or Google Flights, but it's less likely they're going to add connection time to the equation. And, FWIW, UA is perfectly happy to sell some long connect times at DEN -- over six hours in some cases, even connecting to/from a hub market like LAX.
The revenue management angle will really hinge on the amount of the subsidy and whether those connections bring in significantly more revenue on the other legs than the company would realize without the connection to HDN. For something like LAX-HDN, for example, UA wants at least $600 for a round-trip on weekend days in peak ski season. But they'll sell you LAX-DEN on those same days for under $300 round-trip in most cases, undoubtedly matching WN/F9/NK. That connecting passenger is easily generating enough incremental revenue to justify the cost of getting them to and from HDN.
That all said I’m not sure they are allowed to subsidize DEN-HDN on WN and not offer it to UA also. Unless they can only because WN is a new airline.
The subsidy is almost certainly coming from the Steamboat Ski & Resort Corp./Alterra Mountain Co., not from the airport or any other government entity. As a non-governmental entity, they can subsidize whatever they want. I'd speculate that the company had gotten negative feedback on guest surveys about the cost of flying to HDN.
WN has always told the good folks in Palm Springs that they don’t do seasonal service it’s not conducive to their business plan.....Wonder what they will use for an excuse now?
Historically they haven't done seasonal markets, but times change. And Palm Springs is a bit tricky for WN in that they're not strong in most of the markets which could support a daily 737 to PSP. They're big in the Bay Area but not SFO (which would be the strongest driver of PSP traffic in the region). They'd find it tough to compete against AS from SEA/PDX, or DL/SY from MSP. Maybe they could make DEN/MDW/DAL work with connecting traffic seasonally.
Surprised not to see JAC first.
WN had a short-lived weekly service to JAC back in the 1980s... so you could say it was first.