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Shorter seasons, higher snow lines, rising operating costs and key demographic slowdowns would suggest that skiing is an industry in decline.
But even as these topics were being discussed by ski executives from more than 20 countries at the inaugural European Mountain Travel Summit, the audience’s mood remained elevated, bolstered by passionate speakers and Alpine views, seen through the window of the Crans-Montana, Switzerland, conference hall.
Attendees’ optimism was sorely tested. When speaker Nicolas Rico, manager of operations for Emprotur Bariloche, Argentina’s primary ski area, spoke of how ash and sand from a Chilean volcanic explosion rained down and wiped out a full ski season, it seemed a dramatic, if relatively short-term, symbol of the magnitude and variety of the forces showering upon the industry.
His story, though, had a happy ending. The destination formulated creative recovery measures that left it in a stronger position than it had been before incident.
Challenges to the Ski Industry Climate change is at the center of many of the ski industry’s challenges. As a direct effect of global warming, Swiss officials have concluded that towns with elevations less than 4,500 feet will need to find economic models that are not primarily ski-dependent.
If there was a sense of inevitability about climate change, there was significant debate about other adverse issues. Several speakers spoke of red-flag demographic trends.
Prime among them were shifts in generational behaviors. For decades, baby boomers’ love of skiing fueled the sport’s growth, but beginning around 2006, boomer participation began to flatten, and it’s expected to decline further. Jurg Schmid, CEO of Switzerland Tourism, pointed out that women tend to stop skiing at age 60, and men at 65. Boomers are hitting that milestone in the thousands every day.
And if current trends continue, the vacuum they leave will not be filled by Generation X, whose numbers represent a smaller age wave, nor millennials, equal in size to boomers but demonstrating less enthusiasm for the sport. Paul Pinchbeck, CEO of the Canadian Ski Council, said that Gen X participation in skiing has declined 30 percent over the past five years. He also pointed out that, not only are millennials’ numbers dropping as precipitously, but those millennials who do enjoy the sport average only seven days on the slopes each year, versus the boomers’ 12 days.
In an interview at the conclusion of the first day of the conference, Rob Perlman, president of Steamboat Ski & Resort Corp., acknowledged “demographic headwinds” and “decline on multiple fronts,” but remains optimistic.
“At the end of the day, it’s about skiing and snowboarding in a spectacular environment,” he said.
Perlman also pointed to strong trends that are a good match for the characteristics of mountain sports, from the continuing strength of multigenerational travel to travelers’ desire for activity and elements of wellness in vacations.
How to Attract Millennials Several speakers focused on attracting millennials who, Pinchbeck pointed out, have the longest-term potential payback for any investment.
Harry Peisach, president and CEO of Ski.com, said that the fractured nature of the ski industry is at odds with millennial purchasing habits.
“When you book, you have to go to five or six (websites),” he said. “Millennials don’t like that. They want everything wrapped up in one package.”
Douglas Quinby, vice president of research for Phocuswright, added that the desire to pre-book aspects of a ski vacation ranked the highest among all categories of leisure travel surveyed.
And Ait Voncke, group vice president of market management for Europe, the Middle East and Asia for Expedia, said his company not only packages ski components, but also works to simplify things during the trip itself, such as arranging with resorts to distribute pre-booked lift tickets to travelers upon check-in.
Millennials “want it all to be seamless”, agreed Benjamin Glaenzer, head of vacation rentals in Europe, the Middle East and Africa for Airbnb.
International Versus Domestic Markets The speakers also offered advice to European resort operators in the audience, with Peisach suggesting that, to better cater to U.S. travelers, they should drop the “Saturday-to-Saturday requirements.” He also urged them to consider adding activities that are catching on in other destinations, such as uphill skiing, in which a skier walks up a mountain and skis down.
In discussing operational differences between U.S. and European resorts, consultant Laurent Vanat pointed out European resorts might be leaving money on the table due to both traditional pricing methods and governmental constraints that discourage the installation of yield management systems. He related the paucity of yield management systems to the fact that “in the U.S., the average ski pass costs $100; in Europe, it’s only $50.”
Vanat, whose research also pointed to declines in all ski markets outside Asia, built a case for how marketers should focus efforts. In a stagnant industry, he said, companies end up battling for market share.
“Only 2 percent of the world skis, and of those, only 12 percent travel to another country to do so,” he continued.
The rewards, he asserted, are potentially much greater if marketing is focused on domestic markets. Since the percentage of international skiers is so much less than domestic, a 10 percent rise in international visitors will only increase the total by a little over 1 percent, but a 10 percent rise in domestic travelers will increase the total by almost 9 percent.
The Rise of Asia The growth of Asia’s resorts was a clear bright spot during the conference. Benny Wu, chief strategy officer for the ski resorts division of Vanke Group, a Chinese ski resort operator, said skiing has grown 300 percent since 2011, albeit starting from a small base. Currently 12.5 million Chinese ski, but Wu estimated the potential market at 300 million.
Interest in skiing rose after the announcement that China will host the 2022 Winter Olympics and President Xi Jinping urged citizens to participate in winter sports, he said.
But he also acknowledged that most of the 568 ski resorts currently operating in China are of poor quality, with only 198 even having aerial lifts.
Of the Chinese who travel abroad to ski, 48 percent go to Japan, 23 percent to Europe and 19 percent to the U.S.
Although the potential is huge, operators were not counting on Chinese skiers to come to the rescue of struggling resorts in the West.
“That will take some time,” Steamboat’s Perlman said. “It’s not going to hurt, and it is an opportunity, but it’s not going to happen overnight.”
Summer Mountain Activities As the name of the conference suggests, discussion included “mountain” activities other than skiing. In a session simply titled “Summer,” panelists focused on how their destinations monetized resorts when there was no snow on the ground.
Christian Schnoller, CEO of Area 47, detailed his high-adrenaline playground in Austria’s ski country. It’s open only in the summer and offers everything from water slides to ziplines to wake boarding to off-road arenas. The path to profitability was not easy, Schnoller said; it took nine years to get all the necessary financing and approvals to get off the ground.
Hiking, mountain biking, gondola rides, golf, roller coasters and events enlivened summer months in many ski areas in the U.S. and Europe, but the business goal for resorts is modest, according to Steamboat’s Perlman: Break even, and provide some full time jobs to winter staff.
Switzerland’s Strategy Despite the various challenges facing mountain destinations, Tourism Switzerland’s Schmid outlined a proactive strategy for his country.
“Everyone has to ask, am I better, cheaper or different? We can’t be cheaper, so we aim to be a little better,” he said.
His strategy calls for being “better” across the entire journey. “Luggage is a big hassle in the winter,” he said, so Swiss Airlines will not only transport skies for free but, once you’ve handed them over to the airline, you never have to deal with them again until they’re delivered to your room.
The Swiss national tourism office also decided to only list hotels that meet its rigorous standards for quality on its website.
To further eliminate hassles, he said, the new Swiss Travel Pass now provides access for almost all modes of ground transportation, including trains, city buses, boats and funiculars.
And to attract new skiers, the country has facilitated the creation of a new ski school methodology, one that comes with a money back guarantee and allows skiers to repeat the three-day course as often as they want. In response to preferences of new-to-ski Asian travelers, there’s also a program that gets them on the slopes on the day they arrive.
The host region of Crans-Montana has for some time hedged its bets by also promoting itself as a golf destination, with three courses, including one designed by Jack Nicklaus.
And on Christmas Day, the hedge paid off: Although snow had to be created on its slopes, the golf courses were open for business.
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European Mountain Travel Symposium is produced by Northstar Travel Group, which also owns TravelAge West and Phocuswright.