Prospects of the Ski Industry Formal Report
By Matt Skaien
In 2012 the winter recreation industry is facing a period of change that will challenge the future of these great activities. Sliding on snow has come a long way since it was invented long ago. Throughout the decades innovations such as fixed heel skiing, snowboarding, snowblading, and snowbiking. Along the way these winter activities have grown in popularity and there seems to be no end to the innovations that the human population can create for having fun on snow. This report will describe the different factors that will impact ski resorts around the world and the changes they face. Included in the findings is the change in global climate, the increase in immigration to western Canada and the US, the competition between all-inclusive sun resorts, the transition towards all season operations and ski technology. All of these findings will redefine the industry to the core, and the next 20-40 years it will be exciting to see the changes that will undoubtedly happen.
The future of the ski industry can be influenced by many different factors, for example, over the last year Canada saw a growth of 1.1% in the overall population of the country.[i] (Statistics Canada) A large majority of this percentage consists of Asian countries, Philippians (36,578), China (30,197) and India (30,252).[ii] (Citizenship and Immigration Canada) This growth creates a potential for new people to try winter sports like skiing and snowboarding. In China skiing as a sport is exploding, from 1996 to 2010 saw a growth from 100,000 to about 5 million. Resorts have also grown from three to over 70, and that number is growing every day.[iii] (Canadian Tourism Commission) Skiing in China is adapting into a family type sport but is somewhat inhibited by lack of quality of service. As the Chinese are the third highest traveling tourists in the world, this potential strongly sets Canada up for a new wave of skier visits in the future because a decent number of resorts focus on a guest experience at a high level. Combined with an array of activities on and off the mountain the new target demographic should be pleased with what Canada has to offer.
However this increase in tourism isn’t without challenge, will these new-comers be inspired to start skiing/riding in the first place? This question defines the obstacle of targeting this new demographic effectively because the majority of the people moving west have little to no sense of skiing culture and what it is like. Many travelers to the western hemisphere try skiing as a novelty but are not keen to pursue it. This really stresses the importance of retaining as many first-timers as possible. Maximize a positive experience and try and build an all season type interest for as many guests as possible. Affordable family rates or inexpensive youth day tickets will help with the trail period and allow for families to spend a day together and try a new activity. The potential for growth is possible, but only ski areas that diversify their marketing and sales strategies will be able to benefit from this new demographic.
Another option is to offer next to free skiing to kids up to a certain age, for example 12. This can be seen as a win-win for families to save money, and ski areas increasing trial in the sport. It is a high initial investment but could payoff in the long term. Some smaller ski areas may not be able to afford to take this kind of risk because of present financial stability, for this reason many struggling ski areas may cease operations in the future. This is significant because a large majority of smaller ski areas are cheaper feeder type hills which are important to the existence of larger destination type resorts. A feeder hill is a place where families or individuals interested in trying skiing/riding for the first time, go to try the activity. They are typically inexpensive and close to a nearby community.
Competition for customers also exists between different types of destination resorts, not just ski areas, but worldwide. A large majority of people seem to prefer to travel to warm places for a vacation, rather than to a ski area. It’s hard to compete with the value received in an all-inclusive ocean/beach resort, with airfare, accommodations, and food & beverage all included for the same price, however some ski areas are catching onto this trend and offer an all in one activity pass. For example Silver Star Resort, located just 45 minutes from Vernon BC, is the first in Canada to offer an all-inclusive seasons pass called the “My One Pass.” [iv](Silver Star) This pass includes free access to all downhill terrain, Nordic trails, snowshoeing, ice skating and tubing. Also with the pass guests are eligible for discounts for family members, retail gear, restaurants, accommodations, and many more. They also offer a payment plan so that it is more affordable to a larger market of customers. This combination pass should be seen as a huge improvement over the current ski area model and a giant leap in the right direction to compete for guests with the sun destination resorts.
It is fairly common to find people at a ski hill that are from Australia and New Zealand, they seem to be everywhere actually, this is because Canada and Australia have an agreement to allow people to travel and stay for up to two years and work in a different culture. The draw to the Australians is the different scenery and temperature compared to home. Another reason is because inspired skiers/riders are slowly losing their snowy areas to play on; this is a major effect of global warming. It is estimated that by 2020 two thirds of Australian snow will be gone; this crushes a billion dollar industry that currently exists there.[v] (Tanquintic-Misa) As the world’s climate changes it impacts every area in the ski industry negatively; decreasing snow bases year after year and much shorter winters. In the not so distant future ski areas on the east coast may see a two week shorter season and a 75% chance of not opening before Christmas.[vi] (Dunfee) This will force areas to invest in advanced snowmaking which will reflect in guest ticket prices. Aware of this situation many ski areas have shifted their focus to green initiatives. Whistler Blackcomb is leading the industry in environmentally friendly alternatives and has been awarded for the development of the Westin in Whistler with an AWARE Whistler Environment Business Award, and a Green Certification from The Carbon Neutral Company. The hotel uses an array of different types of energy saving technology including hybrid vehicles and appliances, a strong recycling program and committed staff that values the goals of the establishment and the change that is being promoted. Whistler also recently built a 33 gigawatt (GW) hydroelectric generator that is said to offset 100% of the ski area’s power needs. Many other ski areas are joining for example one area in the US, Jiminy Peak, Massachusetts, built a 1.5 MW wind turbine that provides as much as 50% of their resort’s needs. [vii](2nd Green Revolution )
With seasons shortening in the foreseeable future an option for the resorts to remain in business is to shift operations from seasonal to year-round. Developing new activities to attract guests could include, mountain biking, golf, hiking and more. The advantages include the potential to retain customers all throughout the year, depending on the location, hosting events, concerts, conferences and summer camps maybe a possibility. Whistler Blackcomb is a great example of a winter resort that has adapted into an all season facility. They offer experiences ranging from the Peak to Peak gondola ride, fine dining, to horse back riding and white water rafting.[viii] (Whistler Summer Activities) Many skis areas however see this as a high risk low reward because without a large variety of activities, the summer resort model may not bring much revenue. This is another reason why resorts that don’t adapt properly may die out in the coming years.
Back to the cooler season, there are new innovations in equipment technology that allows winter lovers to improve their skills at an increased rate. Gone are the days of using skis that are as tall as you are with your arms straight up, new styles of skis are shorter and wider than those past artifacts. Shorter, flexible skis allow people to be more nimble when turning on the hill while retaining edge control and speed stability. New skis are also wider, which allows skiing that fresh powder to be much easier. A wider surface area forces the rider to float up above the snow rather than sink down and struggle. These advancements have significantly lowered the learning curve for beginners when it comes to skiing because now the tools are working to help improve your ability compared to forcing them to work for you. The progression has led people to discover all new terrain that wasn’t possible before, higher, steeper and more extreme. On the other side of the scale like mentioned before new comers to the sport can continue to pursue snow sports because of the increase rate of success, this leads to higher retention and conversion rates from casual to frequent skier/rider.
Within five years ago was a new innovation called rocker technology. At first it was just seen as a marketing ploy but through trail its success and effectiveness was proven. Traditionally skis were built with camber style design. What this means is when a ski is laid flat on its base only the tip and tail of the ski would have contact with the ground. Rocker or reverse camber is quite the opposite, when laid flat only the center of the ski is touching the ground with the tip and tail flowing upward. The benefits of this change are quite dramatic and allow the user to turn easily in powder conditions allowing for increased precision and float. This new improvement is being introduced to all different types of skis ranging from beginner to expert for a variety of snow conditions. A combination between the camber design and rocker is being utilized to create a strong all mountain tool, this consists of traditional camber in middle and reverse camber or rocker at the tip and tail.[ix] (Rocker Guide) The new equipment is even drawing people that had given up on the sport in the past, “I ski better at age 40 than I did at 25,” said Scott Vennum, rental manager at Mohawk Mountain ski area in Cornwall. “Once this new technology hit, it is like it snapped. It got to be easy to ski in all conditions.” The increasing popularity has changed both the ski and snowboard markets, 38% of the skis sold now include the rocker design, and 75% of snowboards.[x] (Grant) Along with skis, safety devices such as bindings have advanced allowing more adventurous seekers the ability to travel into the mountains where there are not ski areas or lifts. Touring type bindings are responsible for this and with skins on the bottom of the ski allow for uphill travel.
As mentioned, the ski industry faces a number of significant challenges if it wishes to survive another century; Canada plays a large role in the future with new demographics and different types of resort opportunities. There is a hope however, many areas have recognized the issues at large and are taking steps to offset the carbon footprint that they create like hydroelectric, wind and solar renewable resources. This is just a small step in the right direction as serious action will be needed to preserve our important ice caps and winter areas. Technology innovations will aid in this battle as we develop newer more non coal ways to power our planet. Skis and snowboards will continue to improve allowing the population of snow riders to improve to the best of our ability. New strategies will need to be developed to combat market and climate changes such as all season resorts, all-inclusive type offers, and family/youth discounts.
[i] Statistics Canada. 1 July 2012. http://www.statcan.gc.ca/daily-quotidien/120927/dq120927b-eng.htm
[ii] Citizenship and Immigration Canada. 30th August 2010. http://www.cic.gc.ca/english/resources/statistics/facts2010/permanent/10.asp
[iii] Canadian Tourism Commission. April 2012. http://www.jtst.gov.bc.ca/research/ResearchByMarket/pdfs/asia/2012_China_Ski_Desk_Research_Report_FINAL.pdf
[iv] 2012. Silver Star http://winter.skisilverstar.com/tickets-passes/season-passes
[v] Tanquintic-Misa, Esther. Ski Industry and Climate Change. 15th October 2012. http://au.ibtimes.com/articles/394170/20121015/snow-alpine-winter-ski-australia.htm#.ULQxfIenza8
[vi] Dunfee, Ryan. Powder Magazine Article. 4th October 2012. http://www.powdermag.com/stories/climate-change-politics/
[ix] Rocker Guide. 2012. http://www.evo.com/rocker-guide-what-is-rocker-and-why-does-it-matter.aspx
[x] Grant, Steve. 18 November 2012. http://www.ctshopshere.com/travel/hc-ski-redesigns-1118-20121118,0,4870180.story