 Poster: A snowHead
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Given the points BGP raise above about being dependent on a few weekends and even then they might be hit by bad weather means it's essential to have the capacity to take advantage of the conditions when they come good. Which is why Glenshee maintain a much larger network of over 20lifts despite no meaningful on site year round income where as CML are getting up to 180,000 non skiing visitors up the Funicular!
With regards to the figures you gave, in the case of CairnGorm CML turned over £3.5m in the last year there's published accounts for, but the companies overall financial situation worsened to the tune of almost £500,000 (Olderalan posted a fairly detailed analysis of these on WH a while back). They pay £100,000 PA to HIE for lease of the mountain, funicular railway and major buildings - CML owns the tows and chairlifts these having been built up largely from operating profit until 1989 when the last major ski lift installation took place (Daylodge Poma).
CML employs over 100 full time year round staff, yet they have an outside crew of four working on over 20miles of snow fencing as well as the lifts.
With respect to the co-operative idea, CML describes itself as a "social enterprise", it is legally a non profit distributing company wholly owned by a charitable trust (Cairngorm Recreation Trust) operating a ski area on a publicly owned mountain. Maybe these are the problems not the solution? The Scottish Ski Area on the most found footing is also the Lowest, the Lecht, maybe that's because it's a private family owned business, for whom the owners and senior staff make no living if they don't make snowsports work?
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Update to the above, CML's website now has different figures for staffing. With 65 full time year round staff and additional seasonal teams for the summer and winter.
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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You need to Login to know who's really who.
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| Winterhighland wrote: |
| With respect to the co-operative idea, CML describes itself as a "social enterprise", it is legally a non profit distributing company wholly owned by a charitable trust (Cairngorm Recreation Trust) operating a ski area on a publicly owned mountain. Maybe these are the problems not the solution? The Scottish Ski Area on the most found footing is also the Lowest, the Lecht, maybe that's because it's a private family owned business, for whom the owners and senior staff make no living if they don't make snowsports work? |
Interesting, and a good example for bgp perhaps of how to make a Scottish ski area work, it's also the one that has the most effective snowmaking operation (all based on second hand equipment though).
I know Glenshee has some old snow canons too but I've never quite worked out how, with these around, they manage to have seasons when there's not enough snow to open most of the time - are they all broken or has Glenshee got some kind of micro climate that negates any snowmaking the minute the machines are turned on... I'm genuinely puzzled!
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| Quote: |
| I know Glenshee has some old snow canons too but I've never quite worked out how, with these around, they manage to have seasons when there's not enough snow to open most of the time - are they all broken or has Glenshee got some kind of micro climate that negates any snowmaking the minute the machines are turned on... I'm genuinely puzzled! |
They can only draw water from the small pond behind the Cairnwell Cafe there isn't the infrastructure to take it from elsewhere, so that limits the use of the cannons at rates of extraction greater than water input to the pond. They only have hydrants on Claybokie and the Plastic Slope poma, plus the bottom of Sunnyside, but not higher up that run.
It's very limited, it's old manual fan guns, high pressure systems would be better for marginal snow making, but even fan gun technology has moved on hugely since Glenshee got those guns. They need at least -4c wetbulb and someone has to be watching for a snowmaking window and physically there to turn on each hydrant and gun.
The other significant factor is that Glenshee has no mains electricity, the snowmaking costs are thus ramped up by an even bigger margin. You have hugely expensive electricity produced by old diesel generators, to power old manual fan guns that someone has to go and physically turn on each hydrant, and they can only do that after someone has gone and fired up the big lift powering generators at the foot of Sunnyside. Yet despite all that, they can keep the Claybokie open for weeks longer than anything else.
If the Glenshee Chairlift Company had invested several million pounds in the ski area (or Glencoe) instead of sinking it into a blackhole of a Golf Course on the back of govt advice of diversify or die to the ski areas, things might have been very different.
Last edited by Anyway, snowHeads is much more fun if you do. on Tue 13-11-07 13:55; edited 1 time in total
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bgp, Very interesting thread. I've private messaged you in regards to your quest to establish the future resort capacity / potential. Good Luck!
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You'll get to see more forums and be part of the best ski club on the net.
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bgp, is there any chance of letting us know how everything is going, many of us would love to know
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Brilliant full page spread in the Guardian yesterday (only got round to reading the paper this morning). Well donebgp, for the press coverage. This will create a lot more opportunities for you.
Always amazes me how slow that nationals can be at times we saw this in October first.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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Any updates? I forget where I clicked a link from to get here 
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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You should have (as should I - meant to but forgot) listened to the Radio 4 programme on last night at 8pm - we both ought to try "Listen again" 
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arv, Basically, having listened to the Radio 4 prog. The resort did not open for this season. There are grand plans but now mired because of the cost not least the exchange rate fall adding 33% to projected costs. But their is a will and determination to carry on, Bruno said basically he is not there for the short term or to make a quick buck.
Personnaly I think the plan for a 850 bedded hotel is way to ambitious as a starter project 
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You know it makes sense.
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Very interesting programme I thought, although it was one those ones where your curiosity gets the better of you as you listen/watch someone else getting mired in the proverbial and wonder how they'll get out of it, or if they will! I hope it all goes as planned or better for Bruno in future seasons and wish him and the resort all the very best.
BTW, as an addendum of sorts and because we had a wee discussion about Scotland above, it's interesting to note that Glencoe in Scotland, who have had a good season so far (as was last year), are currently looking into gaining further investors to help fund ambitious plans for future all year round expansion, e.g. new gondola system, accommodation on site etc. This comes as Scottish skiing is experiencing what the owners of Glencoe are calling a renaissance, doubtless in part as a result of the credit crunch and current exchange rate with the Euro (and other currencies).
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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Boredsurfing, roga, thanks for that, here is hoping for a development of Glencoe similar to the one planned for the Swiss resort
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Poster: A snowHead
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Boredsurfing: 850 beds was the architect's interpretation of my instructions. I have been saying around 300 bedrooms - 150 twin/double, 150 2-4-bed suites - making a maximum of 900 but a likely occupancy level of 600-800. We are targeting families, so interconnecting 2-4-bed suites are a key part of the concept, to try to keep the cost down for families without sacrificing quality.
The reason we have to aim high is that we cannot aim low on the lifts, as we already know that the existing facilities lose money reliably. So we have to expand the area and improve the lifts to provide a reason for people to come to the area. But that costs money, so you need to put plenty of people up the lifts to justify the investment, and that means having enough people staying in resort to balance (along with hopefully increased numbers from outside the resort) the lift capacity.
And even then, you probably won't do better than breaking even, so you need another source of revenue on which to make the returns. That means accommodation, and enough of it (given that there are very few "warm beds" in the village at the moment) to justify the investment in the lifts. But unless you can build a quality hotel for a cheap enough price, you find yourself in a Catch-22 situation where a smaller, cheaper hotel means you will lose more money on the lifts than you can make on the accommodation, but a larger hotel means you might break even on the lifts, but you've got a struggle to make money on the hotel. So the only way forward is to find a way to build a big enough hotel for a low enough price.
The disappointing thing about the architect's concept was that it wasn't as attractive as one would hope for such a beautiful area (although it wasn't ugly and modern, it was just larger blocks than you would expect), but it did seem to be a very practical option from the point of view of construction and operation. I was willing to compromise if it meant that the economics stacked up, but when he guesstimated CHF 80-120 million, it looked like he had designed something that was neither attractive nor good value. So we will be starting again on the plans for the accommodation. There's no hurry, as you'd have to be mad to push ahead with the project in the current economic climate, but we'd like to get everything lined up so we could start if we judged that the economy was about to turn the corner. Our objective has to be to get the hotel built for around CHF 40,000 per bed, which is tight, but according to people in the industry should be possible.
roga: I thought Miles did a really nice job with the programme, helped by the fact that our Swiss friends are all so charming. Art Furrer is a real character. He only talks, doesn't really listen, but what he said was bang on the money. The resort _does_ have to connect to the neighbours (and he and I agree that includes connecting his resort of Riederalp to the glacier resort of Belalp, as well as Ernergalen to Bellwald and Fiesch), and we _won't_ be going ahead unless the economic climate is right.
Those connections are so exciting but frustrating. With the addition of only two other lifts besides the ones we hope to build, you could convert the region from 4 separate areas of around 100 (1750-2900m), 60 (2000-3100m), 30 (1550-2600m) and 30 km (1250-2500m) into a linked area of 220km with skiing between 1250 and 3100 metres, which would transform the attractiveness of _all_ the resorts in the area. The trouble, as usual, is the enviro-communists, who seem incapable of getting a rational perspective on the economic benefit from those connections compared to the incredibly limited environmental impact.
The only reason, for instance, that Riederalp hasn't been connected to Belalp is because it would need a cable-car that just crosses the tip of the Aletsch-glacier Unesco World Heritage Area. It wouldn't start in the Heritage Area and it wouldn't end in it. Where it crosses is above the reservoir that collects the melt-water from the glacier. A cable-car would have minimal environmental impact as it crosses, even if the area below were sensitive, and the reservoir is far from an environmentally-sensitive area. Unesco themselves don't oppose the lift, I am told. You just can't get it past the objections of the enviro-communists. I hope a downturn will focus political minds to consider what the impact would really be and whether that should outweigh the economic benefit. Indeed, as this would link two locations of environmental/scientific/historic interest (the Belalp Hotel and Tyndall Denkmal on one side, where William Tyndall stayed when he was observing the Aletsch glacier and local flora and fauna, and Villa Cassel, home formerly to Sir Edward Cassel and now to the Pro Natura exhibition centre), this could make an excellent contribution to enviro-tourism in the summer months.
It was nice to hear someone like Art say how good the snow is up there. In my opinion (and I think this is shared by many in the area), the rest of the area needs Ernergalen as much as Ernergalen needs them, because we have the only north-facing slopes, and being on the other side of the valley, it gets very different weather, so it will frequently snow heavily on one side and not much on the other. The Rhone valley seems to be a weather boundary.
The programme probably made the prospects sound worse than they are. I am actually a little bit optimistic at the moment, though I still wouldn't put it at more than 50% to come off. Perversely, the global economy is so bad and the exchange rate so vicious to the Swiss economy that I expect it to swing back dramatically at some point. Probably not yet. Last time this happened, the Frank kept strengthening for 3 years, but when the Swiss economy finally couldn't stand it any more, it jumped dramatically the other way within months. Things are even more difficult for them this time, with Gordon and Barack's efforts to divert attention from their incompetence (and make sure there's no escape when they tighten the tax noose around our necks) by attacking tax havens. I think we'll be back to over 2 Franks to the Pound in a couple of years' time. It's just a question of patience, which is hard for the village, but not so hard for us.
In the meantime, we have to come up with a viable model (as above), and we need to get the villages to agree to work together, including the necessary connections. If all those happen, then the project still has a decent chance. The downturn is likely to be helpful to all of that.
One thing that has really improved the chances is that the canton (Valais) has recently got more flexible on the Lex Koeller restrictions on foreign ownership. Until now, there was an incredibly tight quota on the number of properties that could be sold to foreigners each year - something like a few dozen for the whole of the Valais, including Verbier, Zermatt, Saas Fee, Crans Montana, and dozens of other resorts. That meant you either had to be prepared to gamble all the capital yourself, or you were limited to Swiss nationals if you wanted to get some investment in early, which kept the value of such investment very low. Now they have loosened that a bit, so that if you construct and operate a resort according to a certain model that ensures that the beds in the resort are still controlled and let by the resort operator, you can sell rooms and apartments to foreigners on a buy-to-let, GuestInvest-type model. In the financial models, that has potential to make a huge difference. Especially as Inheritance Tax in the area is zero! A property in a snow-sure resort in a beautiful region (summer and winter), which yields you more income when you're not using it than you could get if you put the money in the bank, and which can be passed on tax-free to your children, could be quite attractive to savers besieged by their governments' efforts to pay for an engorged state.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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bgp,is the CHF 40K per bed, or per room?
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Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
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Per bed. But it's an estimated target, not a fixed figure. And it's made muddier by the fact that we want plenty of 2-4-bed rooms, which I expect should not cost twice as much as a 2-bed room. It's just a rough figure to use as a target.
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bgp, A very nice and interesting read. Good luck to you.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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bgp, Thanks for the update,
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I have been saying around 300 bedrooms - 150 twin/double, 150 2-4-bed suites
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Much more sensible plan imho. Have you looked at off site construction of the bedroom units? Certainly more economic than traditional build.
FWIW I thought you and your story came over very well, looking forward to the TV show which will surely follow
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Boredsurfing: Offsite construction - certainly will look at it.
TV - funny enough, we have had a production company follow the early stages with a view to a programme or series for Channel 4. But, because of the expense, budget horizons in TV are relatively short, so we have all agreed to put filming on hold while we are in the rather fiddly planning stages. But we should be able to resurrect it if it looks like the project is going ahead.
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bgp, thanks for the update, fascinating read. Hope it works out. 
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How about 2-6 bed suites for families with more than two children.
Last edited by After all it is free  on Wed 1-04-09 13:32; edited 1 time in total
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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The 2-4-bed suites should be interconnecting, allowing for upto 8 in the family.
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Good, can take a couple of their friends then too.
Best of luck.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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bgp, how's your venture going? this has all been good and interesting reading. hope it's working out for you and your investors.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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shoogly, It's not a great economic climate to be developing a second-holiday resort in one of the most expensive countries in Europe. When we started, the Swiss Frank was 2.4 to the Pound, now it's 1.6. The initial estimate of construction costs for the hotel and other buildings (e.g. mountain restaurant) came in roughly double what would be justifiable. The extent of potential cooperation with the neighbouring resorts (vital to offering an attractive package for visitors to all the resorts) has still to be resolved. We have to be realistic that the proportion of construction costs that could be financed in this climate is significantly lower than when we started.
It is possible for all of this to be resolved, so we are still continuing with the preparations, to be in a position to go ahead if it's viable, but even they are taking longer than expected. The canton has still not given its approval, 18 months into the process, when our Swiss advisers were confident it would be only a matter of a few months. To be fair to the canton, they can probably guess that projects aren't rushing ahead in these circumstances, and won't be rushing themselves to make politically-sensitive decisions that could turn out to be unnecessary pain.
One thing that puts this project in perspective is where existing resorts are going bust and coming on the market at a fraction of the construction cost. We looked at one a year ago. It was built in 2006, had a direct connection into a major area, but had only run for a couple of winters before going bust. The list price suggested by the administrators was one-third of what was spent on it, the best offer was around one-quarter of the cost, and we valued it at less than one-fifth. That's instructive of the challenges facing new developments, illustrative of the collapse in the market, and indicative of the sort of competition that Ernergalen would be up against. Pricing and demand adjust at the margins, as some of the more mid-market resorts discovered last winter, when the tour operators reduced their presence dramatically to focus their reduced numbers on the more popular resorts. Given the news yesterday about Thomas Cook and TUI's summer bookings (dire - 600,000 holidays still unsold by one of them), I expect this winter will be even worse.
The politicians' and economists' attempts to "secure a recovery" are simply preventing the necessary correction and stringing out the length of time that it will be inadvisable to invest (and making it difficult but vital to preserve cash in the meantime). If they keep us in this "unusually uncertain", zombified, proto-Japanese state for much longer, they could kill the project forever, because the Swiss authorities won't keep the permits open on a closed mountain indefinitely, and we won't/can't go ahead in these conditions. The authorities are probably still OK for a couple of years, but the pseudo-recovery of the past 16 months has been most unhelpful.
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It's a real shame you haven't been able to make the progress you (and we all) hoped to make. It's interesting that the massive development at Andermatt is proceeding - wonder how that will work out.
I was reading the Swiss Tourist Board annual report and was interested to see how, in terms of winter overnight stops during the 2008-9 winter season, the Swiss themselves account for over a third of a total 15.8 million overnight stays in the country, about as many as the next ten countries put together (Germany had roughly 2.8 million UK 1 million, everyone else less than 1 million). Wouldn't the Swiss be the best market to aim for, closely followed by the Germans? At least then you wouldn't have to worry about weak sterling.
I also think adding Erlen to something like the Snow'n'Rail scheme by Swiss Rail would give you a nice turnover in day trippers. From the old piste maps it looks fun for a day out, especially if there is some decent freeriding.
Anyway, do keep us posted. We're all hoping you succeed!
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