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Ski area economics down under

 Poster: A snowHead
Poster: A snowHead
Interesting - if slightly nerdy - discussion on the annual delicate balance of making a ski area viable in Kiwiland. Probably much the same in Scotland, I would think??

Crisp, clear conditions and regular fresh snow - heaven on earth for ski bunnies. Were it only that simple for the skifield businesses catering to the thousands who flock there for a bit of R&R.

Mt Hutt, two hours west of Christchurch, had a nightmarish start to the season with a snow storm in early June dumping twice as much snow as the skifield needed, and presenting all sorts of challenges.

The skifield and buildings had to be dug out - where do you put all that white stuff? And attempts to make the field safer with a controlled avalanche misfired, with mega cubic metres barrelling down, damaging a chair lift and the snowmaking machines.

No need for those machines anyway this season.

The company has brought up a Haglund vehicle to ferry skiers up and down the mountain, and it's proving a bit of novelty.

Mt Hutt is on its way back, though, from its less-than-auspicious start and skier numbers are catching up with last year's.

"We had a really good school holidays. The weather has just been perfect for us," general manager James Urquhart says.

Bad weather has closed Mt Hutt for 11 of the 61 days since opening, mostly in the first two weeks, but a month has passed now without a closed day. Touch wood for the rest of the season.

Cantabrians are emerging from their post-earthquake shells and heading back to the snow. Over the school holidays the field was packed with locals and Australians, who make up about 30 per cent of the trade.

"That's helped us a lot," Urquhart says.

And this month Mt Hutt and Methven village are hosting several international ski teams and many will be there for three or four weeks, their last chance to train before next year's Olympics.

"It's huge for the region. Obviously they carry a lot of support crew with them."

And in two weeks' time Mt Hutt will host a couple of events for the International Paralympics.

"We aren't complaining about the season to date," Urquhart says. "We've had a lot of Australians come back this year, which has been nice. The Canterbury skiers are back skiing and riding again so they are starting to get through the recovery process when they took a couple of years off."

RUAPEHU skifields general manager Dave Mazey isn't complaining about the season either. He's been running Ruapehu's two skifields - Whakapapa and Turoa - for more than 20 years.

The fields clock up 180,000 to 200,000 skier days each season.

Unlike the Queenstown commercial skifields, for which the Australians are 65 to 70 per cent of the patronage, Ruapehu fields depend on 85 per cent domestic trade, mainly North Islanders.
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This season the snow cover at Turoa is above average, but below average at Whakapapa and so far it looks like a similar year financially to last year, Mazey says.

The July school holidays were their best yet, about 15 per cent higher than 2012. So far so good.

Do you think you will make a profit this season? "I'll tell you some time in October," Mazey says.

You won't know until then? "Oh hell no."

One of the key challenges is to boost Monday-to-Friday trade and to market more aggressively to the 1 million people who live within two hours of the mountain.

"Weekends are critical for us now. One, you've got to have snow on the ground, but then two, you've got to have fine days.

"If we can get 10 fine Saturdays between now and the end of October we will have a very good year. If we have 10 closed Saturdays between now and the end of October it will be a very bad year financially.

"And if you can work out which way it is going to go I will tell you the answer to your question," Mazey says. "That's how fickle the business is. That's the difference between a profit and a loss."

IT'S looking sweet for Coronet Peak and The Remarkables. Only one closed day at Coronet Peak and three at The Remarkables. The two are sister fields to Mt Hutt, with the three owned by private company NZ Ski.

NZ Ski does not provide numbers on how many ski days the three tally, saying it is private financial information.

The new chief executive, Paul Anderson, says the fields had a fantastic snow covering this year, which provided the welcome early impetus for holidaymakers and skiers to book ahead.

One of the advantages of Coronet was that it did not need much snow to cover as it was largely tussock, as opposed to The Remarkables' rocky terrain.

However, July was unusually warm and that has been challenging for the snowmaking team in Queenstown. But the groomers and snowmakers were doing their jobs keeping prepared trails and runs in top condition.

"We're skiing top to bottom on all mountains and snow is in great condition," says Anderson.

The ski day numbers in Queenstown are up on last year and more flights direct from Australia to Queenstown are contributing to that. Australians tend to spend more on food and beverages and lessons than Kiwis.

The business has not noticed any impact on numbers from the strengthening of the kiwi currency.

Between them Coronet and The Remarkables employ about 900 staff.

"We are conscious of our place in the Queenstown economy," Anderson says.

Management's focus is on providing a consistently great product for patrons from the moment they step on to the bus to take them to the skifields.

Over the past decade, there's not only been a lot of investment in technology, snowmakers and groomers, food and beverage, but also in staff training and health and safety.

Anderson can't comment about profitability or whether the skifields business brings in good dividends for its owners. That is confidential.

NZ Ski's owners are two of the South Island's richest and reputedly most astute businessmen - John Davies and Murray Valentine.

"They are ambitious for Queenstown and for Mt Hutt and they want the best for the tourism industry in New Zealand," Anderson says.

"They've been strongly committed to making capital investments in these fields over the last 10 years or so since they have owned them. That provides you with a bit of an indication of what they will do with the cash flows from the fields."

Club ski fields are stronger now than 20 years ago. The advances in skiing technology make it easier to cope with the raw conditions untouched by groomers. Their businesses depend on members but also compete for seasoned skiers who relish the challenge, the adventure and the remoteness.

IN THE Craigieburn Range in the South Island, Broker River club is having a good year, says manager Sam Worsp.

Skier numbers are "way up on last year". The club opened earlier than other fields this year and for a week was the only field operating for 600km, attracting Australians and others who might have skied at Mt Hutt.

Up north at Ruapehu Alpine Lifts, the company owning Whakapapa and Turoa, there are no dividends for the 4000 shareholders. That's the deal.

The company was founded in 1953 by skiing enthusiasts to promote mountain sports. The cornerstone shareholder now is a trust, set up to protect the company from takeover.

Mazey says the business is still expected to operate commercially and make a profit for reinvestment in the business.

The operation at the Ruapehu fields is similar in size to Coronet and The Remarkables, employing about 800 staff at winter peak. The business was very profitable in the 1980s until the mid-1990s.

The volcanic eruptions in 1995 and 1996, higher fixed costs such as electricity, insurance, ACC levies have all had an impact on the business. And the company is more constrained than its South Island peers by the cultural significant of Ruapehu to local Maori.

Mazey says it's hard to compete against cheap flights from Auckland to Queenstown and discounted hotel prices. "That's a very strong competitive element for our business that didn't exist a few years ago."

And airfares to many holiday destinations are a lot cheaper now, too. "It's a much more competitive game, the whole recreational thing."








Coronet Peak

The Remarkables


Treble Cone Snowfarm

Ohau Porters Height

Mt Hutt

Mount St

Patrick Temple

Basin Roundhill

Mt Lyford

Broken River

Mt Cheeseman

Mt Olympus


Fox Peak

Mt Dobson

- © Fairfax NZ News
snow report
 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
I skied in Whakapapa in November 1999. It cost £100 for two days skiing, with a bus from Auckland and back. Including: lift pass, accommodation in dorms, food, entertainment (I watched some world cup rugby early in the morning at the hostel), all ski equipment including jacket and sallopettes. Pretty much all inclusive, although at the downmarket end of equipment! (probably akin to the ski hire in Scotland).

They will never make a profit if they run a business like that (the bus was full as was the hostel in November: the end of season)

snow report
 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?
you could have written a similar article about Scottish Snowsports in 2010/11 when we had an epic snow year.

Scottish snowsports centre's are heavily reliant on the weekend and holiday trade, bad weather over several weekends or the halfterm holidays can destroy a centre's year. A couple of the centre's are trying to change this and find trade in other areas and are trying to better there product to grab as much trade when the conditions are good and people have a choice of locations.

As somone who lives and ski's in scotland I vote with my feet and have noticed any others doing the same as an example In the past 2 seasons:

Glencoe have built 10 on site accomidation units with showers, totally refurbished the base lodge which is now open late to sell food and beers, built camping and caravan areas, replaced huge areas of fencing to help capture snow, overhauled almost every lift on the hill, taken delivery of two technoAlpin fan guns, organised lots of summer activities, built new downhill mountain bike trails...the list goes on

granted its not huge headline grabbing stuff like new lifts or new groomers.........Glenshee has done chairlift and 2 new PB 600's in 2 years but most centres are trying to improve the quality on the days they can open

As the cost of a lift pass increases due to fuel etc etc the centre's must be seen to be improving along with them

As a side this year may see a reduction in the cost of skiing in Scotland as this will be the first full year that cableways will not be subject to VAT
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However, July was unusually warm and that has been challenging for the snowmaking team in Queenstown. But the groomers and snowmakers were doing their jobs keeping prepared trails and runs in top condition.

Living just down the road from Coronet Peak I have to say that this statement is very much on the optimistic side. July was the warmest on record for this part of NZ and there has only been a couple of nights of full on snowmaking and as much rain as snow, although the grooming crew have done a fabulous job of making what snow there is as skiable as possible. This morning they had to postpone the Winter Games mens GS because the course was unsuitable due to warm temperatures.
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 Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
I went skiing at Ruapehu twice, both times for 1 week, but both times I only managed to ski for only 2 days, the ski lifts could not operate due to strong wind. Having said that, there are many nice walks near Whakapapa, so you won't get bored on those no ski days.
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