top of page
Search

Ski sector 2024 - The latest challenges and opportunities for the industry

Firebird Director Chris Thompson talks conditions, climate and trends in the ski sector this year, in his new update for ski enthusiasts, travel owners and MDs.

It’s been over a year since I shared my last update on the lessons, trends and challenges for the ski sector – so how are things going for 2024?

“Selling ski holidays involves synching up lots of different moving parts”

In the past couple of weeks I’ve had a number of interesting conversations with a variety of small and medium enterprises (SMEs) in the sector on this topic. The overall message I’ve had: the ski industry is hard work right now!


Of course that’s always been the case to some extent – selling ski holidays involves synching up lots of different moving parts, all while banking on favourable weather conditions. But more than one person I spoke to said they were struggling to find fun and enjoyment amongst the graft, challenge and competitiveness of the industry in the way they used to. There may be owners struggling to see how they can leave the industry on a high note.

 

Perhaps that’s something to do with a lot of us in the sector getting older and tireder(!) and perhaps it’s more than that. Thanks to a combination of Brexit fallout, the long-term impact of Covid-19 and global inflation, margins are under pressure in the ski sector. All the operating costs have risen. Budget accommodation is harder and harder to find – with owners and developers typically preferring to pitch their properties to the most affluent consumers at the top of the market (i.e. those whose spending decisions are least affected by a fluctuating economy).


Lift pass prices have also gone up a lot in the past 10-15 years. Whilst this does not mean they’re bad value (I think most are great value for what they include) it does increase the overall spend for the average holidaymaker, who’s already feeling the pinch in their household budget.

 

Traditionally, skiing holidays are booked by most British households on top of their summer holiday, rather than instead of it. This means that, while travel spend is generally strong in the UK at the moment, many consumers may be choosing to let go of their snowy break before they let go of the summer one.


Poor snow makes this an easier decision of course. This seems to be the case even among a reasonably affluent middle-class audience – traditionally the ski sector’s largest demographic (those who are “well-off but not wealthy”). A significant chunk of this group will now be experiencing mortgage cost increases; rises that, in some cases, are deducting thousands of pounds from what was previously disposable income. 

“Media coverage has tended to exaggerate conditions to consumers”

Customer buying habits in the past 12 months add another layer to the story. Across the ski sector, among the operators I know, sales in early summer 2023 were generally good. Autumn figures were often disappointing, but there was another strong wave of sales in January when lots of snow was reported. Once that snow eased off, however, things slowed down again. As a consequence, I’ve been hearing that there is a lot of capacity left for late March going into Easter. Even with plenty of deals about, many skiers continue to hold off. This is bad news for some providers, although others will still have had a good year thanks to strong sales earlier on.

 

We’re into our second slightly ropey season for snow in Continental Europe which hasn’t helped – this being the UK’s go-to region for the sport. That said, a few operators I spoke to pointed out that national media coverage has tended to exaggerate just how bad snow conditions were, by focusing on the type of gloom-mongering stories that receive maximum interest and attention on social media.

 

As one operator put it, a lot of this coverage “focused on the negatives in resorts that no one’s heard of” while simultaneously overlooking the fact that hundreds of thousands of skiers have enjoyed fantastic ski holidays in other places. Indeed, high-altitude resorts such as Val d’Isère, Tignes and La Plagne have sold really well. It is the lower-lying resorts where poorer weather conditions – and/or expectations of poor conditions – have significantly impacted ski holiday sales.

 

Interestingly, two operators I spoke to, for whom lower-lying resorts have formed a large proportion of their offering over the past few years , have now decided to drop low resorts from their product range completely, consolidating into higher resorts. Meanwhile, customers who never used to enquire about altitude when booking are now asking this as a priority question when choosing where to go, and who to travel with.

“Many businesses in the ski sector are struggling to stay relevant and accessible to young people” 

On the subject of snow conditions, a growing consciousness around climate change is also having an impact on the sector, as I observed last year. This is understandable. In my 40-odd years of skiing I’ve unquestionably seen snowlines move up the mountain. While some resorts are making efforts to embed more sustainable initiatives in their region, I don’t yet know of any who are factoring in the massive carbon footprint of those skiers arriving by plane. This is clearly something the sector needs to look at, given the big question mark that hangs over the sustainability and environmental impact of skiing as a holiday choice.


This question mark may well be one reason why many businesses in the sector are struggling to stay relevant and accessible to young people – potential new entrants who perhaps see skiing as something that causes, and is dramatically susceptible to, ecological damage. While there will always be a hardcore population of skiers that businesses can rely on booking every year, a quick search on Google confirms what many of us have been noticing for some time: that the population on the slopes is ageing, with fewer youngsters making moves to take up the sport.


As always, there are some notable exceptions to this trend, in the form of newer businesses like Heidi and Ski Yodl (both launched in 2018). Both operate using more price-led, youth-focused models than the bulk of their competitors – and it will be interesting to see whether any similar models emerge to target young skiers over the next 3 to 5 years.


I was also encouraged to hear from a provider of school ski trips, who reported experiencing a bumper 2024 season – thanks in part to stimulating bookings outside the typically bottle-necked half-term period. Within those school groups, there will no doubt be a number of children who feel inspired to keep up skiing for life.

“Mountainous areas have huge potential appeal all year round”

In terms of the sector more broadly, any action to help make the sport feel less elitist and more accessible could also help any struggling SMEs. This is difficult to do when high-end holidays remain those with the best margins, and so shape the market (including bars, restaurants, activity providers, etcetera) by targeting travellers with big budgets, ultimately pricing lower-income skiers off the slopes.


Looking 10-15 years ahead  I suspect that any company that is 100% all-in on skiing will probably have to go high-end to do well in a constrained market – a factor that will only perpetuate elitist stereotypes. Making skiing in Europe and North America both appealing and accessible to a diverse client base currently looks like a big challenge. It might be an insurmountable one. 


However, those who are open to branching out could improve their accessibility and take-up by looking at the mountain sector as a whole. The truth is that mountainous areas have huge potential appeal for holidaymakers all year round – not just when there’s snow about.


Some destinations and operators are already thinking carefully and creatively about this, exploring their options and discovering niches for new sections of the market. Which brings me to another important observation we’ve noticed in Firebird: current attitudes towards mountain-focused SMEs from potential buyers.

“The challenges are surmountable for most SMEs who want to release value”

Overall, most ski SMEs who are still up and running have done extremely well to weather the uncertainties and conditions of the past few years, making reasonable margins, building their reserves back up post-pandemic and so on. The challenge many business owners are facing now is in working out how to release some of the value they’ve accumulated, and step away from their businesses.


It’s an unusual time for the sector generally: in February, Powder White ceased trading blaming the impact of Brexit, Covid and the cost of living. After 41 years in business, Esprit Ski announced that this would be its last season, illustrating the difficulty of sustaining the catered family chalet model in today’s climate; and Esprit’s owners, HotelPlan UK (also owners of Inghams) was put up for sale by parent company Migros.

 

It is important to flag that good businesses can still find a buyer and I know of three solid ski businesses exploring options for a sale. The challenges in the market are surmountable if you have a clear niche, a plan for the challenges ahead and a strong team capable of delivering on those plans.

 

What we’re seeing is that potential buyers are keen to work with ski businesses that have demonstrable long-term value. These buyers are looking to invest in companies with a strong brand and clear offering, products that can weather changing market and snow conditions, USPs that command a premium, and, in an increasing number of cases, products that make the most of the mountain environment in every season.

 

With real strategy and real thought, without just repeating the models of the past, there are positive ways forward for the industry. And as we look ahead to the next season and beyond, I feel sure that the ski sector can adapt and thrive long-term.

 

Chris Thompson is a Director of the Firebird Partnership, with almost 20 years’ experience of leading and growing businesses in the travel and tech sectors. His focus is on creating strategy, building teams, and devising processes that are both efficient and value-building.


Learn all about Firebird at www.firebirdpartnership.com


*

Also by Chris Thompson:




195 views0 comments

Kommentare


Die Kommentarfunktion wurde abgeschaltet.
bottom of page