One advantage of being a Colorado Sun subscriber is receiving the Outsider Newsletter, which had some interesting statistics on the US ski resort market. Since the newsletter only comes via email, I've copied the portion below, somewhat reluctantly since this might violate copyright and impinge on Jason Blevin's income. But perhaps others might choose to subscribe and support independent journalism?
So earlier this month, independent research firm IBISWorld turned its expert-eye on the U.S. ski resort industry and unearthed some interesting data and predicted a slowdown based on declining snowfall, warming temperatures and the added cost of doing business in a changing climate. IBISWorld also sees a slowdown in consumer spending on the horizon, further clouding the resort industry’s future.
Here are a handful of highlights from the report, which is available only for IBISWorld subscribers:
- Industry revenue reached $3.3 billion in 2019, with an annual growth of 3.6% between 2014 and 2019. Industry revenue will grow only 1.6% a year over the next five years to $3.6 billion in 2024.
- We all know industry profit margins dip when snowfall declines. IBISWorld assigned some numbers to the impacts. Low-snow seasons like 2015-16 and 2017-18 pushed resort company earnings before interest and taxes from 10.4% of industry revenue in 2014 to 9.0% in 2019. The 4.6% nationwide decline in snowfall in 2017-18 alone led to a 5.3% drop in revenue for ski areas. (So if the industry harvests $3.3 billion a year, the poor snow of 2017-18 cost resorts somewhere around $175 million. Ouch.)
- From 2014 to 2019, lift tickets and season passes generated 58.4% of industry revenue. Food and drink was 10.1% of industry revenue, ski schools generated 9.0% and gear rentals and merchandise sales accounted for 12%.
- Resorts rely the most on skiers between the ages of 35 and 54, with that demographic accounting for 41.1% of all resort business, followed by skiers under the age of 25 (21.7%), skiers older than 55, (19.5%) and skiers aged 25 to 34 (17.7%).
- IBISWorld determined Vail Resorts to control 47.3% of the U.S. resort industry, but the report came out before Vail Resorts acquired Peak Resorts, which controls 5.3%. So now, safe to say that Vail Resorts controls more than 52% of skiing in the U.S.
- Alterra Mountain Co. accounts for 21.5% of the country’s ski resort traffic, Boyne Resorts has 5.4% and Powdr has 4.6%.
- Consolidation by Vail Resorts and Alterra will continue as smaller resorts struggle to compete with the two giants.
- IBISWorld extracted financials from Intrawest, which Alterra Mountain Co. bought along with Mammoth and Deer Valley in 2017, to glean some information for the privately-held company. The report estimated that Alterra generated $706 million in revenue in 2018-19, up from $580.4 million generated by Intrawest in 2016-17.
- The report used industry trends and competitor performance to estimate that Powdr, the owner of nine resorts, including Eldora and Copper Mountain, generated $149.5 million in 2018-19.
