Ski Lift Operators Research Articles

The snow must go on: can snowmaking keep ski resorts profitable in a changing climate?

ABSTRACT Climate change threatens the economic performance of ski resorts, and therefore the economies of mountain regions. Increased snowmaking is the leading adaptation strategy, but its economic contribution remains unclear. To fill this gap, we used dynamic panel data modelling to analyse the economic performance of 56 French Alpine ski lift operators over a 15-year period (2004/05 to 2018/19). Economic performance remains strongly linked to ski lift capacity and shows a high degree of persistence over time, all other things being equal. No evidence has been found that increased investment in snowmaking improves resort sales or profits, even in the worst natural snow seasons. These results strongly challenge the idea that increased snowmaking is an effective economic adaptation to climate change.

The deployment of snowmaking in the French ski tourism industry: a path development approach

ABSTRACT Many mountainous regions in Europe, including their tourism sectors, show a high degree of economic specialization. The ski tourism industry forms part of the long-standing economic success of the French Alps. Over the past 20 years, snowmaking has become a key feature of ski tourism, but future climate change will decrease its effectiveness as an adaptation solution to natural snow cover reduction. However, the ski tourism industry does not seem to be intent on stopping its investment in snowmaking, which raises the question of its dependence on this technology. In this study, we employ the path development framework to examine how snowmaking development has oriented decision-making to ensure the future of the French ski tourism industry. We analysed 38 in-depth semi-directive interviews and key financial figures from the French alpine ski tourism industry. Our results show that technical progress and specific investments in snowmaking have deeply transformed the management of ski resorts. Our finding is that snowmaking spurred ski lift operators to pursue specialization in the ski tourism industry. However, because of its ambivalent effects on the ski tourism industry, we view snowmaking development both as path extension and as path contraction.

Disclosure of environmental sustainability activities by large ski lift firms

This study investigates how environmental sustainability practices and reporting are disclosed by a group of six large ski lift operators across the world (Compagnie des Alpes, CDA (France), Silvrettaseilbahn AG (Ischgl) (Austria), Skistar (Sweden/Norway), Vail resorts (United States), Whistler Blackcomb (Canada) and Zermatt (Switzerland). Different types of practices are assessed. Results show that ski lift operators are highly active even if the extent of disclosure varies across resorts. Publicly listed ski lift operators in France and Sweden provide a detailed sustainability report and have also implemented environmental management programmes. Other firms develop their own sustainability strategies (Whistler Blackcomb, Vail resorts and Zermatt Bergbahnen AG). The practices range from monitoring of greenhouse gas emissions, 100 per cent green electricity, zero emission goals, energy reduction, fuel switching, water consumption, waste management and adaptation measures to climate change. Two ski lift operators show a decreasing trend in Co2 emissions per skier day or energy costs. Some operators report water usage in snowmaking per visitor which ranges between 250 to 1400 litres per skier day. Carbon offsetting and environmentally friendly diesel are also common tools. No ski lift operator actively participates in the UN global compact programme while three provide a sustainability report following the Global Environmental Reporting Initiative. There is an overemphasis on the use of easily available renewable energy sources, while other more complicated environmental concerns such as climate change risk are de-emphasised. Information on the main source of locally generated emissions, the fuel consumption of “piste” vehicles and snowmobiles is scarce.

Product diversification and isomorphism: The case of ski resorts and “me-too” innovation

Many ski-lift operators are trying to diversify their business by opening summer parks and in so doing, to reposition their resorts as year-round destinations. Almost half of ski-lift operators in Tyrol introduced such parks in the period from 2000 to 2018. The purpose of this study is to assess competitive determinants of following suit by copying these summer park introduced by competitors. Estimates using a Cox survival model show that the likelihood to adopt these summer parks is mainly determined by cooperation with competitors (coopetition) through year-round resident pass alliances and by the size of the operator. However, the park theme is, in turn, determined by location and terrain characteristics.

Size facilitates profitable ski lift operations

The book profits of 220 ski lift operators in Austria are analysed in order to identify the determinants relevant for business success. The median ratio of accounting profits to total assets was zero in 2013, while 43% had negative ‘book’ profits and another 12% had zero profits. Results using quantile regressions show that the ratio of book profits to total assets depends significantly on total length of ski slopes (size), maximum altitude of ski lifts, presence of a neighbour close by, the availability of nearby accommodation and the share of foreign overnight stays. Size usually has the greatest effect, which is even more pronounced in the lower part of the conditional distribution of the book profit ratio. Since size is the most important driver of the profit ratio, it can be expected that the pressure on, so far, untapped high alpine terrain will increase in the future.

Does Climate Change Influence Guest Loyalty at Alpine Winter Destinations?

Research has dealt extensively with different aspects of climate change and winter tourism such as the impact on ski resorts and ski lift operators, adaptation strategies, governance at destinations and reactions of winter sports guests to changing snow conditions. This paper goes deeper into the question of destination choice and examines the role of climate change among the many factors affecting guest loyalty at Alpine winter destinations. The study uses an established destination choice model with choice sets, destination image and dynamic feedback loop. A qualitative online forum identifies factors influencing winter destination choice, followed by a quantitative survey which compares Alpine winter holidaymakers categorised as “loyal”, “disloyal” and “undecided”. The results demonstrate that climate change clearly influences destination choice, but snow sports are not the only affected attractors. Enjoyment of the natural environment and value for money are just as high on the list of guest motivators. This indicates that climate change adaptation measures such as snowmaking can be counterproductive to guest loyalty because they spoil the natural scenery and raise prices. The paper concludes with a recommendation for winter destinations to prioritize conservation of the natural environment and integrate more environmental protection measures into their management strategies.

Modelling the wider effects of ski lift investments

This paper investigates the returns to ski lift investments. The analysis covers 370 ski lifts in 45 ski areas in South Tyrol in North Italy (Alto Adige) for the winter seasons 2002/2003 to 2013/2014. Dynamic panel difference-in-differences estimations show that investments in new ski lifts attract more skiers. On average, ski lift operators who have installed a new ski lift will have 6% more skiers in the following winter season. However, when the neighbouring ski areas are included there are signs of cannibalisation, as the net returns to ski lift investments decrease significantly in magnitude in the second half of the sample period. Furthermore, the positive effects of ski lift installations on the number of skiers are only temporary, generally fading out after 2 years. This proves that investing in a stagnating market is associated with risks.

The Economic Sustainability of Snow Tourism: The Case of Ski Resorts in Austria, France, and Italy

The purpose of this article is to analyse whether ski resorts in Europe are economically viable. Data originates from the financial statements of the 61 largest ski lift operators in Austria, France, and Italy. Descriptive statistics reveal that these operators are characterized by positive and relatively high returns, and by having little debt in general terms. The results show that the most economically profitable ski operators are also the largest. The elevation of the ski area is not relevant. Ski lift operators in Austria have a higher profitability than those in France and Italy. Overall, larger ski resorts are better prepared for the future investment needed to adapt to the new conditions in the industry, such as climate variability.

An Exploration of the Debt Ratio of Ski Lift Operators

This article examines the determinants of the debt-to-capital ratio of ski lift operators. The analysis is based on the total population of 248 ski lift operators in Austria. The median debt-to-capital ratio is 73%, with a highly skewed distribution, where almost every fourth operator exhibits negative equity capital. Robust regressions show that the debt-to-capital ratio significantly depends on the size of the ski area, elevation, location, presence of a neighboring ski area, supply of accommodation nearby, and the proportion of foreign overnight stays. However, the significance and magnitude of these factors differ between East and West Austria. For eastern Austria, larger ski operators, with neighboring resorts close by and a vast supply of accommodation, have a significantly lower debt-to-capital ratio. In western Austria, elevation and presence of a neighbor are significant predictors. Operators with a neighbor nearby exhibit a 15-percentage-point lower debt ratio.

The declining dependence of ski lift operators on natural snow conditions

This study tests for a structural shift in the relationship between revenues of ski lift operators and natural snow conditions. The analysis is based on time series data for the Swedish ski lift industry spanning from 1980 to 2017. Since 1970, snow depth in winter sport destinations has decreased markedly by about 5 cm per decade. Estimations based on the autoregressive distributed lag (ARDL) model show that revenues (in constant prices) of ski lift operators are significantly positively related to natural snow conditions, given the impact of relative prices and real GDP. However, ARDL estimations with rolling windows reveal that the sensitivity of revenues from ski lift ticket sales to variations in snow depth is declining over time. For the subsamples starting at the end of 1980s onward, revenues no longer significantly depend on natural snow depth. This is likely due to the implementation of adaptation measures such as investments in snowmaking facilities.

Climate zone crucial for efficiency of ski lift operators

This paper investigates the efficiency of ski lift companies across different climate zones in a group of countries based on establishment data. By a joint estimation of the stochastic frontier production and efficiency equations, the results indicate that ski areas in subarctic climate zones are far more efficient than their counterparts in warmer zones. The presence of a large local market and elevation of the ski area are factors not relevant for efficiency. Output of ski lift operators (companies) increases with the length of ski runs, number of ski lifts, share of slopes covered by snowmaking facilities and availability of fast lifts. Productivity is also significantly higher for ski lift companies owned by a large conglomerate.

The Christmas—Easter Shift: Simulating Alpine Ski Resorts' Future Development under Climate Change Conditions Using the Parameter ‘Optimal Ski Day’

Ski tourism is strongly influenced by climate change. The economic success of ski tourism regions depends on both the quantity and quality of the ski resorts' opening days. However, to date there has been little research on the quality of ski season opening days. The purpose of this paper is to develop and apply a parameter that enables us to assess the future development of ski seasons in a differentiated way. The results show a decrease of ski area opening days from 2011 to 2060 in the investigation area in general and a trend to an intra-seasonal postponing of optimal ski days, labelled the ‘Christmas– Easter shift’. The parameter developed contributes to our understanding of climate change effects on the tourism supply-side at a regional scale and offers decision support to ski lift operators or tourism associations in terms of adaptation measures.

A survival analysis of ski lift companies

This article investigates the factors influencing the survival of 244 ski lift operators in Austria over the period 1995–2011. Both Cox proportional hazard and competing risk models with time-varying covariates are utilized to distinguish between ski lift operators that temporarily suspended operations (e.g. due to insolvency) and those that permanently stopped their service. The results show that early adoption of snowmaking facilities led to a significantly lower risk of failure. Introducing snowmaking at later periods (i.e. from 2000 onwards) did not have a significant impact. Size, elevation of the ski areas, local competition, and regional effects also play a significant role in the survival of ski areas, but these factors cannot explain temporary failures. Surprisingly, the probability of permanent exits and temporary failures is independent of variations in snow depth at the nearest weather station. A lack of accommodation capacity and economic recessions lead to a higher risk of both types of failures.

Determinants of weather derivatives usage in the Austrian winter tourism industry

This study investigates the motivations, concerns and obstacles regarding the use of weather derivatives in the winter tourism industry. The findings from the interviews with 61 ski lift operators in Austria indicate that while the majority of operators are aware of weather risks and report substantial weather exposure, using weather derivatives as a means of offsetting potential loss is rarely considered. This is primarily due to a lack of awareness and knowledge, but on becoming aware of the availability of such instruments ski lift operators express interest in their possible use. The task is thus to increase awareness, knowledge and support for the ski lift operators with reference to the use of weather derivatives.

Determinants of corporate adaptation to climate change in winter tourism: An econometric analysis

While corporate adaptation strategies in response to climate change have been characterized, the determinants of adaptation have not been comprehensively analyzed. Knowledge of these determinants is particularly useful for policy makers to provide favorable conditions in support of corporate adaptation measures. Based on unique data from a survey of Swiss ski lift operators, this paper empirically examines such determinants at the business level. Our econometric analysis with linear regression and count data models finds a positive influence of the awareness of possible climate change effects on the scope of corporate adaptation. Surprisingly, no significant influence of the vulnerability to climate change effects on the scope of adaptation could be found. Finally, the dependency on the affected business and the ability to adapt influence the specific strategic directions of corporate adaptation.

Snowmaking and Climate Change

Winter tourism is highly sensitive to climate change. The sufficiently studied altitudinally dependent line of natural snow reliability is losing its relevance for skilift operators in Austria, where 59% of the ski area is covered by artificial snowmaking. But the diffusion of snowmaking facilities cannot be monocausally linked to climate change, as trends in tourism, prestige, and competitive advantage are important factors. Despite the fact that snowmaking is limited by climatological factors, skilift operators trust in technical improvements and believe the future will not be as menacing as assumed by recent climate change impact studies. The aim of the present study is to define reasons for the diffusion of snowmaking systems and to determine whether snowmaking can be a viable adaptation strategy despite ongoing warming, using a simple degree-day model. Results obtained with this method of assessing technical snow reliability show that current snowmaking intensity will not be sufficient to guarantee the desired 100-day season at elevations below 1500–1600 m. Snowmaking will still be possible climatically even at lower elevations, but the required intensification of capacity will lead to significantly higher operation costs.

Rupture of the distal biceps tendon: A complication of using the drag-type ski lift

Rupture of the distal tendon of the biceps brachii is a rare injury which has previously been thought to represent 3% of all ruptures of biceps brachii. The incidence of this injury has been estimated at 1.2 per 100,000 population per year. Although rare, the injury does appear to be most commonly caused by an unintentional eccentric load to a flexed elbow with a shortened and contracted muscle forcing the joint into extension. Risk factors for rupture of the distal tendon of biceps are thought to include both local and systemic factors. Local factors, such as increased functional demand (which may occur in heavy manual labour or weight lifting) are implicated and a theory of repetitive minor trauma and hypoxia caused by mechanical impingement of biceps tendon during forearm rotation has been proposed. Systemic factors such as smoking, steroid use, hypercholesterolaemia, obesity and diabetes mellitus are also implicated. As previously reported, in most cases of rupture, tendon degeneration and subsequent rupture has a multi-factorial aetiology with a mixture of predisposing hereditary, structural, overuse and social factors. Rupture of the distal tendon may lead to a significant functional deficit with both a reduction of power and a decrease in range of movement of flexion at the elbow and supination of the forearm. We report two cases of rupture of the distal biceps tendon which had been sustained in the process of using 'button' lifts on skiing holidays. Previously described mechanisms of rupture of distal biceps tendon include weight lifting, 'spotting' gymnasts, carrying and catching heavy loads and ten pin bowling. Although the overall injury rate for skiers is known to be between two and five skier injuries per 1000 skiing days, a thorough literature search has not revealed any previously described cases where rupture of the distal biceps tendon has resulted from the use of the drag lift in ski resorts. Both patients reported the flexed elbow being subject to an eccentric load forcing the arm into extension which supports this as the likely mechanism to cause rupture. The principle of the drag lift is that once the bar is 'loaded' with the mass of a skier, the coiled drag cable is gradually released with increasing tension until the tensile force in the cable is enough to overcome the force of resistance caused by the mass of the skier, the force of gravity, the co-efficient of friction between skis and snow and the effect of the angle of the slope. When the cable force exceeds this combined force of resistance, motion is initiated and the skier will then be accelerated to the speed of the drag lift. The ski lift operators and designers clearly have to accommodate a wide range of skiers of varying weights. Snow conditions (and therefore co-efficient of friction) will always be changeable throughout a ski season and gravity is clearly a constant. The 'spring boxes' which allow progressive loading of the individual drag cables are manufactured to regulation standards and lift operators cannot change these. This means that ski lift operators can only influence two remaining factors. One factor is the initial gradient of the drag-lift run up which the skier is being 'dragged' and the other is the speed at which the drag lift runs. The area where a skier 'catches' the drag-lift is known as the loading area and guidelines from ski-lift manufacturers state that this loading area should be without an incline (Harrusch Lift Manufacturers). Both cases reported a slight incline at the loading area involved. The other factor which can be influenced is the speed of the lift. Most drag lifts run at speeds of between 300 and 400 feet per minute which can be changed by lift operators. Faster lift speeds cause a more sudden loading of the drag cable which would increase the risk of tendon rupture or other injury. If injuries such as the tendon ruptures here described are occurring as a result of drag lift use, we suggest that either the gradient of incline at the loading area of the lift is too steep or that the speed at which the drag cable runs is too great. Both of these factors could easily be addressed and we suggest that the issue (and implementation) of guidelines to ski lift operators regarding optimal gradient of incline and optimal lift speed may help avoid the excessive eccentric load on distal biceps tendon which can lead to rupture.