The Economics of the Skiing Industry

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Happy Holidays!  To those of you in ski country, I hope you are making some nice turns in a Covid safe fashion.  For those of us in warmer climates, like me currently in Charleston, SC, right now it’s writing and planning for my upcoming trip out west.

As mentioned in a previous post, many moons ago as a college senior in Economics I wrote my senior thesis with the above title.  All these years later it’s interesting for me anyways to think about what’s happened in the industry since 1980.

The Economics of the Skiing Industry is of course highly dependent on “skier visit”, which is driven by a number of underlying factors like, how much snow is there?!

So what else besides snow? Major considerations are the costs and free-time.  OK, that’s pretty simplistic.  From here it starts to get more complex. Obviously increasing “skier visits” is always on the minds of the leaders in the industry.  Total Visits = (# of unique people who ski in a given season) * (the number of days they ski).  Pretty straight forward.  Unfortunately for the industry “skier visits” are effectively flat, although there’s more unique people skiing, but they are skiing less.

Well over the holiday I found a couple of interesting YouTube videos exploring this whole topic further which you might enjoy.  The first is Why Ski Resorts Are Dying.

The issue I have with this story is writer makes the assumption the industry is dying because there  are less ski areas there there used to be.  The video opens with a description of a “resort” in NY that was 100 years old.  Well, commercial downhill skiing didn’t exist in our country 100 years ago is the beginning of the problem with this story.  In fact, skiing at this resort was just a slope and not this old hotel’s primary business.  Next, one has to be cautious when citing statistics — there’s not to my knowledge been even 1  major ski area which has ceased to operate.

The ones which are gone are predominately in the east and have been smaller “day trip” ski hills and not resorts at all.  These ski areas were undercapitalized and ultimately uncompetitive.  They failed due to marginal amounts of snow where they were located, combined with not enough money to make artificial snow, nor keep up with the high speed lift infrastructure of bigger resorts.

My hypothesis is,  although there are less ski areas, there are more ski lifts.  I wasn’t able to verify this, but I did find that today there are between 2600 and 2700 ski lifts in the US and on average over the past 15 years there have been 40 lifts installed each year.

I’ll dive in a bit deeper next time, but for now, enjoy the videos and explore the stats on the above links if you’re interested!