Ski market trends

The Alps are home to 35% of the world’s ski resorts and attract 44% of global ski visitors annually. The largest and most mature of all global winter sport markets, they are host to 82% of the world’s largest ski resorts, that attract more than a million visitors each season.

Over recent years, France and Austria have seen growth in attendance, whilst Swiss resorts have experienced a steady decline, due to an ageing domestic population, and a trend for foreign skiers (who account for half the Swiss market) to opt for cheaper euro denominated resorts. The un-pegging of the Swiss franc from the euro earlier this year (see The Impact of Currency) may put further downward pressure on Swiss attendance figures.

In spite of this, Switzerland boasts more prestigious ski resorts, and attracts more wealthy skiers from across the globe than any other country. The top tier Swiss resorts, together with a few French and Austrian locations, are frequented by celebrities, European Royalty and business magnates. They are well established destinations for the global super rich, both to ski and to buy property. There remain fiscal advantages to property ownership and or residency in Switzerland.

The United States is the world’s largest ski market (Figure 1), with 56.9 million ski visits in 2014, closely followed by France, with 55.6 million. The Swiss market is half the size of the French and Austrian markets (25.5m visits), but is significant in that it is focused at the premium end.

^{Source: Laurent Vanat}

Skier flows

While the majority of skiers undertake the sport in their home region, given its compact size, Europe stands out as the market with the most cross border flows. Austria has more foreign skiers than domestic ones, making it the third biggest market globally, with 51.9 million skiers, 66% of whom come from abroad.

In spite, having relatively limited ski options in their home country, Germany has the largest number of skiers globally (14.6m), the majority of whom ski in Austria. The UK has the world’s fifth largest number of national skiers (6.3m). Aside from some indoor skiing, the UK market is almost entirely outbound, with France the favoured destination.

Challenges in Europe persist. With the populations of major European markets stagnating, ski markets are unlikely to benefit from significant growth in the medium term. At the same time, new markets in Eastern Europe are modernising and opening up to the west, which will further dilute demand across the region. Conversely, economic recovery in the major source markets (most notably the UK), should drive visitor demand, and in turn, home buying activity.

This competition means that skiing should become a less expensive holiday option in all but the most select locations in coming years. In locations where chalets and apartments are let for most of the season, real estate values are likely to reflect falling accommodation costs. But in locations where real estate is rarer, high quality and scenic property will be more of a long term capital hold.

In short, we envisage a two-tier Alpine market developing until visitor numbers start to increase again. On the one hand, exclusivity and rarity will hold value and on the other, falling income returns, in locations subject to most competition and unable to increase market share, may see values fall. Buyers of Alpine homes will need to review the fundamental qualities of the resort into which they are buying in order to assess which will be winners and which losers.

Resort conditions

Physical conditions and resort infrastructure play a key role in determining the quality of a ski resort, and in turn the depth of market for accommodation – whether to rent or buy. We have analysed 35 resorts in the Alps by looking at the resort size (number of guest beds) and ski conditions (average monthly snowfall and season length), as shown in fig 2.

In general, French resorts are large with good snowfall and long seasons, extending the rental potential of property. Meribel and Courchevel are two large resorts with especially long seasons (168 days). France also contains some of the world’s best infrastructure and is the only developed skiing destination in the world that is predominantly owned by one dedicated skiing maintenance operator, Compagnie des Alpes.

^{Source: Savills World Research, Igluski, Onthesnow, Bergfex, Ultimate-Ski}

Cost of skiing

The largest Alpine resorts span several valleys. The Three Valleys in France is one of the largest connected ski areas in the world.

French resorts deliver the best value for a ski pass with an average of 1.7km of piste for every euro spent on a ski pass compared to just 0.85km in Switzerland. Even accounting for a stronger Swiss franc, the disparity between France and Switzerland is significant.

Germany has one of the biggest skiing populations with 14.6 million national skiers, but being on the periphery of the Alps, has a flatter terrain relative to its Alpine neighbours. Because of this, German skiers prefer neighbouring Austria as their skiing destination. The majority of their resorts are relatively small and in some cases it its more common to buy a one day or a weekend ski pass rather than the usual six day pass favoured in the larger resorts.

^{Source: Savills World Research}