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Summer/Fall Revenue ski areas responding to the study realized a positive level of
Summer/Fall Revenues Up. Interest in understanding the pre-tax profit (figure 3). Breaking these 69 ski areas into two
impact of non-winter operations remains high in the indus- equal groups, the ones in the top half of the profit distribu- The finesT ropeway equipmenT available
try, as ski resorts leverage (and more study the potential to tion tend to be large ski areas (averaging 589,000 downhill
leverage) their assets during the summer and fall months. visits and 1,330 total employees). They have high levels of
Many ski areas are undergoing a transformation into revenue ($114.97 per visit), particularly for lessons and retail
four-season resorts, as they start to offer summer/fall activi- stores, and slightly lower average costs, especially for electric
ties and take advantage of local summer traffic to run chair- power/fuel, maintenance/repairs, general and administrative,
lifts and trams, utilize base lodges and conference space, and depreciation, leases, and interest expenses. This group of
Sun up expreSS, vail
populate trails with hikers and bikers, and fill hotel beds. 35 ski areas averages pre-tax profit of $17.1 million (25.2 per-
Some advantages of more extensive operations include cent pre-tax profit margin).
greater employment for local residents, higher utilization of Bottom-Half Profit. Ski areas in the bottom half of the
fixed assets, more diverse revenue streams, and reduced sea- profitable group (34 areas total) tend to be small ski areas,
sonality of those revenue streams. Nationally, 76 percent of averaging 150,129 downhill visits and $26.3 million in gross
all ski areas operate in the non-winter months, and among fixed assets. This group is most likely to have night ski-
that group of resorts, the summer period contributes 12.4 ing operations (68 percent do, compared to 50 percent of
percent to annual revenue, up from 12.2 percent last year. all ski areas), which contributes to their high level of utili-
Of those ski resorts with non-winter operations, the zation (34.8 percent). They also have low levels of deprecia-
average level of summer revenue is $4.3 million, up 13.8 per- tion, direct labor, cost of goods, other direct, payroll taxes/
cent from $3.8 million in 2014-15. The two largest depart- workers comp, and property/other taxes. Despite a decline in
ments/activities for summer revenue nationally are food the number of days of operation to 103 days from 113 days
and beverage ($1.2 million on average, up 15.8 percent) and last year, pre-tax profit margin averages 7.2 percent for this
accommodations/lodging ($984,000, up 4.1 percent). These group, or $815,000.
departments are related to weddings, meetings, and other Ski Areas with a Pre-Tax Loss. Thirty-four of the 103
summer group business, which are a major component of participating ski areas (33 percent) reported a loss of $1.95
summer business at some ski areas. million at the pre-tax profit level (improved from a loss of
Average visits during the summer nationally were 53,816 $3.6 million in 2014-15). These ski areas tend to be mid-
per responding ski area, up 4.1 percent from 51,683 last sized resorts (average downhill visits of 176,467). Revenue
summer. The most important contributor to total sum- per visit is quite high at this group of ski areas, at $101.55 per
mer visits is one that takes advantage of the existing uphill visit, with food and beverage playing an important role, but
transportation system: scenic chairlift rides (17,096 visits, expenses are even higher ($112.60 per visit). Costs are par-
up 2 percent). Smaller levels of average visits were noted for ticularly high for depreciation, interest, direct labor, general
mountain biking (8,421 visits, up 93.8 percent), golf (5,658 and administrative, and maintenance/repairs in this group of
rounds played, down 21.6 percent), alpine slide/mountain ski areas, contributing to the difficulty in showing a profit.
coaster (5,894 visits, down 20.4 percent), and zip lines/can- As mentioned, these ski areas as a group have high levels of
opy tours (4,201 visits, down 11.1 percent). depreciation ($2.6 million per resort, on average). Debt lev-
els are high, resulting in high interest payments ($1.4 million
Profit Levels per ski area); both these expenses are significant factors in
Distribution of Profit. Fewer ski areas reported a loss in the reporting of a loss at the pre-tax profit level (the group is
the 2015-16 season as compared to the 2014-15 season. One- profitable at the operating profit/EBITDA level).
third of reporting ski areas reported a loss at the pre-tax
profit level for the 2015-16 year, one-third reported profit Size Characteristics
of under $2 million, and the remaining 33 percent posted Distribution of Downhill Snowsports Visits. The char-
profit of $2 million or more. (Fifteen percent of resorts acteristics of the ski areas participating in the survey show
earned a profit of $10 million or more, a very impressive a diversity of sizes, as measured by snowsports visits (figure
result.) The average pre-tax profit among resorts in the study 4). The distribution of visits shows that most resorts hosted
was $5.4 million and the median figure was $790,000, up between 50,000 and 499,999 downhill snowsports visits in
from an average of $3 million and a median of $309,000 for the 2015-16 season (81 out of 103 areas). Six ski areas were
the 2014-15 fiscal year. smaller—less than 50,000 visits—while nine resorts were in
Top-Half Profit. Sixty-seven percent of the individual the 500,000 to 999,999 range. Finally, seven resorts in the

30 | NSAA JOURNAL | SPRING 2017