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NSAA The results of the study are presented in six geographic FIGURE 1 Total Gross Revenue
ECONOMIC regions and in four different size groups, as well as in 15 80 2016–17 2017–18 +7.5%
Change
distinct region/size breakouts. This level of detail allows
individual ski areas to benchmark their own performance
70
ANALYSIS 7.6 against their closest peer group, making the report an Dollars (millions) 60 +5% 61.87 66.53 -4.8%
50
invaluable resource to ski area managers, department heads,
40
AVERAGE ANNUAL
RESULTS 6.5 % REVENUE PER VISIT CFOs, lenders, appraisers, and other interested parties. 30 35.31 37.07 +3.1% 25.78 +12.6% +10.2% 10.20 47.75 45.46 +2% 26.02
Highlights from the study include the following.
9.26
25.01
25.52
20
16.82
10
A Quick Overview % AVERAGE WINTER REVENUES & EXPENSES 0 Overall Northeast Southeast 18.94 Midwest Rocky Mts. Pacific SW Pacific NW
REVENUE PER VISIT
Increase in Average Annual Gross Revenue
2017–18 Season Average annual gross revenue increased by 5 percent to FIGURE 2 Operating Profit Margin & Pre-Tax Profit Margin
4.3 $37.1 million per resort, up from $35.3 million (fig. 1). 50 Operating Profit Margin +3.5
TICKET YIELD percent Average gross revenue per ski area was up in five of the six 40 -1.3
RATIO AVERAGE ANNUAL TICKET geographic regions (with the exception of the Pacific South) 30 -1.4 +2.9 +3.2 36.9 35.6 -5.7 36.6 40.1
and up in three of the four size cohorts. The results show a
1.3% GROSS REVENUE REVENUE general overall level of strength in terms of gross revenue, Percent 20 30.9 29.6 18.9 21.8 +2 18.8 22 28 22.3
PER VISIT
with some pockets of weakness in certain regions.
10
11.7 13.7
Increases in Departmental Revenue 0 Overall Northeast Southeast Midwest Rocky Mts. Pacific SW Pacific NW

OPERATING PROFIT 0.3% Average revenue nationally for all major departments rose from 40 Pre-Tax Profit Margin
2016-17, with the strongest percentage increase for snowplay +5.7
and other winter operations (up 18.7 percent), accommo- 30 32
dations (up 12.9 percent), and rental shops (up 11.7 per- -1.3
BY DAVE BELIN, DIRECTOR OF CONSULTING SERVICES, RRC ASSOCIATES -1.7 26.3
cent). Increases in departmental revenue were also noted for Percent 20 22.4 21.1 -9.5
retail stores (up 8.2 percent), food and beverage (up 5.2 per- 17.8 16 +3 +3 15
10 +4.5
cent), and lessons (up 3 percent). A smaller increase was seen 10.9 2.6 8.9
in tickets (up 1.8 percent). In terms of relative magnitude, 0 7.9 7.2 5.9 5.5
lift tickets remain the department with the highest proportion Overall Northeast Southeast Midwest Rocky Mts. Pacific SW Pacific NW
of total revenue (46.1 percent of annual revenue), followed similar gains seen in the Pacific North (up 3.5 percentage
by food and beverage, lessons, accommodations, retail stores, points), Midwest (up 3.2 percentage points), Northeast (up 2.9
rental shops, and snowplay. percentage points), and Southeast (up 2 percentage points).
Ski areas in the Rocky Mountains and Pacific South posted
Total Operating Expenses Up declines in operating profit margin (down 1.3 and 5.7 percent-
Total operating expenses nationally were up 7.1 percent age points, respectively). Operating profit margin was up in
from a year ago to an average of $26.1 million per ski area. two of the size categories (small and larger mid-sized ski areas).
Several key expense categories increased, including other
direct departmental expense (up 13.1 percent), property/ Pre-Tax Profit Margin Dropped
other taxes (up 12 percent), direct labor (up 9.9 percent), Nationally, pre-tax profit margin fell to 16 percent from 17.8
electric power/fuel (up 8.5 percent), cost of goods (up 8.2 percent, down 1.7 percentage points. Similar to operating
percent), general and administrative (up 6.6 percent), and profit margins, pre-tax profit margins were up in four of the
payroll taxes/workers’ compensation (up 6 percent). Labor six geographies and two of the four size groups.
costs were likely affected by low unemployment rates and
increasing state minimum wages. FINANCIAL METRICS
& CRITICAL RATIOS
PROFIT MARGINS Increase in Total Revenue per Visit
Operating Profit Margin Declined An important metric in the ski resort industry is total reve-
Industry-wide, operating profit margin was down 1.4 percent- nue per downhill snowsports visit, which characterizes the
age points to 29.6 percent nationally (fig. 2). Operating profit extent to which ski areas derive revenue from a variety of
margin increased in four of the six geographic regions, with sources (most importantly tickets and passes, but also food

WINTER 2019 | NSAA JOURNAL | 39