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2nd May 2017

The Ski Area Which Makes More Money in the Summer than Winter

Titlus Engleberg Ski Resort Switzerland

Following a few years of little snow fall and green rather than white Christmases, Swiss ski resorts are noticing a new phenomenon – they are making more money during the summer than the winter – and owners are loving it.
Thanks to a strong Swiss Franc, tighter visa restrictions on Chinese visitors and less consistent snow-fall than any period previously, ski resorts in Switzerland have seen visitor numbers drop and revenues plummet during what used to be their most profitable time.
Although this may sound like a nightmare to many, business and home owners are not worried. Whilst their winter business may be dwindling, summer business is booming and the profits are steadily increasing. Hans Grueuter, part-owner of ski area Titlis Engelberg has stated that “running a winter sports station is expensive, summer is more profitable”. The CEO Norbert Pratt has said that while winter activities make up a little over half of total revenue, they contribute only about 35 percent of the resort’s profit. The remainder stems from overseas summer tourists, hikers and other non-skiers spending on hotel accommodation, meals, lift tickets and mountain biking.

The move in importance from winter to summer based tourism is an important one for resorts all over the Alps. In their Annual Alpine Property Reports, Knight Frank and Savills touched on two new areas relating to increasing property values in alpine resorts:
1. An established summer season. Airports such as Lyon and Geneva now attract more visitors in the summer than in the winter, and Chamonix is credited with more than 2 million overnight summer stays.
2. Investment in infrastructure and non-skiing related activities. Ski resorts which offer alternatives to winter activities have had significant growth in recent years.
Data released by the Notaires de France supports this, showing prices in year-round resorts with plenty of non-skiing related activities such as Chamonix and Samoëns growing steadily.

Whilst many investors of Titlis Engelberg have sold up due to the lack of snow, Greuter has held onto his, and buys up any shares that become available. Whilst others doubt the investment, it has proven to be a winner, with the stock rising 465% from the end of 2009 through to Jan 31 2017, including dividends. This produces an average annual return of 28%.

With more visitors, fewer overheads and less weather-dependent dependent tourism, summer seems to be taking over as the peak times for ski resorts. Keeping a more long-term view of the resort, Titlis Engelberg have focused on increasing summer activities to attract visitors all year-round while at the same time investing in snow-making to ensure a longer winter season. Recognising the importance of a summer clientele has proven to be successful for this resort, and with less snow-fall and rising temperatures, other resorts in the Alps would do well to follow suit. 

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