Our Industry

On five continents of the world, people engage in alpine skiing

The Global tourism industry

Tourism is one of the world’s largest industries. According to the UN World Tourism Organisation (UNWTO), which publishes statistics on global tourism, the sector accounts for around 7 percent of total global exports of goods and services. According to UNWTO, global tourism has increased by approximately 151 percent since 1995, in terms of the number of visits (tourist arrivals). Holidays, recreation and other types of leisure activities account for 55 percent of travel, while 13 percent relates to business travel and 27 percent can be attributed to visits by family and friends and travel for religious or health-related reasons.

Tourist_visits_ENG.pngIn 2017, tourist arrivals increased by 7 percent globally compared with the previous year, to 1,323 million. Turnover in the tourism industry (tourism receipts) increased by 5 percent (in fixed prices) to USD 1,340 billion. Europe is the most visited region, accounting for half of the world’s foreign visits. The most visited country is France, which attracts over 86 million visits annually. In 2017, tourist arrivals in Europe increased by 8 percent, which can be compared with North and South America for example, which saw a rise of 3 percent, and Asia and Oceania, which saw a combined increase in tourist arrivals of 6 percent. According to UNWTO’s long-term forecast, global travel is projected to rise by just over 90 percent, to 1.8 billion trips, by the year 2030. Europe is expected to experience annual growth in tourist arrivals of 2.3 percent up until 2030.

The Swedish tourism industry

Tourism is also an important industry in Sweden. Accounting for almost 3 percent of GDP and employing 175,800 people, tourism makes a significant contribution to the Swedish economy. According to the Swedish Agency for Economic and Regional Growth, total tourist consumption in Sweden has risen by 111 percent in current prices since 2000.

Tourist_consumption_ENG.pngIn 2017, total tourist consumption in Sweden increased by 7.4 percent to SEK 317 billion. Of this figure, SEK 183.5 billion refers to tourist consumption by Swedes in Sweden. Swedes’ tourist consumption, specified according to private and business travel, grew by 4.5 percent to SEK 140 billion for private travel and saw an increase of 4.9 percent to SEK 50 billion for business travel. Of total tourist consumption, SEK 134 billion refers to foreign visitors’ consumption in Sweden. The figure, which includes both private and business travellers, represents an increase of 11.4 percent compared with 2016. Since 2000, the equivalent increase is 229 percent.

The Global alpine skiing market

Alpine skiing on five continents

There are just over 2,000 alpine skiing areas in the world, and the number of skier days (one day’s downhill skiing with a SkiPass is defined as one skier day) globally has remained relatively stable at around 400 million a year, according to the 2017 International Report on Snow & Mountain Tourism. People engage in alpine skiing at organised outdoor ski resorts in 67 countries worldwide. If we then add countries with indoor arenas, the number of countries rises to around 100. 43 percent of all skier days in the world can be attributed to the Alps. Owing to this, Europe constitutes the largest alpine market, with around 200 million skier days a year. The US is the second largest market, with roughly 75 million skier days a year. The largest individual markets are France, the US and Austria, with approximately 50–55 million skier days a year each. Sweden, Norway and Finland account for roughly 17 million skier days a year. The 2017/18 winter season was a record winter for Swedish ski resorts overall. The number of skier days at Sweden’s 50 biggest ski resorts totalled almost 8.8 million and ski passes in Sweden were sold for over SEK 1.7 billion, which was an increase of 16 percent compared with the previous winter.

National and international skiers

There are an estimated 130 million skiers in the world, and the figure is set to increase in the long term. However, the number of skier days is not expected to rise at the same rate, as new skiers tend to consume fewer skier days than existing skiers. A national customer base is an important tool, as most skiers visit resorts in their own country. For most countries, the significance of international skiing guests is limited. Travel between countries is affected by factors such as size of market, transport opportunities, travel time and travel costs, as well as access to airports. Flows of international skiing guests are mainly concentrated to Europe, with Germany and the UK exporting the most skiers. The volume of inbound skiers has the most significance for countries such as Austria, where the percentage of foreign skiers is roughly 66 percent, and for Switzerland and Norway, for which the figure is around 46–47 percent. In the US and Canada, international skiers account for around 6 and 12 percent respectively. In Sweden and Finland, the proportion is approximately 15 and 17 percent respectively, according to the 2017 International Report on Snow & Mountain Tourism.

Corporate culture and ownership

The ownership structure in the global alpine market is fragmented, with many small companies.  However, the skiing industry requires high levels of capital investment, and takeovers occur. The reason is a desire to achieve economies of scale and the need to create a critical mass. Economies of scale can be achieved by coordinating purchasing, operation and maintenance, as well as in sales and marketing. Volume and sufficient cash flows are required, as investments in lifts, pistes and snowmaking systems are often sizable. Another factor fuelling acquisitions is companies’ endeavours to operate at several different geographical locations, to reduce risks and dependency on weather conditions. The listed ski resort companies Compagnie des Alpes (CDA) in France and Vail Resorts (Vail) in the US are examples of operators that have acquired several ski resorts in their home countries. Otherwise, most ski resorts in Europe and North America are privately owned or owned by public interests such as municipalities, local tourist organisations and/or local banks. Examples of companies, besides SkiStar, that own more than one ski resort in Sweden include Branäsgruppen, Norlandia and Grönklittgruppen, and in Norway, Alpinco.

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Competition

SkiStar competes for people’s disposable income. This means that, in a broader sense, SkiStar is competing with industries such as durable goods and home improvement. The travel industry competes with varying holiday offerings. In 2013,SLAO produced a report called ‘Future outdoor experiences and activities’, which illustrated that skiing competes, primarily, with travel alternatives involving sunshine, beaches, large cities, amusement parks, shopping or all-inclusive packages. In the alpine ski industry, competitors comprise other alpine resorts in Scandinavia and the Alps. However, over the years, statistics reveal that the  proportion of holidaymakers choosing to travel abroad to ski has essentially remained unchanged.

 

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