SPOTLIGHT 2018 SAVILLS SKI REPORT Climate change Resilient resorts Property price index
FOREWORD
Skiing in a warmer world The ski industry faces a challenging future, but is stimulating demand by embracing new technology and being environment-aware
Climate change is affecting the winter sports industry, making conditions ‘outside the norm’ Summary increasingly the ‘norm’. From poor season starts to extreme weather conditions, skiers and snowboarders are Resilient resorts finding it harder to predict the best time to hit the slopes. High-altitude resorts Add to that an ageing population in the major source markets, and changes in the way leisure time is being such as Zermatt, Vail spent, and the outlook for ski resorts is challenging. and Saas-Fee, oer the greatest resilience against climate change. Interest in skiing from Demand shift emerging markets, such France attracts more as China, is rising fast ski visits than any other country. China has ambitions for 300 But the industry is fighting back. Unreliable ski seasons million skiers by 2030. are being countered by an increase in snowmaking, a technology that is advancing rapidly. Investments are being made to attract visitors year-round. A number of Infrastructure resorts are at the forefront of environmental campaigning. investment On the demand side, interest in skiing from key Resorts are investing emerging markets, such as China, is rising fast. In the heavily in infrastructure, west, meanwhile, new generations are discovering a ski broadening their oer experience tailored to them. With some 400 million annual ski visits worldwide, and adapting for the winter sport remains a major global industry. The ski future. resorts that serve it are home to some of the world’s most desirable residential property and established Market performance second home markets. In this report, we assess the challenges facing A wide range of buyers the industry, and identify the resorts that are best is active. Prices across placed to meet them in the years to come. the Alps have remained broadly flat, while North Paul Tostevin American resorts had Associate Director +44 (0)20 7016 3883 a strong year. [email protected]
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Savills_Ski_02-03_Foreword_v0.2.indd 2 21/11/2017 11:25 Savills_Ski_02-03_Foreword_v0.2.indd 3 21/11/2017 11:26 RESILIENT RESORTS RESILIENT RESORTS Braving the elements Climate change is a ecting ski resorts across the world. Getting wise to the challenges and building resilience is key to the future success of the industry
Skiing and winter sports are dependent on the which is an area three times the size of Texas. weather. The location of a resort, its altitude A sustained rise in temperature will put lower and average temperature all have an impact altitude resorts at greatest risk. Even if on the length of its season, and the reliability emissions are dramatically controlled today, and amount of snowfall it receives. some damage is done already. Peripheral Climate change has added uncertainty, resorts may fi nd themselves with ever shorter bringing warmer atmospheric conditions seasons and rapidly diminishing snow cover. and disrupting weather patterns. The northern Over the following pages, we look at the hemisphere, for example, has lost one million measures resorts are taking to adapt, and square miles of spring snowpack since 1970, where they feature in our resilience index.
Val d’Allos, France
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Recent years: a mixed picture Responding to the challenge Increasingly, the only consistent thing about annual snowfall is its inconsistency From new snowmaking technology to diversifying activities and environmental awareness
The Alps Shorter, more inconsistent ski Throughout the Alps, there has seasons have forced ski resorts and been below-average early season regions to adapt. The development snowfall for the last four years. of snowmaking technologies means In the run-up to the lucrative that snow-starved slopes can be Christmas season, higher topped up (assuming temperatures temperatures meant that snow are low enough), ensuring the fell as rain in low-altitude resorts. availability of skiing even when On the flip side, additional conditions are poor. Austrian resorts precipitation fell as bumper alone have invested €1 billion in amounts of snow in the highest snowmaking in the past decade. altitude, colder resorts. Val d’Isère, Resorts are doing their bit to Val Thorens and Ischgl all benefitted reduce their carbon footprint and from good early snowfall last season. their own contribution to climate Recent trends have started to change. Vail resorts, for example, change the dynamic of early season are actively managing their energy and Christmas skiing, with those usage, finding the most efficient looking for guaranteed snow ways to groom the slopes, and focusing on the highest resorts. installing solar power technology. Indoor snow slopes, traditionally found in locations without any kind of natural skiing, are now being Les Gets, France planned for ski resorts. Tignes, one of Europe’s highest resorts, plans to invest €62 million in a 400m-long indoor slope to enable skiing 365 days a year. Big ski resorts are diversifying “Californian resorts experienced exceptionally heavily into new activities. Water parks, spas, zip lines, golf and music good seasons, with Squaw Valley and Mammoth festivals help balance demand between skiers and non-skiers, seeing 158% and 174% of their usual snowfall” supporting more consistent operations throughout the year. Lobby groups are on the rise, too. Organisations such as Protect Our Mammoth North America Winters, set up by high-profile Mountain, US In contrast to the Alps, North winter-sports enthusiasts, aim to America has experienced good raise awareness of the impact of conditions in recent years, with climate change on the industry and 110% of normal snowfall recorded influence policy across party lines Zermatt, in the Pacific Northwest in 2016/17, at the highest level. Switzerland and 115% in the Northeast. Californian resorts experienced exceptionally good seasons, with Squaw Valley and Mammoth Most resilient resorts by country Based on the Savills ski conditions resilience index, overleaf seeing 158% and 174% of their usual snowfall respectively, allowing the latter to extend its season into August. While this means better skiing and longer seasons, exceptional volumes of snowfall make reaching the resorts more difficult, and bring a greater risk of avalanches. Switzerland US Italy Austria Canada France Zermatt Vail Breuil-Cervinia Obertauern Whistler Tignes Blackcomb Source Savills World Research
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Which resorts are most resilient? Introducing the metrics behind Savills ski conditions resilience index
Reduced snowpack and shortened High-altitude, low-temperature high levels of reliable snowfall, seasons take an environmental resorts top the ranking. Zermatt, rank second and fourth. and economic toll on ski resorts. a north-facing, high-altitude resort With a 3,000m base, Chile’s Our ski conditions resilience with low average temperatures Valle Nevado is the highest-ranking index (below) ranks major global and a long season (thanks also southern hemisphere resort. ski resorts using five metrics to to glacier skiing) will ensure it The most reliable, high-altitude measure the quality and reliability remains resilient in the future. resorts are, by their nature, often of a resort’s conditions, and its Other resorts in the shadow of the the hardest to reach. For investors resilience against climate change. Matterhorn, such as Saas-Fee and in ski property, there is a balance The five metrics assess snowfall, Breuil-Cervinia also score highly. to be struck between accessibility reliability, season length, altitude US resorts Vail and Aspen, at from major transport nodes and and temperature. high altitude and benefitting from the reliability and quality of skiing. Obertauern, Austria
Savills ski conditions resilience index The resorts best placed to maintain quality skiing
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Key
Snowfall: average annual snowfall, 2009-2016
Reliability: variation in snowfall
30 Season length: resort open days, 2017-18 season
Altitude: mid-point between base and summit
Temperature: average winter temperature
20 Index score
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0 Åre Vail Lech Trysil Ischgl Flaine Villars Aspen Tignes Niseko Furano Gstaad Verbier Méribel Avoriaz Nendaz Megève Morzine Wengen Zermatt St Anton St Moritz Saalbach Heavenly Saas-Fee Grimentz Kitzbühel La Plagne La Plagne Las Leñas Vemdalen Chamonix Myrkdalen Champéry Val d’Isère Mayrhofen Andermatt Courchevel Zell am See Obertauern Flims (Laax) Valle Nevado Breuil-Cervinia Davos-Klosters Crans-Montana Mont Tremblant Garmisch-Classic Grindelwald (First) Grindelwald (First) Cortina D’Ampezzo Cortina Whistler Blackcomb Val Gardena-Gröden
Source Savills World Research using OnTheSnow, Iglu Ski, national meteorological data
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Savills_Ski_04-09_resilience_v0.9.indd 8 21/11/2017 11:24 Savills_Ski_04-09_resilience_v0.10.indd 9 22/11/2017 12:52 THE WORLDWIDE SKI MARKET THE WORLDWIDE SKI MARKET
Key
V Number of ski resorts Total ski lifts Highest ski resort 1 Past Winter Olympic Games host and number of times hosted V Resilient resorts 1 How are resorts around the world investing to attract the next generation Total length of slopes New ski lifts, 2017/2018 Selected mountain ranges Future Winter Olympic Games host with established skiing of skiers? From new infrastructure and partnerships to investment to mitigate climate change, these are the world’s resilient resorts and ski regions Scandinavian Mountains
162 2,025km Climate resilience New Resorts in the colder 908 Canadian resort Scandinavian countries 5 Valemount Glacier will could be at an advantage Powder snow be a new year-round ski when it comes to global Galdhøpiggen Supercooled air from resort, home to the largest warming. Some have Sommerskisenter Siberia draws moisture vertical drop in North year-round skiing. from the Sea of Japan, America. It will be yielding plentiful dry developed to meet powder snow for Niseko resort. It is well located current-day visitor Indoor to attract Asia’s demands. snow centres middle classes. There are around 50 The Alps indoor snow centres, attracting 5% of global 1,128 Snowmaking ski visits. The world’s V largest (by area) 26,674km 2 Resorts are investing heavily in opened in Harbin, 8,242 snowmaking – 60% of China in 2017. 83 Austria’s slopes are now Rocky Mountains covered by it. European V Zermatt, manufacturers dominate: V 1 111 1 Breuil-Cervinia, V TechnoAlpin’s turnover 10 has grown 90% Valtournenche- 5,959km V since 2011. 741 V V Matterhorn V 1 1 V 2 1 V V 13 1 1 2 Japan Appalachians Pyrenees Breckenridge V Eastern 1 125 170 52 potential The Eastern 1,082km Pacifi c Coast ranges 2,939km 2,168km European and Asian 720 123 858 638 markets provide 34% of the world’s skiers, but only Winter 2 13 4 4,085km Partnerships host 24% of total ski visits, Olympic Games Yokoteyama- Vail’s purchase of 650 Beech Mountain Boí Taüll so there is room for The next hosts are Whistler allows joint domestic ski resorts PyeongChang (2018) Shibutoge 7 marketing across to grow and and Beijing (2022). Winter borders and joined-up Mammoth Mountain develop. sports participation resort strategies. As part has doubled in China of a seasonal, multi- in the last fi ve years. The resort ski pass, Untapped Games should raise weather risk Accessibility potential awareness further. is spread, too. New airline, Las Leñas, in Powdair, provides Argentina, is known direct services between for its quality dry snow. Sion airport (in the Valais National participation is ski region) and UK, low, but interest is rising, Swiss and Dutch especially with other airports, making New Zealand Alps Spanish-speaking short ski breaks regions and viable. 15 Brazil. 185km 43 1 Roundhill- Southern Andes Lake Tekapo
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704km Australian Alps 252 15 0 454km Valle Nevado 131 0 Thredbo
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Latin America o ers potential things you need The propensity to ski in the Americas is one-third that of Europe. However, in 5 Latin America, populations to know about are forecast to grow by 13% and wealth by 21% by 2030. Ski resorts China’s ambitions Today, there are around 10 million Chinese in Chile and Argentina are growing in skiers, and the sport is growing rapidly. the ski market popularity thanks to quality powder snow. The industry benefi ts from government Spanish-speaking resorts in Europe, such Skiing and winter sports attracted 400 million visitors support, with plans for 300 million skiers as El Pas de la Casa and Soldeu in Andorra, worldwide in 2016, a fi gure that has been broadly stable and 1,000 ski locations by 2030 (up from may benefi t as these skiers venture overseas. over the last decade. But what about the future? We look 650 today). Some 80% of Chinese skiers at how new generations, emerging markets and leisure are under 40, visits are short and spending are changing the shape of global demand other activities matter, such Winter Olympics as hot springs, retail and Asia’s growing role in the entertainment. global ski market will be France now attracts more enhanced by hosting the next two Winter Olympics: skiers than the United States PyeongChang in 2018 and 260 1 Beijing in 2022. Media exposure 50 54.9 54.1 and substantial infrastructure 51.3 investment will create new beacon 40 resorts, boost awareness and may The Alps: still number 1 inspire greater participation. At the heart of densely populated Western 30 32.8 Europe, the Alps attract the majority of 20 24.6 global ski visits (43%). They host the highest Markets with limited proportion of foreign visitors, and are home 10 7domestic skiing matter to nine of the top 10 most-visited resorts, The UK, Germany, and the of which La Plagne is number one. Number of annual skier visits (millions) 0 France US Austria Japan Italy Netherlands o er limited or Short and sweet no skiing themselves, but are Source 2017 International Report on Snow & Mountain Tourism 9The industry is adapting to the rise of shorter among the largest source markets globally. Visitors from visits. ONS data for the UK shows those taking trips of fi ve nights or fewer rose 109% between Demographic change is uneven these countries are important By 2030, the number of 15-54 year olds (those of most active skiing age) is forecast to foreign resorts (notably 2006 and 2016, while trips of one to three to grow by 1.6% in Switzerland, 4.6% in Norway and 5.6% in the US, but to decline the Alps). They are also more nights rose by 163%. Resorts that are close to by 11.9% in Germany, 10% in Japan, 10% in Italy, and 3.9% in Austria. Public and likely to buy a base away airports (such as Axamer Lizum, 30 minutes private initiatives and income growth may off set this. In Austria, for example, from home, driving foreign from Innsbruck airport) or accessible by train programmes have been introduced to boost participation through schools. property markets, too. (such as St Anton) are well placed to benefi t.
3Rising incomes in key emerging skier source markets may increase participation Catering to Generation Y (and Z) Forecast growth in households with incomes exceeding $35,000, 2017 to 2027 With the baby boomer generation at the upper end of skiing age, Generation Y (20-35 year olds) is growing in importance, with Generation Z (under 19s) close behind. This means 154% 72% 48% 37% 37% expanding the range of activities. Winter music festivals are China Poland Argentina Slovakia Brazil now a staple, with Snowbombing (Mayrhofen), Rise (Les Deux Source Oxford Economics 10 Alpes) and Snowboxx (Avoriaz) attracting big-name artists. 12 savills.com/research savills.com/research 13
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Who’s buying and where? Brits have historically been an important buyer Jeremy Rollason (JR) The Alps remain the world’s group in the Alps. Is Brexit having an impact? most internationally invested ski market. Spanning PT The international buyer base in the Alps is much “The volume of money eight countries, each resort is a micro market in its own broader than it was a decade ago, so Brexit’s impact has right and buyer profi les are diverse. been modest. While some British buyers have postponed Broadly speaking (and excluding the domestic markets), plans, others have actively sought non-sterling assets British buyers focus on French and Swiss resorts, the to diversify their portfolios, or are taking advantage Germans on Austria, while the Dutch, Belgians and other of a stronger euro and are selling to repatriate funds. being invested in northern European countries make up the international balance across the region. Russians are declining in There are many challenges facing the infl uence in the top Swiss and French resorts, off set, industry, how are resorts responding? somewhat, by growing (but still extremely low) JR The volume of money being invested in new projects demand from Asia. and infrastructure is testament to confi dence in the infrastructure is future of the mountain economy. Crans-Montana, for How have recent political events in example, is now actively promoting itself as a ‘city in the Europe a ected Alpine resort markets? mountains’, with dual-season activities, new restaurants Paul Tostevin (PT) Alpine ski resorts are characterised by and a recently opened British International boarding testament to confi dence low transaction volumes and are slower to feel the impact school. Courchevel recently opened Aquamotion, a of external factors than high-turnover, urban markets. €65 million indoor watersports centre; Val d’Isère However, wider events still have infl uence. In France, is to build a €200 million hotel, retail and the Macron government has boosted sentiment, fuelling commercial centre, while Verbier activity, with both French and foreign buyers now more in the future” confi dent to make a move. The wider Italian residential market is entering a period of stability, while new tax incentives, introduced to attract wealthy individuals, Paul Tostevin, Associate Director, Savills World Research, and could impact positively on the major Italian resorts. Jeremy Rollason, Director, Savills Ski, assess residential market performance, drivers and prospects across the Alps and beyond
Méribel, France
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is benefitting from extensive investment from global How do North American resorts compare? Ultra prime top 10 Global ski resort prime price league Prime residential price hotel brands. New lift investment is particularly PT North American resorts are highly domestic in Price (per sq m) in the (per sq m). Represents asking prices of resale property concentrated in the Alps, too (see map, p10-11). their buyer profiles. A bull run in Canada’s national most exclusive resorts From a property perspective, planning consent for real-estate markets appears to be slowing (at least St Moritz 1 €21,100 development of all sizes is increasingly difficult to obtain in major cities) following the introduction of cooling Verbier 2 across the Alps. Macro policies, such as Lex Weber in measures. But supply/demand imbalances continue Switzerland, will help to address the recent supply/ to fuel growth in resorts such as Whistler Blackcomb. Courchevel 1850 demand imbalance in the medium to long term, as will In the US, also enjoying a strong run, established, € , Val d’Isère zoning controls in the French and Austrian Alps. low-supply resorts such as Vail have seen annual St Moritz Aspen price growth of 10%. What about income potential? Grindelwald JR Alpine ski property typically yields between 1.5% Are there any resorts we should be watching? Vail 3 and 2.5% net, and the majority of ski property owners JR Scandinavian resorts, such as Myrkdalen in look to rent out simply to cover costs. Leaseback schemes Norway, have flown under the radar of international € , Crans-Montana are another option, providing freehold purchase with buyers for many years. They are now rising in Courchevel 1850 Courchevel a discounted purchase price. First favoured in French prominence, thanks, in part, to the quality conditions resorts in the 1980s, such schemes are popular with on offer. Usually colder, or with more snowfall than Zermatt investors with smaller budgets looking to offset their their Alpine counterparts, they may be a good hedge Megève annual borrowing costs from income. against climate change. Cortina D’Ampezzo The leaseback model has spread to the Austrian Alps, The established resorts should not be overlooked, € where yields tend to be higher, and, most recently, however, as they are investing most and already have Aspen Méribel to Switzerland. Here, it is now particularly valuable the best skiing infrastructure. Large resorts, such Andermatt as it bypasses the Lex Weber classification of second as Verbier, Saalbach and Chamonix, have global homes. Net yields are around 2.25%. reputations and benefit from a broad visitor reach. Gstaad €, Kitzbühel Verbier Lech St Anton
Chamonix 4 € , Tignes Val d’Isère Val Gardena-Gröden Klosters Flims (Laax) 1 St Moritz A stable, low- Davos transaction market. €, Villars Wealthy property Zermatt owners hold for the Champéry long term Niseko 2 Wengen Verbier A chronic shortage €, Saas-Fee of new development Vail Nendaz sites following planning changes Ischgl will support its Grimentz premium pricing
Whistler Blackcomb € , 3 Vail Gstaad Saalbach Low supply and Breuil-Cervinia strong domestic demand has pushed Zell am See up prices by 10% in €, Mayrhofen the last year Morzine Crans-Montana 4 Chamonix Sölden Brexit has slowed demand among Brits, La Rosière but low interest rates Garmisch-Classic have spurred the €, Bad Gastein domestic market Grindelwald Mont Blanc, €0 €5,000 €10,000 €15,000 €20,000 France Source Savills World Research Source Savills World Research Note Exchange rates as at October 2017
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Looking ahead Identifying the trends and destinations that will shape the winter sport industry
Open to change Future proofing Active buyers New markets Beyond ski Ski resorts are facing Residential product Although property Emerging middle Top-tier resorts in the challenges and developed today is values in the Alps classes in Eastern Europe and North adapting, whether it increasingly aligned are broadly flat, Europe, Latin America, America have a cachet be to climate change, to future occupier buyer activity from China and other Asian and non-ski oering demographic shifts, demand. Models such both domestic nations are the skiers that makes them more or the new patterns as leaseback will and foreign buyers of tomorrow and may than simply winter in ski consumption. help drive the market remains strong. oset a decline in some sports destinations. in Switzerland. mature source markets.
Verbier, Switzerland
Savills World Research We monitor global real-estate markets and the forces that shape them. Working with our teams across the globe, and drawing on market intelligence and published data, we produce a range of market-leading publications, as well as providing bespoke research services to our clients. About Savills Ski Long-established local knowledge and expertise makes Savills World Research a leading agent in the rental, sale and acquisition of Alpine property Yolande Barnes Paul Tostevin Anh Nguyen Director Associate Director Analyst With 30 years of combined experience in key Alpine France’s premier Alpine resort. From here, we have +44 (0)20 7409 8899 +44 (0)20 7016 3883 +44 (0)20 7877 4541 resorts across France, Switzerland, Austria and unrivalled coverage of 1850 as well as 1650 and 1550. [email protected] [email protected] [email protected] Italy, Savills Ski provides a wide range of services A second Savills office in Méribel, covers Méribel, in a number of prime ski resorts. La Tania and Le Praz. Working either from offices in Courchevel and Swiss Alps Savills Ski covers the majority of the Savills Ski Méribel, or with preferred partners, Savills Ski is French-speaking cantons in Switzerland. These Jeremy Rollason Guy Murdoch well positioned to provide clients and buyers with include Verbier and The Four Valleys, Crans-Montana, Director Associate valuation and purchase advice, as well as development Villars and the Gstaad Valley. We also operate in +44 (0)20 7016 3753 +44 (0)203 428 2949 consultation and expertise in the rental market. other prime resorts, such as Zermatt and St Moritz. [email protected] [email protected] Drawing on industry-leading Alpine research Austrian Alps Savills Ski provides client services from Savills Research, Savills Ski offers a complete in selected resorts across Salzburgerland, Carinthia and objective service for private vendor clients, and the Tyrol. Savills plc: Savills is a leading global real estate service provider listed on the London Stock Exchange. The company was established in 1855 and has a rich developers and investors. Italian Alps Savills Ski can provide services in heritage with unrivalled growth. It is a company that leads rather than follows, and now has more than 700 oces and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. This report is for general informative purposes only. It may not be published, reproduced or quoted, in part or French Alps With an office in the centre of selected Italian ski resorts, through its experience in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every eort has been made Courchevel 1850, Savills Ski is at the heart of and knowledge of working in this region. to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills Research.
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