Spotlight: Alpine Property Market

Alpine Property Market
 
Diversifying the offer to increase demand

4 October 2016, by Paul Tostevin

With the baby boomer demographic at the upper end of skiing age, more needs to be done to attract the millennial generation

 

The Alps are the world’s largest ski market. Eighty-four percent of the biggest 44 global ski resorts, which together receive over one million visitors annually, are located in the Alps. The region benefits from a large and diverse catchment area: the surrounding European population is over 400 million people in 18 countries.

Together, Alpine resorts (large and small) account for 35% of the world resort total, capturing 43% of all global ski visits (Figure 1). At a country level, the USA is still the most visited ski destination globally with a total of 55.7 million visitors in 2014/2015 season, although France is not far behind at 55.1 million.

FIGURE 1

Global ski visitor and resort distribution

 
Figure 1

Source: Laurent Vanat

Current trends

There are several factors that affect ski visitor numbers, foremost among them are economic and meteorological conditions. There is direct evidence that visitor numbers drop during economic downturns or warm seasons with low precipitation levels. But these factors are cyclical and in the long run do not seem to have a significant impact on average visiting patterns.

Total ski visits into the top eight global markets (USA, France, Austria, Japan, Italy, Switzerland, Canada and Germany) declined by 1.6% since last year, falling from 284.6 to 280 million. Ageing populations, particularly in Europe, are taking their toll as the large baby boomer demographic is now at the upper end of skiing age and the millennial generation (age 20 to 35) has had until now, a lower propensity to ski.

The ever-growing range of leisure options for this generation is spreading the prospective market even thinner. Switzerland, worst affected by this trend, has seen ski visitor numbers decline 17% in the last decade. In order to see sustained growth in future, ski resorts are diversifying their offer to attract a higher share of younger age groups. This has meant paying more attention to their specific needs and desires.

Developing infrastructure

Generation Y, the ‘digitally connected generation’, shaped by technology but often burdened by student debt needs a ski experience relevant to them. This means more accessible teaching methods, a greater variety of activities, and accommodation geared to shorter stays.

Many resorts are now offering free access to wifi on the lifts as well as slopes. Real estate is also being tailored towards a younger demographic. In certain resorts, there has been a move away from the traditional ‘rustic’ look of hotels and lodgings, preferred by the boomer generation, toward more contemporary designs favoured by a younger consumer group.

More resorts have also focused on developing their infrastructure, catering to the more extreme variations of skiing and snowboarding. Winter X-Games type snow parks are now becoming permanent fixtures in many major global resorts.

There is an ongoing ‘flight to quality’, as resorts invest in infrastructure and facilities to compete with one another on a global stage. In North America, Vail Resorts have recently announced a merger with Whistler Blackcomb resort for $1.1bn, two premier resorts in the region.

Consolidation builds a stronger joint platform for investment and global marketing, essential in a competitive sector with a stagnant consumer base. Single operator ownership gives these resorts an edge over their European counterparts when it comes to whole-resort strategy.

Real estate investors would do well to seek out property in established, accessible resorts with a diverse non-ski offer. But, affluent yet time-poor visitors will tend to seek the most snow-reliable resorts to make maximum use of their limited leisure time. The following section aims to highlight the resorts that fulfil these criteria.

FIGURE 2

Resort fundamentals

 
Figure 2

Source: Savills World Research, Igluski, OnTheSnow

Resort conditions

To understand the depth of demand for accommodation in a resort (whether to rent or to buy), physical conditions and resort infrastructure play a key role. Season length considerations are particularly important for Alpine home owners who wish to maximise their own skiing enjoyment, rental income, or both.

The positioning of a resort to benefit from prevailing snow-bearing air movements is an important factor in season length. Resorts at lower altitudes have warmer temperatures, so powder and high quality snow consistency may not be as long-lived as in some of the higher lying resorts.

Most resorts have seasons ranging between 4-5 months, but a few exceed this. Elevation is well correlated with the average amount of snowfall. Some lower altitude resorts such as Saalbach offset this through artificial snowmaking.

High-lift resorts that stand out are St Moritz in Switzerland, Tignes in France and Sölden in Austria. Saas-Fee and Zermatt have exceptionally long ski seasons, benefitting from glacier skiing.

Geographic positioning within the Alps can also play a crucial role – as some resorts have longer seasons due to being located on or near glaciers, where snow is present all year around such as Zermatt. Here, the highest lift reaches nearly 4000m and the resort offers excellent all year around skiing conditions with guaranteed snow.

While Austrian resorts typically offer shorter ski seasons, many are well established as summer season destinations, so ski season length is only part of the story here.

 

 
St Moritz in Switzerland

▲ St Moritz in Switzerland

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Key Contacts

Yolande Barnes

Yolande Barnes

Director
World Research

Savills Margaret Street

+44 (0) 20 7409 8899

 

Paul Tostevin

Paul Tostevin

Associate Director
World Research

Savills Margaret Street

+44 (0) 20 7016 3883

 

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