Snowsports sector 2022 - economic, social, and cultural impact: research

Executive Summary

Introduction

• This research was commissioned by the Scottish Government to explore the economic, cultural and social impact of the Scottish snowsports sector.
• The primary objectives of the research were to:
  • Produce an analysis of the economic, cultural, and social value of the Scottish snowsports sector.
  • Understand the impact of the Coronavirus (COVID-19) pandemic on the snowsports sector.
  • Consider the long-term sustainability of the snowsports sector in Scotland.
  • Recommend how the snowsports sector may be strengthened.
• The research was conducted between January and August 2022 and combined a review of existing data and research alongside primary research with snowsports operators, their customers, and other stakeholders. 38 stakeholder consultations were conducted, along with a survey of 1,530 visitors to mountain centres and artificial slopes, a club survey (10 responses), a business survey (12 responses), and a group discussion with 10 local businesses.
• It is important to note that parts of the analysis were constrained by gaps in the data provided by snowsports operators, and by challenging weather conditions affecting on-site primary research with snowsports participants. As a result, some of the data should be treated with a degree of caution.
• The research was commissioned in January 2022, and over the course of this year the funding, policy, and operating environments have continued to evolve, not least because of the impact of the cost of living crisis and additional pressures on public sector budgets.

Scotland's snowsports sector

• The Scottish snowsports sector comprises five mountain centres and 14 artificial slopes located across Scotland.
• The sector is small relative to its competitors in Europe and in growing markets such as the US and China. The sector remains heavily dependent on domestic visitors with a short and weather dependent season.
• Even prior to the pandemic there was little evidence of growth at the mountain centres. The uncertainty of the Scottish weather, combined with the low elevation of the mountain centres, results in unpredictable snowfall and a highly volatile trading environment.
• The number of visitors to the mountain centres in 2021/22 was 66% lower than in 2015/6, and 70% lower than in 2010/11, when the last economic assessments were undertaken. Late snowfall, poor weather conditions, and the COVID-19 pandemic, have all impacted on visitor numbers.
• Domestic demand for snowsports is not likely to increase in Scotland, and combined with a non-existent international visitor base, this means that the Scottish snowsports sector may become increasingly vulnerable and unsustainable.
• Demand has, however, been more stable for the artificial slopes, but there is still a mixed picture for their sustainability. For example, Snow Factor in Renfrew went into administration in November 2021, and appointed a voluntary liquidator on 7 November 2022.
• The sector has made efforts in recent years to reduce its reliance on unpredictable weather conditions by diversifying beyond snowsports.
• The sector has benefited from £7.6 million in investment between 2016 and 2022 from a range of sources, including significant investment from the Enterprise Agencies. Among other things, this funding has supported diversification, uplift infrastructure, and snow-making capability. For example, the Nevis Range Mountain experience now offers a year-round range of activities and has invested considerably in a new hotel and conference facilities to diversify their income.
• This, alongside the £7 million COVID-19 financial support provided by the Scottish Government, has undoubtedly helped and for now at least, the financial position of much of the industry appears relatively stable.
• However, most operators are concerned about the future as costs continue to rise and wider economic conditions deteriorate. The outlook over the medium-term is challenging. Recruitment and retention of staff is difficult, and the impacts of climate change are a significant threat to the future of snowsports in Scotland.
• Public finances continue to be under significant pressure, not least because of external factors such as the coronavirus (COVID-19) pandemic and cost of living crisis. The Scottish Government and Enterprise Agencies, amongst others will face tough decisions when setting investment priorities, and there will be limited scope to fund interventions that are not considered a top priority.

Economic impact

• The snowsports sector in Scotland was estimated to have generated £20.1 million of gross value added (GVA) in 2022. This is circa 2.3% of the estimated adventure tourism market as a whole in Scotland.
• This accounts for 510 full-time equivalent (FTE) jobs. This compares to 189,000 jobs in the Sustainable Tourism growth sector in 2020.
• This is a modest overall level of economic impact. Whilst it is true that 2022 cannot be considered a typical year, due to both late snowfall and the ongoing effects of the COVID-19 pandemic, snowsports has always been a relatively small sector within the overall tourism market.
• This also represents a reduction of 68% in off-site impacts when compared to the 2016 assessment. The previous assessment did not consider on-site impacts but did include the off-site impacts of non-snowsports activities at the five mountain centres.
• The calculation estimates the total net impacts of the sector. It takes account of any economic impacts that moved activity from other parts of Scotland to the snowsports sector, or that would have leaked out of Scotland. It also considers any indirect effects from expenditure by suppliers and by those employed in the sector.
• Due to data issues, it does not include the artificial slopes. Therefore, it is possible the overall sector generates a slightly higher value than estimated here, although one of artificial slopes has now closed.

Social and cultural impacts

• Snowsports participation remains dominated by higher socio-economic groups, and this lack of socio-economic diversity ultimately limits the sector's potential for wider social impact. The existing evidence base for the social impacts of snowsports is limited, but what does exist is generally positive particularly in terms of the potential for health and wellbeing benefits for the limited sector of society which participates in this sport.
• The top reason for participation in snowsports according to the research was the social and health benefits, followed by enjoyment.
• Evidence of the cultural impact of snowsports is strong in the communities that surround some of the mountain centres and should be considered as assets to be nurtured. It is displayed through the expression of shared interests and sense of valuing the natural environment and passion for outdoor activities, including snowsports.
• The snowsports sector, and in particular the mountain centres, have helped to shape the social fabric of local communities. Many people who move to or return to live in these communities have a shared passion or interest in the natural environment and for outdoor activities. These year-round natural capital cultural assets may also help to attract visitors to the area.

Impact of COVID-19

• The coronavirus (COVID-19) pandemic led to an immediate shutdown in business across the snowsports sector through the periods of lockdown and travel restrictions (2019/20 and 2020/21).
• The numbers visiting the mountain centres have not yet recovered. Demand at the artificial slopes has recovered better, now running at or above pre-pandemic levels.
• The worst of the financial impact of the pandemic was largely mitigated by government support. However, the sector faced unfavourable weather conditions in 2022 after COVID-19 funding ceased. This has constrained recovery, and all providers are forecasting significant cost pressures ahead (including fuel costs, staff costs, repairs and maintenance). Coupled with the risk of poor snow conditions in future, the outlook for the sector could be very challenging.

Future sustainability

• The long-term sustainability of the Scottish snowsports sector is challenged. This is due to:
  • Partial financial recovery from the pandemic.
  • Cost of living pressures reducing future demand.
  • Rising costs of energy, staff and essential supplies.
  • Challenges in recruiting and retaining staff because of lack of year-round employment opportunities, housing costs, and the cost of training and qualifications.
  • Unpredictable weather and variable snow conditions which will be exacerbated by climate change.

Recommendations

• The research identified a range of actions that could help build greater resilience in the snowsports sector, promote longer-term economic sustainability, and increase social and cultural value.
• The funding climate remains challenging, and it will be inherently difficult for the Scottish snowsports sector to secure the level of investment required to implement all the actions outlined below. Prioritisation of actions will be necessary.
• Success will depend on a partnership and collaborative approach between snowsports operators and key partners and agencies, including the Scottish Government, Enterprise Agencies, and Snowsport Scotland.
• The actions have been clustered under five themes: diversification; access and participation; improvement; collaboration; and staffing.
• The Scottish snowsports sector will need to play a leading role in: embracing changes required by climate emergency, prioritising the actions to diversify the sector; harnessing a partnership and collaborative approach where appropriate; and continuing to explore ways to diversify income streams to become less reliant on public funding, and to ultimately become more self-sustaining.

Diversification

• Invest in infrastructure which will make year-round access possible.
• Consider introducing new and varied activities during the year that require access to the mountains.
• Consider, where appropriate, the suitability of exploiting changes in snowsports trends, such as back country skiing.

Access and participation

• Recognising that snowsports is an expensive and seasonal activity and is never likely to be widespread, encourage the next generation of snowsports participants through programmes of snowsports activities delivered in partnership with schools, Active Schools, Snowsport Scotland, and artificial slope and mountain centre operators.
• Encourage access to existing artificial slope provision. Snowsport Scotland and other partners should consider the feasibility of this action.
• Investigate through regional Destination Management Organisations, ways of better centre integration and promotion with the wider visitor economy.
• Broaden the year-round appeal of the mountain centres to make them more inclusive, particularly in relation to socio-economic diversity.

Improvement

• Support the shift towards low carbon/ renewable energy sources.
• Replace existing uplift infrastructure, which must also be considered in the context of plans to diversify.
• Improve ancillary facilities, such as car parking, toilets and changing accommodation, and food and beverage offers. Investment in these also needs to be matched with plans to diversify facilities and activities to ensure sufficient capacity exists to accommodate future demand.
• Improve artificial slopes infrastructure to ensure that they are maintained to a high standard.
• Consider, where appropriate, further private investment to enhance snow-making on nursery/ learning slopes at the mountain centres to ensure a consistent winter offer.

Collaboration

• Develop a shared vision for the future of the snowsports sector that has strong community involvement and buy-in.
• Strengthen existing partnerships and developing new partnerships to enhance future sustainability.
• Explore opportunities for mountain centres to learn from each other.
• Improve co-ordination between emergency services, local authorities and operators to enhance customer experience and maintain access to road infrastructure.

Staffing

• Consider ways to improve recruitment and retention of staff, including collaborative approaches to on-site accommodation for staff.
• Consider succession planning.
• Develop affordable and accessible training and qualifications for key positions (such as ski instructors).
• Explore opportunities to address year-round employment challenges with local businesses, which may be improved with diversification away from solely snowsports.