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

5. Economic impact

Key findings

The Economic Impact Assessment (EIA) estimates that the snowsports sector in Scotland generates (2022):

● £15.3 million in net wages.

● £20.1 million in net Gross Value Added (GVA).

● 510 net full-time equivalent (FTE) jobs.

On a like for like basis, there has been a reduction of 68% in the economic impact created by visitor spend (£5.2 million in net GVA) when compared to the 2016 assessment. The number of visitors to the mountain centres in 2022 was 66% lower than in 2016.

It should be noted that there is an element of uncertainty surrounding these figures due to the data collection issues outlined in Chapter 1.

The snowsports sector in Scotland plays a role in the economic growth and visitor economy by supporting jobs in rural (and urban) communities, supporting employment across the supply chain, attracting more people to the areas where the network of mountain centres and artificial slopes are located, and encouraging visitor dwell time and spend.

5.1 Introduction

An EIA has been undertaken to estimate the economic contribution that the snowsports sector makes to the Scottish economy. This has been measured in three ways:

• GVA, which measures the overall contribution to the economy^[10].
• The total level of wages paid to employees in the sector and employees of businesses supported by the sector.
• FTE jobs supported by the sector. This is the level of employment equivalent to one full-time position, defined as 35 hours per week. This could be a single full-time position, or several part-time or seasonal positions.

The economic impact has been calculated from two sources:

• The on-site impact of employment at Scottish snowsports facilities, gathered through stakeholder consultation undertaken as part of this research.
• The off-site impact of visitor spend in local economies in and around snowsports facilities, gathered through a visitor survey.

5.2 On-site employment impacts

On-site employment data was gathered through consultation with the snowsports centres, with employment categorised as full-time, part-time, and seasonal.

There were some significant data gaps with regards to the artificial slopes, so indicative employment was estimated based on data provided by four venues. Furthermore, three venues were multi-use outdoor facilities and the data provided could not be disaggregated by function. We have therefore estimated that 10% of employment at these sites was snowsports related.

Table 5-1 outlines the levels of employment at each snowsports centre. Levels of employment have been converted to FTE. To convert to FTE we have assumed that each part-time position will be half of a full-time position, and that each seasonal position is a full-time position for one-quarter of the year (as in, one-quarter of an FTE).

Table 5-1: Employment by snowsports site

Venue	Type	Full- time	Part- time	Seasonal	FTE jobs
Cairngorm	Mountain Centre	34	6	50	50
Glenshee	Mountain Centre	14	2	40	25
Glencoe	Mountain Centre	23	19	40	43
The Lecht	Mountain Centre	7	0	16	11
Nevis Range*	Mountain Centre	40	6	50	56
Aberdeen Snowsports Centre	Dry Ski Slope	9	2	58	25
Alford Ski Centre	Dry Ski Slope	1	9	2	6
Bearsden Ski and Board Club*	Dry Ski Slope	9	2	58	25
Firpark Ski Centre*	Dry Ski Slope	1	9	2	6
Glasgow Ski & Snowboard Centre*	Dry Ski Slope	9	2	58	25
Glenmore Lodge*	Multi-use outdoor facility	3.5	3.5	10	8
Huntly Nordic and Outdoors Centre*	Dry Ski Slope	4	39	0	24
Lagganlia Outdoor Centre*	Multi-use outdoor facility	3.5	3.5	10	8
Loch Insh*	Multi-use outdoor facility	3.5	3.5	10	8
Midlothian Snowsports Centre – Hillend	Dry Ski Slope	14	73	0	51
Newmilns Snow and Sports Complex	Dry Ski Slope	4	39	0	24
Polmonthill Snowsports Centre*	Dry Ski Slope	1	9	2	6
RM-Condor, Arbroath	Dry Ski Slope	1	1	2	2
Snow Factor*	Indoor Ski Slope	14	73	0	51
Total		196	302	408	448

Note: Facilities marked * have had their employment levels estimated due to a lack of data return

Wages and GVA coefficients

Wages and GVA were estimated using coefficients from Scottish Annual Business Statistics (SABS). These coefficients were estimated by comparing the total GVA in the sector by the number of FTE jobs in the sector. This provides an estimate of the level of GVA and wages generated through one job in the sector.

The sector used was Sports Activities and Amusement and Recreation Activities, and after adjusting for FTE employment and inflation, equates to £36,000 in wages per FTE and £44,000 in GVA per FTE.

Gross impacts

Applying these coefficients to the employment data results in gross on-site employment impacts as outlined in Table 5-2.

Table 5-2: Gross on-site employment impacts

FTE jobs	Wages	GVA
448	£16.1m	£19.6m

Net impacts^[11]

Before we can establish the economic impact of the snowsports centres, it is first necessary to adjust from gross impacts to net impacts.

This means estimating the additional jobs, wages, and GVA in Scotland that would not happen in the absence of these venues.

This means we need to consider additionality factors to determine the 'true' economic impact. These factors are displacement, leakage, and multipliers.

Displacement

Displacement is the extent to which activity under consideration will reduce activity elsewhere in the target area.

For example, opening a new snowsports facility will likely lead to new people becoming involved in snowsports. However, it is also likely that some skiers will use the new facility at the expense of other facilities, thus 'displacing' activity from other snowsports facilities. Therefore, the economic activity generated by the new facility will lead to a reduction in economic activity at other facilities.

For operational impacts of the snowsports sector in Scotland, displacement is considered as medium as it is likely that many tourists would holiday elsewhere in Scotland in the absence of the centres. Our visitor survey found that around 30% of respondents would continue to holiday in Scotland in the absence of snowsports facilities. Furthermore, the local labour which snowsports facilities make use of would otherwise be used in other local industries.

Leakage

Leakage relates to the residence of the businesses/employees and estimates the proportion that will occur outwith the defined spatial area – in this case Scotland. For example, a person who lives in Carlisle, but works in Dumfries, would have a significant level of leakage from Scotland as much of their spending would take place in England.

For the snowsports sector, leakage was considered to be extremely low as it is likely that the vast majority, if not all, employees will be resident in Scotland. There may be some limited leakage from seasonal workers who are resident outside of Scotland in the off-season, although we lack specific data on this.

Multipliers

Multipliers relate to the impact of new business and employee spend that occurs because of the activity through additional income, supplier purchases, and longer-term effects.

Spend on wages and suppliers will have knock on effects on the economy as suppliers and staff will then spend their income in the local economy, generating further economic activity.

Type 2 Multipliers are available at the Scottish level from Scottish Government Input-Output Tables based on the relevant sector, in this case, Sport and Recreation.

Summary details of additionality factors can be found in Table 5-3.

Table 5-3: Additionality factors

Additionality factor	Additionality
Displacement	50%
Leakage	5%
Multiplier	1.60

Applying these additionality factors to the gross impacts results in net impacts as outlined in Table 5-4.

Table 5-4: Net on-site economic impacts

FTE jobs	Wages	GVA
340	£12.3m	£14.9m

5.3 Off-site impacts

Off-site impacts are based on data provided by visitors to snowsports venues during the 2022 season. The original aim was to gather a total of 1,000 face-to-face interviews across the five mountain centres and an additional 400 at the artificial slopes.

However, several issues prevented these targets being met, with only 342 interviews being undertaken at the mountain centres and 29 at the artificial slopes. For the mountain centres, this was largely due to Scottish Government COVID-19 guidance which required interviews above a certain number to take place outdoors. A combination of poor weather conditions (high winds, snow) and centres being closed due to lack of sustainable snow, prevented additional face-to-face interviews being achieved. For the artificial slopes, a poor response from operators meant that the number of interviewer days were extremely limited.

Due to the low number of face-to-face interviews completed, the mountain centres distributed an online survey and hard copy self-completion questionnaires on-site. A total of 1,530 responses were received across all survey methods. There were less than 50 responses from visitors to artificial slopes in total which is too few for a robust EIA to be undertaken at this level. These responses have therefore been excluded from the off-site impacts analysis.

It should be noted that the use of online surveys and self-completion questionnaires are generally not recommended for conducting EIA, primarily due to issues with the respondent profile. The use of face-to-face/in-person interviews allows for a random selection of visitors, while online and self-completion methods are inherently self-selecting. We discuss how this was dealt with in further detail below.

Gross impacts

Total spend reported by visitor survey respondents was £292,670, Table 5-5.

Table 5-5: Total spend

Spend category	Total spend
Accommodation	£146,055
Food	£47,570
Transport	£32,594
Drink	£18,842
Shopping	£14,826
Equipment hire	£13,375
Other	£12,337
Entertainment	£7,071

N=1,481

These figures have been broken down by visitor segment, (by snowsports centre visited, whether there was an overnight stay and place of residence) and then divided by the total number of survey responses received from that segment.

For example, there was a total spend of £9,958 by day visitors to Glencoe resident in Scotland and there was a total of 212 survey returns from this visitor segment. This equates to an average spend £47.

Average spend of visitors by centre and visitor origin are presented in Table 5-6.

Table 5-6: Average spend by centre and visitors' origin

	Day visitors		Overnight visitors
	Scotland	Rest of UK	Scotland	Rest of UK	Outside UK
Nevis	£33	-	£352	£345	£323
Lecht	£57	£45	£458	£849	-
Glenshee	£51	£75	£412	£654	£641
Glencoe	£47	£59	£297	£506	-
Cairngorm	£29	£90	£433	£567	£936

N=1,481

It should be noted that there were clear outliers from some visitor segments, specifically Nevis Range day visitors from the rest of the UK and Glencoe overnight visitors from outside the UK. This was due to only gaining a single response in these visitor segments.

In these cases, these visitor segments have not been grossed up separately, with figures added to the next most appropriate visitor segment.

Grossed up impacts

The impacts are grossed up to the total visitor population which has been provided by the snowsports centres for 2021/22. Grossing up refers to the process of applying the impacts derived from the survey respondents to the entire visitor population.

This is calculated based on the inverse of the proportion responding to the survey (e.g., a response rate of 1% generates a grossing up factor of 100%/1% = 100). Therefore, if the survey sample has an impact of £100, grossing up will result in a total impact of £100 x 100 = £10,000.

Total visitor numbers are presented in Table 5-7. The proportion of day and overnight visitors was derived from the visitor survey returns. For these estimates we have only used data from face-to-face interviews as they are more representative of the visitor population.

Table 5-7: Total visitors

	Total visitors	% Day	% Overnight	Day visitors	Overnight visitors
Nevis Range	6,400	75%	25%	4,773	1,627
Lecht	16,063	85%	15%	13,574	2,489
Glenshee	35,557	86%	14%	30,668	4,889
Glencoe	16,077	85%	15%	13,586	2,491
Cairngorm	15,376	60%	40%	9,155	6,221
Total	89,473	-	-	71,757	17,716

Individual visitor segments by snowsports centre are grossed up separately and summed, as in, day visitors and overnight visitors are grossed up separately for each snowsports centre. The number of visitor survey respondents, total visitor population, grossing up factors and total visitor spend for each snowsports centre can be found in Table 5-8.

It is notable that that around 70% of gross spend is accounted for by overnight visitors, who make up only 20% of total visitors. This indicates that local economic impact is primarily driven by overnight visitors.

Table 5-8: Grossing up factors

	Visitor segment	Number of survey respondents	Visitor population	Grossing up factor	Total spend
Nevis Range	Day	67	4,773	71	£0.2m
	Overnight	64	1,627	25	£0.6m
Lecht	Day	94	13,574	144	£0.8m
	Overnight	33	2,489	75	£1.7m
Glenshee	Day	316	30,668	97	£1.6m
	Overnight	124	4,889	39	£2.5m
Glencoe	Day	224	13,586	61	£0.6m
	Overnight	136	2,491	18	£0.9m
Cairngorm	Day	242	9,155	38	£0.3m
	Overnight	183	6,221	34	£3.1m
Total	Day	943	71,757	-	£3.4m
	Overnight	540	17,716	-	£8.8m

After grossing up to the total visitor population, total gross visitor spend is £12.2 million. It should be noted that visitor numbers are solely presented for snowsports visitors, as there was insufficient data returned to include non-snowsports visitors.

Net impacts

As with the on-site employment impacts, net impacts are derived by adjusting for displacement, leakage, and multiplier effects. Displacement was judged on the following:

• How important snowsports was to their visit to the snowsports centre. The higher the level of importance, the lower the level of displacement.
• What they would have done in the absence of their visit to the snowsports centre. Respondents who would have stayed home or would have visited somewhere else outside of Scotland were judged to have zero displacement. Whereas those who would have visited elsewhere in Scotland were judged to fully displace activity from elsewhere in Scotland.

Based on these responses we have assumed the levels of displacement as set out in Table 5-9.

Table 5-9: Displacement

	Day visitors		Overnight visitors
	Scotland	Rest of UK	Scotland	Rest of UK	Outside UK
Nevis	66%	-	58%	56%	29%
Lecht	33%	0%	38%	37%	-
Glenshee	37%	0%	41%	36%	56%
Glencoe	36%	18%	38%	43%	-
Cairngorm	51%	58%	52%	54%	59%
Average	43%	37%	45%	46%	53%

Leakage was judged to be zero, as impact questions were specifically about spend that took place within Scotland.

Multipliers are taken from the Scottish Input/Output tables. For day spend, the average multiplier for Sport and Recreation, Food and Beverage activities, and Retail of 1.53 was used. For accommodation spend, the Accommodation multiplier of 1.47 was used.

Applying these displacement, leakage and multiplier factors to the gross spend of £12.2 million gives a net overall spend of £10.2 million.

GVA, wages and jobs

Estimating GVA, wages and jobs requires us again to use coefficients from SABS. SABS present a variety of statistics for each industry in Scotland including employment, turnover, GVA and wages. Using these statistics, we can estimate GVA, wages and employment, visitor spend (turnover).

This is calculated separately for accommodation and non-accommodation spend due to the different sectors involved.

Coefficients for day spend and overnight accommodation spend are presented in Table 5-10.

Table 5-10: Impact coefficients

	Spend to GVA ratio	Spend to wages ratio	GVA to job ratio
Non-accommodation spend	44%	29%	£31,000
Accommodation spend	61%	30%	£30,800

Applying these coefficients equates to total economic impacts related to off-site expenditure, as shown in Table 5-11.

Table 5-11: Off-site visitor spend net economic impacts

	Net spend	Net GVA	Net wages	Net FTE jobs
Non-accommodation spend	£6.2m	£2.7m	£1.8m	90
Accommodation spend	£4.1m	£2.5m	£1.2m	80
Total	£10.2m	£5.2m	£3m	170

5.4 Total economic impacts

Total economic impacts combining on-site and off-site impacts are presented in Table 5-12.

Table 5-12: Total economic impacts

	FTE jobs	Wages	GVA
Onsite employment	340	£12.3m	£14.9m
Off-site visitor spend	170	£3m	£5.2m
Total	510	£15.3m	£20.1m

5.5 Comparison with other sources

Comparing these results with the 2011 and 2016 studies suggests a significant downturn in economic value, due mainly to the lower number of visitors to the mountain centres. 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. Comparable figures also indicate a 68% reduction in economic impact from 2016.

However, there are some important methodological differences to note to make meaningful comparisons. Firstly, the 2016 report does not include the GVA impact of on-site employment. Therefore, only the £5.2 million GVA impact of off-site visitor spend in this report (2022) can be considered comparable to the £14.2 million impact for snowsports visitors in the 2016 assessment. This represents a reduction of 63% in economic impact.

However, if we adjust the 2016 impact to 2022 prices, this equates to a GVA impact of £16.3 million, a reduction of 68%. However, the 2016 report includes snowsports and non-snowsports visitors to the five major snowsports centres. For the 2022 report, we have not included non-snowsports visitors as there was insufficient data returns from the centre operators.

The reduced level of impact is largely attributable to the 66% reduction in total snowsports visitor numbers to the five snowsports centres since 2015/16. There are, of course, some reasons for the differences in visitor numbers between the two reporting periods which would account for at least some of this. This includes the continued closure of the funicular railway at Cairngorm, the late arrival of snow, and the higher number of days lost due to high winds and poor weather conditions. The fieldwork was also conducted at a time when many may still have been reluctant to travel due to perceived COVID-19 risks.

With these caveats in mind and considering the 66% reduction in visitors and the 68% reduction in impacts, the centres are in fact delivering a broadly similar average impact per visitor. However, the primary driver of their economic contribution is the number of visitors which is, in turn, substantially dictated by the weather conditions.

In terms of job contribution, according to a recent Growth Sector briefing, employment in the Sustainable Tourism growth sector stood at 189,000 in 2020, accounting for 7.4% of employment in Scotland. Employment in the snowsports sector therefore represents a very small proportion of tourism employment overall in Scotland.

5.6 Conclusions

The snowsports sector in Scotland was estimated to have generated £20.1 million net GVA in 2022 and £15.3 million in net wages, accounting for 510 FTE jobs.

This has been estimated in two ways: on-site employment impacts derived from consultation with snowsports centres and off-site visitor impacts derived from a visitor survey. Compared to previous studies on a like for like basis, this represents a 68% reduction in economic impacts. This is largely due to the number of visitors to the mountain centres in 2022 being 41% lower than in 2016.

The snowsports sector continues to play a role in the economic growth and visitor economy by supporting jobs in rural communities, supporting employment across the supply chain, attracting more people to the areas where the network of mountain centres and artificial slopes are located, and encouraging visitor dwell time and spend.