Aussie Snow Industry Calls For $1.4 Billion: Is The North American Winter in For A Wild Ride?

Rouchelle Gilmore | | Industry NewsIndustry News
winter 2020
Australian 2020 winter is in the middle of a wild ride. Credit: Perisher Facebook.

What can be learned from the season in Australia as American resorts move into plans for the northern hemisphere winter? The Australian 2020 winter has been sailing close to the rocks this season, from the COVID-19 situation, the lack of snow, and originally the bushfires. There sure have been challenges.

After the Australian 2020 bushfires, the season was always going to be a struggle. But the Snowsports Industries of Australia (SIA) has called for an Australian government $2 billion AUD ($1.4 billion USD) bailout for funding for the industry.

Some of the resorts are still turning lifts, only running at 50-per-cent capacity. While reports on whether the resorts open will be profitable are yet to be disclosed, as of July 30, 2020, Mt Buller is still running, and Mt Baw Baw (only on weekends) in Victoria, and New South Wales — Thredbo and Perisher are open.

winter 2020
Excellent Australian conditions at Thredbo in mid-July. Credit: Thredbo Facebook.

Vail-owned Mount Hotham and Falls Creek remain closed, due to border closures between states and the COVID-19 outbreak in Melbourne, until at least mid-August. They abruptly closed after a four-day-season and look unlikely to reopen for the 2020 winter. Any profitability seems doomed for the lift companies as well as all of the small businesses which support resorts.

The SIA release mentions and makes examples of the kinds of loss which has impacted small businesses that support ski areas and towns which rely on snow tourism dollars.

The snow industry in Australia contributes well over $2 billion AUD annually to the Australian economy and is one of the biggest employers in regional Australia. The industry accounts for more than 20,000 full-time jobs. While visits to Victorian alpine regions in summer equals $146 million AUD to that state’s economy. This income was significantly impacted by the bushfires the past summer.

Vail owned Perisher in 2020. Credit: Perisher Facebook.

President of SIA Edward Fortey says the Australian snow industry desperately needs assistance.

“The retailers, ski hires, bars, restaurants, lodges and other businesses employ mainly seasonal and local workers. Few if any of them are qualifying for JobKeeper or other assistance. Many businesses have zero turnover.”

JobKeeper is an Australian government scheme to help businesses through this tough economic time by helping pay wages. Yet a lot of companies are not eligible to receive help due to the seasonal nature of the industry.

For Auski, Melbourne’s biggest snow retail shop in the central business district, July is usually their busiest month. Auski’s owner Neil Ritchie expects them to be 90-per-cent down for July. Although he welcomes the Australian federal government’s recent JobKeeper announcements as it will give him some potential to retain his staff.

“We have 20 to 25 people full-time and our primary focus is to retain our key staff. Without them, we have no-one for training and buying and so on.”

For Ritchie, rent is another challenge being in the city, with high rent. He worries about the lack of overseas travel with border closures for the Australian summer, as it accounts for about 30-per-cent of annual turnover. Although he expects the number to fall to zero this year.

“Really, we’re just waiting for May 2021.”

The Australian winter has so far shown the snow industry is in trouble, with companies directly, and indirectly, at threat of going out of business. Decisions can be made quickly,  and it is likely to be a wild ride. All plans can be made in pencil not pen.

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