Snowsport value a whiteout

17:00, Jun 06 2014

The true value of the "white dollar" to New Zealand is unknown because the Government lacks comprehensive data.

As skiers and boarders arrive in the Southern Lakes district this weekend for the start of this year's ski season, the multimillion-dollar industry lacks the means to gauge the value of snowsports to the nation's economy.

The last major economic analysis of the snow industry was in 2005 by the New Zealand Tourism Research Institute.

That study estimated the economic significance of the Southern Lakes for the season as $92.8 million, while a further $68.1m was spent elsewhere in New Zealand on transport, food and accommodation.

An estimated $50m in direct and indirect income for the regional economy was generated.

Professor Simon Milne, who wrote the 2005 report, said the economy had changed considerably during a decade that included the global financial crisis and unpredictable post-recession effects.


There were few, if any, studies of the economic impact of ski areas in the past decade.

Milne said the snowsport industry, skifields, rentals and ancillary services, were difficult to gauge.

The snowsport industry attracted high-yield customers and had a chance to piggyback on a post-recession recovery.

A decade ago the institute conservatively estimated the economic value of the Southern Lakes white dollar (spending on snowsports) as $161m.

Milne said he expected a similar figure, or higher, adjusted for inflation and other factors to apply a decade on but there had been no in-depth research since 2005.

"It's important to do this kind of research to understand what visitors are spending," Milne said.

"A lack of good information and a lack of willingness to share data, that damages the ability of the industry to show how important it is.

"When we talk about ski areas, that spending spreads throughout the country. Those downstream regional and national economic impacts are significant.

"Why don't we have an ongoing barometer of what the value of this is to the economy? We don't understand the yield or the economic dynamics."

NZSki chief executive Paul Anderson said Australians were arriving in Queenstown for the opening of Coronet Peak today.

He said an adjusted national economic benefit was likely to be many times the 2005 estimate.

NZSki general manager sales and marketing Craig Douglas said he would not be surprised if the economic benefit was $500m.

Airlines were confident this year and added seat capacity, while the May snow dump generated foreign interest in New Zealand ski areas, he said.

All of its 750 staff for Queenstown had been hired and a new lift at The Remarkables was being fine-tuned and load-tested this weekend.

"The dynamics have changed since 2005. We've had significant business out of Australia with direct flights [to Queenstown]. The Australian ski visitor, as a rule of thumb, we consider them to be worth twice as much per day as a New Zealand visitor [but the] Government sources just seem to miss skiing."

He said he was often asked how many Aussies arrived in New Zealand to ski or board, and that figure was between 80,000 and 110,000.

A Ministry of Business, Innovation and Employment spokeswoman said there were no plans for specific research into the ski industry in the Southern Lakes district.

"However, we would welcome industry, academic or local government research into it. The Government funds and makes available extensive relevant data that would help research into the economic value of the ski industry."

Overall, the tourism sector is a $24 billion industry for New Zealand and employs more than 5 per cent of the workforce.


A family shop at the forefront of the ski industry is now a global employer.

Browns Ski Shop in Queenstown opened in 1980 and is one of the longest-running rental stores in the region. The Brown family was originally from Invercargill.

Co-owner Kris Vermeir said the direct international flights marked an economic turning point for the business. When Browns opened the store they employed two staff - this season there will be 32 staff from nine countries.

"The first direct international flights coincided with ski season. If you look at how that's grown, we have regional connections and extra flights every winter," Vermeir said.

"The last three seasons have been average. We've had the recession and we had the Chilean ash cloud. The ski industry pulls in a lot of staff [to Queenstown]. There's probably 20 to 25 businesses where you can buy skiwear and probably that same number where you can rent. Our big competition is Japan, because we've had a few poor seasons."

The Southland Times