Changing Consumer Demographics in the Ski Industry CAST Meeting Durango, CO 8/29/14
A Brief Industry Overview
Skier/Snowboarder Visits (in millions) U.S. and Canadian Skier/Snowboarder Visits: 1996/97 to 2013/14 90.00 80.00 70.00 60.00 68.6 69.7 69.5 69.6 16.1 15.5 17.4 17.4 75.9 18.6 73.3 18.9 76.5 76.2 74.9 18.9 19.1 18.0 77.5 18.6 73.8 18.7 80.8 20.3 75.7 18.3 77.9 79.4 18.1 18.9 68.7 17.7 75.5 74.2 18.6 18.0 50.00 40.00 30.00 52.5 54.1 52.1 52.2 57.3 54.4 57.6 57.1 56.9 58.9 55.1 60.5 57.4 59.8 60.5 51.0 56.9 56.2 20.00 10.00 Canada U.S. North American Skier/Snowboarder Visits (excludes Nordi & Heli) 0.00 Season
Total Active Participants: 1996/97 to 2013/14
Estimated Market Size for Downhill Snow Sports in the U.S. 3.2% of population 10,000,000 ACTIVE 6.3% of population 20,000,000 LAPSED 18% of population 56,800,000 315,200,000 Socio-Economic Match
THE MODEL FOR GROWTH Beginner Drop- Out Never Been Annual Growth in Trial Core Revival Lapsed
THE MODEL 1999/2000 Beginner 10% 85% Drop- Out 15% Never Been Annual Growth in Trial=0.0% Core 65% 25% Revival 25% 20% 75% 0% Lapsed
Number of First Time Participants: 1996/97 to 2013/14
THE MODEL 2012/2013 Beginner 8% 83% Drop- Out 17% Never Been Annual Growth in Trial=-3.3% Core 65% 25% Revival 27% 27% 75% -1.7% Lapsed
Visits Visitation Projections from 2013/14 through 2029/30: Decline vs. Growth 80 70 60 57.1 56.9 56.8 56.8 56.9 57.0 57.2 57.5 58.0 58.5 59.1 59.9 60.8 61.8 63.0 64.1 65.4 50 57.1 56.2 55.3 54.4 53.6 52.8 52.0 51.2 50.5 49.8 49.0 48.4 47.7 47.1 46.5 45.9 45.3 40 30 20-3% Decline in Trial 6% Growth in Trial / 0.2% Improvement in Conversion 10 0
Trial Goals Translated On average we see about 1,000,000 first timers in any given season. Based on a 6% growth in trial we would like to see an additional 60,000 first timers on the slopes.
Trends of Note Significant generational differences in participation patterns Slow growth in building diversity Income inequality, the aging of wealth, and the affordability factor Significant gender differences in participation levels Climate change reduces length and predictability of the season The need to capitalize on summer
Generational Differences
Percent of Visits Percent of Visits by Single Year of Age: 2012/13 vs. 2002/03 3.5% 3.0% 2012/13 2002/03 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 Single Year of Age
The Greatest Generation: Born prior to 1928. Currently age 87 and over. 1.3% of population.
The Silent Generation: Born between 1928 and 1945. Currently age 69 to 86. 9% of population
The Baby Boomer: Born between 1946 and 1964. Currently age 50 to 68. 23% of population.
Generation X: Born between 1965 and 1980. Currently age 34 to 49. 21% of population.
Millennials: Born after 1980. Currently age 33 and under. 18-33 year olds are 22% of population.
The Birth of the Teenager in the 20 th Century
The 21 st Century Brings the Concept of the Emerging Adult Five Milestones: Completing School Leaving Home Becoming Financially Independent Marrying Having a Child In 1960 about 77% of women and 65% of men had achieved all 5 by age 30. In 2000 about 50% of women and about 33% of men had done all five by age 30.
Percent Indicating Place Their Cell Phone On or Right Next to Their Bed When Sleeping Millenials 83% Gen X 68% Baby Boomer 50% Silent Generation 20% Percent Who Sleep With Cell Phone 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percent Responding
Percent of Adults Living Alone by Gender and Age: 1850-2010 More adults live alone than at any point in human history. In Atlanta, Denver, Seattle, San Francisco and Minneapolis - 40 percent or more of all households contain a single occupant. Sources: Analysis by Susan Weber and Andrew Beveridge, Queens College, CUNY, from historical and current census data
Diminished Value of Ownership and the Rise of the Sharing Economy
Total U.S. Snow Sports Participants by Cohort: 1996/97 to 2013/14
Total U.S. Snow Sports Participants by Cohort: 1996/97 to 2013/14
Percent of Participants Percent of Total U.S. Participants by Cohort: 1996/97 to 2012/13 Percent Millenial to GenX Percent Boom & Pre-Boom 78.8% 79.1% 75.9% 77.3% 77.3% 71.0% 72.8% 74.0% 69.1% 65.8% 65.4% 66.8% 67.5% 63.1% 60.3% 58.0% 55.3% 44.7% 42.0% 39.7% 36.9% 34.2% 34.6% 33.2% 32.5% 30.9% 29.0% 27.2% 26.0% 24.1% 22.7% 21.2% 20.9% 22.7% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Size of Group Number of 18 to 39 Year Old Coloradans vs. 18 to 39 Year Old Colorado Skiers/Snowboarders: 1996/97 to 2012/13 1,800,000 1,600,000 1,400,000 1,200,000 18 to 39 Year Old Colorado Skiers/Snowboarders 18 to 39 Year Old Coloradans 1,000,000 800,000 600,000 400,000 200,000 -
Is Resort Product in Alignment with Millennial Needs?
Growing Diversity
Percent Non-White Percent Non-White by Single Year of Age 70% 60% 2014 2040 50% 40% 30% 20% 10% 0% 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 Single Year of Age
Percent Non-White Percent Non-White in 2012 Population vs. 2012/13 Skier/Snowboarder Population by Single Year of Age 50% 45% 5 per. Mov. Avg. (Percent Non-White in Population) 5 per. Mov. Avg. (Percent Non-White in Skier/Snowboarder Population) 40% 35% 30% 25% 20% 15% 10% 5% 20-40 0% 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 Single Year of Age
Income Inequality and the Aging of Wealth
Income Inequality and the Aging of Wealth
Average Net Worth by Age and Year
Change in Net Worth by Age Group: 1983 to 2010 Source: http://www.urban.org/uploadedpdf/412766-lost-generations-wealth-building-among-young-americans.pdf
Lack of Economic Mobility by Geographic Region
Percent Responding Percent of Visits Accounted for by Household Income Category: 2007/08 to 2012/13 35% 30% 25% 30% 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 27% 25% 25% 24% 31% 20% 18% 19% 15% 10% 5% 0% Under $50,000 $50,000 - $99,999 $100,000 - $149,999 $150,00 or above Household Income Category
Average Lift Ticket Price (weekend) $100.00 U.S. Average Adult Lift Ticket Price (weekend): 2001/02 to 2013/14 $93.33 $90.00 $80.00 $70.00 $60.00 $50.00 $48.49 $53.34 $55.11 $58.96 $61.99 $66.13 $68.90 $72.28 $73.11 $76.89 $82.07 $86.17 $40.00 $30.00 $20.00 $10.00 $- Avg. Season Pass Price: 2000/01 = $625 2012/13 = $717 Avg. Lift Ticket Price (weekend)
Gender Differences in Participation
Percent of Visits HIGH RISK ZONE 100% Visits Accounted for by Gender and Single Year of Age: 2010/11 to 2012/13 Average 90% Male Female 80% 70% 60% 50% 40% 30% 20% 42-50 10% 0% 4 8 12 16 20 24 28 32 36 40 44 48 52 56 60 64 68 72 76 80 Single Year of Age
Snowboarding Trending Down Share of visits from snowboarders dropped to 26.6% in 2013/14, down from 30.6% in 2010/11 Decline seen in all regions and all size ski areas Most pronounced drop in Pacific South (down 10 percentage points in 3 years)
Average Days Skied/Snowboarded 8.0 7.5 7.0 6.5 7.6 Average Days Skied or Snowboarded: 1996/97 to 2012/13 7.1 7.1 7.0 7.0 6.6 6.6 6.7 6.4 6.5 6.5 Average Days for Snowboarders Average Days for Skiers 6.2 6.1 6.1 6.1 6.1 5.9 6.0 5.5 5.0 5.5 5.4 5.6 5.5 5.6 5.5 5.6 5.6 5.6 5.6 5.7 5.5 5.4 5.5 5.5 5.7 5.5 4.5 4.0
Percent of Participants Gender Ratios for Snowboarding Participants: 1996/97 to 2011/12 64% 63% 63% 63% 62% 62% 62% 62% 62% 61% 62% 61% 61% 62% 62% 65% 70% 60% 50% 36% 37% 37% 37% 38% 38% 38% 38% 38% 39% 38% 39% 39% 38% 38% 35% 40% 30% Male Female 20% 10% 0%
Climate Change
Projected Change in Colorado River Basin Snowpack Source: 2008, Climate Change in Colorado: A Synthesis to Support Water Resources Management and Adaptation
Rising Importance of Summer
Rising Importance of Summer 10M 26M
What happens when we lose our edge with regards to unique product and high barriers to entry?
And what if our customer base isn t as dedicated or engaged with the product offerings we can successfully monetize?
Average Rating of Amenity's Financial Success Alpine Slide Water Park Mountain Coaster Zip-line/ Canopy Tour Ropes/Challenge Course Weddings/Meetings/Fa Bungee Scenic Lift Rides Climbing Wall Adventure Races Mini Golf Festivals/Concerts Downhill Mountain Biking Golf Hiking Mountain Biking (XC) Disc Golf Geocaching 4.3 4.2 4.5 5.0 5.3 5.5 6.3 6.2 6.2 6.0 5.9 7.4 7.2 7.0 7.0 9.1 8.8 8.7 Average 1 2 3 4 5 6 7 8 9 10 Average Rating (1="Not at All Successful"/10="Extremely Successful"
Most Important Reason for Trip to Ski Area Enjoyment of the scenic beauty of the mountain/area Rest and relaxation Enjoyment of the ski area resort/town Visit friends/relatives Climate/weather Mountain getaway General sightseeing/touring Noncompetitive recreational activity Group arrangement/family reunion Combined business/pleasure National/state park Hadn't been to the area before, wanted to see it Business/professional Special event Previous experience/annual vacation Other Competitive sporting event participant Special package/offer/price/discount Seasonal residence Convention/conference/trade show Wedding/honeymoon/anniversary Recommend by friend, family, word of mouth 4% 3% 3% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 0% 0% 8% 7% 7% 6% 6% 13% 26% Percent Responding 0% 5% 10% 15% 20% 25% 30% Percent Responding
Conclusions Growing snow sports is possible, but not without focused effort. Resorts are often distracted from these efforts because of everyday operating pressures and capacity issues. Generational differences in participation have the potential to be extremely problematic. Climate change is a reality but poses opportunity in some areas. Mountain towns with strong historical identities and authentic presence are well positioned to appeal to a younger generation.