COVID-19 AND THE AUSTRALIAN SKI INDUSTRY'S DISASTROUS DOWNHILL RUN.

COVID CLOSED STATE BORDERS AND CAUSED RESTRICTIONS THAT PISTE-OFF SKI BUSINESSES – BUT THEY MAY BE BETTER PREPARED FOR NEXT SEASON. IF THEY CAN SURVIVE THAT LONG.

All Victorians - not just skiers with balaclavas - are wearing masks at least until Christmas. Covid restrictions had a major impact on the 2020 snow season. While some NSW resorts were able to remain open, Victorian ski fields closed, with disastrous results for businesses. Some lost over 90% of their seasonal trade. This article first appeared in our latest digital issue#94. Inside, business owners discuss their reactions and share thoughts of how they are preparing for the year ahead.

HEAD IN THE SNOW OR HEAD IN THE CLOUDS?

In a time of unrelenting uncertainty, we caught up with Lachlan Bowes who, alongside his wife Karen, runs Central SnowSports in Falls Creek, Victoria as well as a resort in Hakuba Japan, and a start-up business, Purazine. We also spoke with Reggae Ellis who owns Rip Curl stores in Thredbo and Jindabyne with his wife. Reggae also edits Mountainwatch and Chillfactor magazines. We checked in on how they’ve been getting on through this winter, what’s been keeping them motivated, and their emotions looking into the future.

The beginning of the snow season in 2020 arrived carrying a strong sense of hope, following the summer of bushfires in and around NSW ski areas such as Thredbo, Perisher, Jindabyne, and tearing through much of NSW while also hitting Victoria. The snow communities of New South Wales and Victoria had geared up to welcome guests with open arms, in desperate need of an economic push after the sub-standard summer. In both Victoria and New South Wales, as summer drew to a close and Easter approached it was clear that the winter wasn’t going to bring a refreshing influx of faces ready to take on the mountains. The international COVID-19 pandemic was already sending its first waves of warning to Australian shores.

As the national government closed international borders in March and the individual states began to mirror this strategy and close borders to each other, tourism businesses were frozen with fear of the implications. Regional areas were hit hardest, as they rely on tourism and metro travellers. Lachlan Bowes reported that initially, Falls Creek saw a large drop in bookings due to confusion and lack of communication between industry officials, the government and the public. Many snow fanatics and regulars held out on booking anything in Falls Creek for fear of losing money if the mountains were to shut down due to increasing COVID case numbers. Added to this, neither the Victorian nor New South Wales mountains received any real season-starting snow. 

After a two-week delay due to lack of snow, Falls Creek and Hotham joined Mt. Buller and other snow mountains in New South Wales: geared up and ready to open to the public for the beginning of snow season. Some bookings trickled in as the hopes of keen skiers and snowboarders rose. Three and a half days of this bittersweet opening saw excitement and the usual seasonal buzz about town as businesses welcomed the public, renting out gear and selling drinks and meals. Until, with people still arriving on their doorsteps, business owners in Falls Creek and Hotham such as Bowes and his team at Central Snow Sports were forced to turn people around in their tracks and send them home.

Interestingly, and frustratingly for many, this was a private decision, not based on government recommendations, but made by Vail Resorts, the American company that bought ownership of Falls Creek Alpine Resort, Hotham Resort and Perisher in 2019 for approximately AU$174 million. It’s thought that Vail Resorts made this decision in order to save themselves from the financial grief they expected in Victoria following a tough winter in America. Amidst much confusion and anger, businesses in Falls Creek and Hotham began the lengthy process of closing down everything they had been under the pump to open in the weeks leading up to this decision. According to Bowes and Ellis, Vail Resorts didn’t close down Perisher in NSW – leading to lots of head-scratching and theories.

As the new reality settled in - and with Melbourne in stage 4 restrictions and regional Victoria following suit into stage 3 - Falls Creek business owners watched on as resorts and towns in the Thredbo-Perisher area were able to stay open just over the border, serving customers and beginning their season. With revenue down so much, it’s understandable that Vail Resorts made the choices they did. For the largest ski resort owner in the world, the decision would not have been easy, and it provides a model for the coming snow season in the northern hemisphere. If there are COVID cases, as has been seen in Victoria, mountains and resorts will shut. But it seems possible at this point to keep the virus from spreading if social distancing rules are practised properly as seen in the New South Wales resorts.

COVID case numbers and mortality have been vastly different in NSW and Victoria, and the ski resorts reflect these differences. Victoria has seen more community transmission, more clusters of cases – often based around workplaces – and more deaths. It is only after many months of social restrictions, closed businesses and schools, social distancing and mandatory mask-wearing that Victoria has finally reduced case numbers and is looking to re-open the economy. Possibly it’s too late for the 2020 Australian ski season. But politicians, business owners and resort managers have learned a lot for the future. People at resorts mingle in close proximity: in lines, on lifts, shopping and socialising. These are prime situations for a cluster spread of COVID and are the reason Victoria couldn’t risk having the resorts open. Australian business owners and Vail Resorts have had tough lessons in living with a pandemic: the first was the need to comply with tough Victorian government restrictions. The second was to cut losses early and close resorts.

For Lachlan Bowes, it was not so much the customers who felt angry but the businesses, due to the costs entailed in opening for such a short time. Generally, Bowes` equipment rental businesses can serve approximately 4000 customers in a season. Whereas in this short-lived season of 2020, Bowes reported they served a mere 17 rental customers. Assuming this number is reflected in many other retail stores in the Victorian snow communities, it’s safe to say that revenues may have not been down by 50% - 60%, but instead closer to the 95 -98% estimated by the Victorian Tourism Industry Council. 

The arguments of the managers and businesses owners within the townships differ. If they had been able to stay open, even as long as Mt. Buller (a few weeks), they could have generated at least some revenue. As Bowes points out, a snow season’s revenue doesn’t just guide them through the three to four months that they are open: rather it is needed to push them through an entire year, until the following season. That’s the way with a seasonal industry. This is similar for seasonal workers. Many of the staff who have been stood down (or haven’t been able to return) qualify for the government's JobSeeker initiative, but due to the seasonal nature of the industry and work, they are not able to qualify for the government’s JobKeeper initiative, which hurts the business owners as well as the employees. 

“AS BOWES POINTS OUT, A SNOW SEASON’S REVENUE DOESN’T JUST GUIDE THEM THROUGH THE THREE TO FOUR MONTHS THAT THEY ARE OPEN: RATHER IT IS NEEDED TO PUSH THEM THROUGH AN ENTIRE YEAR, UNTIL THE FOLLOWING SEASON. THAT’S THE WAY WITH A SEASONAL INDUSTRY.”

Bowes and Ellis have had to make quite dramatic staff cuts in order to keep afloat. Bowes reported that in a regular season he has eight staff in his equipment hire shop, two of whom are full time. This season he only has two full time staff on his team. Bowes is also readying to make these same choices for the Japan snow season coming up. Ellis has also cut his staffing down for the same reasons. 

In New South Wales, Reggae Ellis sat in his store, as did many others, holding on to hear what restrictions would be announced. Restrictions were announced, but they allowed more access, more potential revenue and were less demanding than those of Victoria. Thredbo mountain has been open at a 50% capacity rate, but according to Ellis, this hasn’t necessarily been reflected in sales. He told us that July was down significantly but August had panned out okay, which brought on a tentative sigh of relief 

Ellis gave us a talk-through-tour of how the town of Thredbo is looking, sounding and feeling at the moment. It sounds as though you’d have a ball in Thredbo if you and fifteen friends were there to enjoy the apres that Thredbo is famous for. But sadly, this is head-in-the-snow talk. Ellis reported that the town seems to be at about 25% of its usual capacity at this time of year, so rather than being surrounded by hype and energy, it’s rather empty and lonely. The atmosphere is flat due to the lack of live music (by lack of, we mean non-existent), no social mingling in shops and social distancing when on the street. The numbers are just not there. People are staying home.

So, who is actually there?

It’s interesting: according to Ellis, there’s a slew of new faces hitting the slopes at Thredbo. This could be a consequence of the new 2020 ticketing system that came from Mt Buller's revised operating model, created in order to adhere to daily capacity limits. Enforcing daily limits has seen many of the regulars skip this season. Numbers of traditional skiers and snowboarders are also down due to poor snowfall, which has resulted in the early-season closure of the runs and lifts of Thredbo. Many of this year's Thredbo visitors weren’t visiting for the slopes anyway, it seemed: a large portion of those who visited opted for tobogganing or simply seeing the township in the daytime while staying in one of the many quality Bed and Breakfasts that the area offers. Hopefully the closure of the mountain won’t affect the new visitors who have been visiting Thredbo this season. Another potential reason for the new visitors to the area could be the trickle-on effect of the “support local” campaign which gained much popularity and attention during the summer bushfires, assisted of course by COVID’s “stay national” or even “stick to your state” restrictions. Many seasoned travellers may be looking for new adventures closer to their own stomping grounds for a change.

“ACCORDING TO ELLIS, THERE’S A SLEW OF NEW FACES HITTING THE SLOPES AT THREDBO.”

For those looking to international travel, the options for Australians chasing a Northern Hemisphere snow season are still looking very unlikely. With this in mind, business owners such as Bowes (who also runs a business out of Hakuba, Japan) have been able to at least take note of Australia’s reactions to the pandemic and are preparing accordingly for the upcoming season in Japan. This preparation has included analysis of pre-season marketing coming into the season that generally targets westerners, expats and foreign workers already located in Japan. Marketing for the upcoming season will move to strengthen domestic Japanese interest and will closely monitor who Japan opens its borders to (this will potentially include China, Singapore and Malaysia, among others). Bowes is welcoming the challenge to break into these historically tougher markets rather than relying so much on the Western skiers and snowboarders.

“BOWES IS WELCOMING THE CHALLENGE TO BREAK INTO THESE HISTORICALLY TOUGHER MARKETS RATHER THAN RELYING SO MUCH ON THE WESTERN SKIERS AND SNOWBOARDERS.”

The inability to leave Australia will continue having hard-hitting effects on our snow industry after the Australian snow season is over. Australia can have anywhere from 60,000 to 70,000 travellers head to the Northern Hemisphere for snow seasons primarily in Japan, the US and Canada. Many of these people purchase hardware and clothing in Australia before they leave. With these travellers no longer able to leave the country, and not having tickets (or in some cases, not being able to use their tickets) snow gear supply stores in many metro and regional areas are going to face even greater hardship coming into November/December. In a statement released by Snowsports Industries of Australia, Melbourne CBD’s largest retailer of snow supplies, Neil Ritchie of Auski, revealed that he expects sales to be down 90% in July. In the case of Auski, he is thankful that as an urban-year-round ski store he qualifies for Jobkeeper and can keep his staff on. But his biggest worry is the rental cost of Melbourne stores. 

Many snow hardware and clothing businesses that have been open this year have also had challenges in stocking their shelves with their trusted brands. Large overseas brands coming out of northern hemisphere winters began to hold off from sending Australian stores their products. The fear was that the Australian stores weren’t going to be able to pay the bills this year, and when making choices between paying a house mortgage, outlet rent or staff pay, the hardware suppliers such as Le Bent opted to hold their Australian sales and supplies until next year.

“THE FEAR WAS THAT THE AUSTRALIAN STORES WEREN’T GOING TO BE ABLE TO PAY THE BILLS THIS YEAR...”

As the Australian winter season comes to an end, Thredbo mountain has seen an early closure due to warm weather and lack of snowfall, another blow in the slow and strange season that has been the winter of 2020. Ellis reported that there were still people around town, even though the mountain has closed, and with a good snowfall forecast for Perisher which is still open he’s expecting his store in Jindabyne to see some customers still. Ellis was looking forward to the summer season and being able to welcome tourists and mountain bikers back to the area and is optimistic about the future of the NSW ski industry.

Following the government's “roadmap to recovery”, the regional Victorian travel restrictions have eased and Falls Creek Resort has reopened. Falls Creek Resort is offering many enticing discounts in order to encourage regional Victorians to travel to the area, including complementary resort entry. Businesses such as Bowes’ Central Snow Sports are keen to ‘reboot the winter 2020 season’ and are offering discounts such as 20% off all bookings for hardware as well as 50% off shoulder season rates, all while offering pre-delivered and sanitised equipment. It’s a late push to generate some revenue, but as highlighted earlier, this is what is needed to get these businesses through the year. Some resorts in New South Wales had their season cut short by four weeks, but Victorian resorts such as Falls Creek are just hoping to be at least able to trade for four weeks. Bowes had a positive outlook into the future of the snow industry but also stressed that there are many businesses that will not make it through to see the following season.

Looking into the future, there are many mixed emotions. The same hope that was felt coming out of the bushfire season still exists in many as they come out of the snow season. As the Snowsports Industry of Australia statement points out, 2020 has been a tough year for small businesses and many will not make it through, especially if the government doesn’t provide some sort of targeted action plan. On the other end of the scale, there will be some new business ventures, as there always are after devastating times. One of these that is directly battling the effects of COVID in the ski industry, is Bowes’ start-up business “Purazine”.

Purazine is a retail-friendly sanitation distributor which Bowes was able to research and create when he realised the effects COVID was having in Japan. He wanted to be ahead of the game in order to keep Australian stores safe and decided to cater for the ski industry primarily - but is now branching out into other industries. Bowes said he was happy that the product response had been very positive so far and is excited to infiltrate further into the other industries. Vail Resorts, Rhythm Snowsports and a few shops in Jindabyne have all been amongst the initial support.

Government support is crucial to the longevity of businesses in the tourism industry in Australia and particularly in Victoria, both regional and Metro. A specified roadmap to recovery for the tourism industries of regional Victoria needs to become available in order to keep businesses afloat until they can create their own revenue next year. Bowes and Ellis both touched on the peculiarities of not knowing how the future will look for tourism and the snowsports industry. It is a necessity that by the time winter 2021 arrives, Australia has curated a way in which we can live with COVID, even without a vaccine. The hope is to be open at full capacity with new sanitisation practices, but if this is not deemed possible or safe, the mountains may continue in the same restricted capacity that New South Wales displayed this year.

The road to normality is unclear at this stage, but there is a lot of positivity and strength coming from those who have suffered most as they follow restriction guidelines and support each other through these times.

Words Anna Brady @asbmag.com