Germany and the United Kingdom are the two main ‘outbound’ skier markets in Europe, with 14.6 and 6.3 million skiers respectively. The bulk of skiers from these nations head to the major Alpine resorts in France, Austria, Switzerland, and to a lesser extent, Italy, which attract more than 70 million foreign ski visitors between them.

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Austria is Europe’s biggest international visitor recipient, recording steady annual growth in skier visits at a rate of 2.25% per annum since 2000. The number of visits is now approaching that of France, despite the fact that Austria has almost a quarter fewer resorts. Ski operators have invested heavily here in infrastructure in recent years, a strategy that seems to be paying off in maintaining a competitive edge.

The French ski market is still the world’s largest, supported by a large and mature domestic ski market, which accounts for 68% of visits.

Switzerland, attracting 26.5 million ski visitors, of which half are foreign, enjoys a particularly broad demand base. Switzerland has been an early recipient of the small but fast growing Asian ski market. With more prestigious resorts than any other country, it has a reputation for being expensive. An ageing domestic population has contributed to a long-term decline in the number of ski visits nationally but, for many visitors to Switzerland’s top resorts, the attraction is much more than just skiing.

Physical conditions

Understanding the physical conditions of a resort, the length of a season and the kind of people it attracts is key to understanding underlying demand for the leisure property market.

Resorts with a range of beginner pistes, such as Zermatt (offering 85 downhill routes across six mountains) and Klosters (with good beginners slopes) are popular with families. In turn, the market for chalets or larger apartments is stronger.

Kitzbühel, by contrast, with its fast black runs and the Hahnenkamm tournament (most difficult piste in the alpine ski world cup), attracts high-level skiers and snowboarders and, in turn, properties suited to younger buyers are favoured.

We have analysed the ski conditions of 30 major Alpine resorts, assessing the published length of season, average monthly snowfall, and ski pass costs (Figure 1). These are all important in determining the breadth and depth of market and the length of a ski season, all of which can have a big impact on the rental income achievable from a property.

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In general, Swiss resorts have the longest seasons (and deepest snow), with Saas-Fee enjoying 168 days of quoted season, coupled with average monthly snowfall of 165cm between November and April. In general, Swiss resorts are at high altitude and therefore more snow-guaranteed. They also start the season earlier than those in France and Austria.

General ski costs, for lift passes, food and accommodation etc, in Switzerland are higher. This is demonstrated by our ‘Kakao Index’, which measures the price of a hot chocolate on the mountain, (see Figure 3). Ski passes average €272 for six days, compared to €234 across the major Austrian and French resorts. Passes exceed €300 in premium resorts such as St Moritz, Verbier and Flims.

French resorts have average season lengths, but good levels of snowfall. High-snowfall resorts such as Val-d’Isère enjoy peak seasons that run well into April.

Austrian resorts, meanwhile, have the shortest quoted seasons, and relatively low levels of snowfall. Costs and property values are lowest here which can boost gross rental yields. Indeed, Austria has the highest gross rental returns, at an average of 5% to 7%.

This compares with gross yields in France and Switzerland that range from 2.5% to 4.5% (circa 1.5% to 3.5% net).

Ski conditions and season lengths, perhaps surprisingly, do not correlate closely to capital values. In the most exclusive markets, such as Verbier and Courchevel (both mid-league for ski conditions), capital values are among the highest in the Alps, while demand for rental property is such that renting out a chalet for just three weeks a year can often completely cover the annual running costs of the property.

Taken from
Spotlight: Alpine Property Market 2014-15