Cable cars generate more and more revenue in summer
Published: Friday, Oct 4th 2024, 10:30
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As a result of climate change, Swiss mountain railroads are increasingly suffering from winter months with little snow. They are therefore coming up with ideas to keep guests happy even when there is little snow - and are increasingly trying to attract guests in the summer. These efforts are having an effect, as a study shows.
Between 2014 and 2022, Swiss cable cars have significantly increased their turnover in the summer months: summer traffic revenue increased by 45% over the period, according to a study published on Friday by the Swiss Cable Car Industry Association in collaboration with Lucerne University of Applied Sciences and Arts. This means that summer business is now responsible for a quarter of the total transport revenue of Swiss mountain railroads.
For their study, the authors analyzed the financial situation of 77 cable car companies in Switzerland, including 19 excursion and 58 winter sports cable cars. "The decisive factor for summer success is the existence of valuable offers for which guests pay a price that is roughly comparable to a day ski pass," Philipp Lütolf from Lucerne University of Applied Sciences and Arts is quoted as saying in the press release.
Nevertheless, winter business is still more important for many lift operators. Not least because, according to the study, winter sports railroads have to compensate for every missing winter guest with 1.3 to 4.2 summer guests to make up for the loss of revenue.
Snow cannons are important
To ensure that enough people come to a ski resort in winter, snow reliability plays a decisive role. And if the snow doesn't fall, it has to be produced artificially. According to the study, investments in technical snowmaking systems are "of crucial importance for long-term success".
Snow reliability is particularly crucial for dynamic price models, as has been shown. In other words, where the price rises or falls in line with demand, customers who buy a more expensive ticket also want to be sure of having enough snow.
The introduction of this pricing policy had a "significantly positive" effect on the average daily revenue per guest. However, according to the study, it is not clear whether the dynamic pricing model also attracts more people per day. "Some seem to gain compared to the 'static' competition, others lose," say the authors.
Financially stable mountain railroads
The majority of Swiss mountain railroads have "developed positively overall and are well on the way to securing their financial stability, even if changes such as rising energy costs and climate change pose a challenge," the report continues.
Almost one in three cable car companies analyzed achieved a "good to very good" return on investment on average in the 2021/22 and 2022/23 financial years. According to the press release, particularly large and snow-sure winter sports regions were among the top performers.
Around 45 percent of the companies had a "sufficient" return on capital, while around a quarter of the 58 cable cars surveyed had to "resort to external financial aid on a larger scale" in order to secure financing for future investments.
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