MN Econ Report FINAL-1Minnesota Ski Areas Association: Economic Impact Study Final Report RRC...

Minnesota Ski Areas Association Economic Impact Study

Prepared for:

Minnesota Ski Areas Association

Prepared by:

RRC Associates, Inc.

4940 Pearl East Circle, Ste 103 Boulder, CO 80301 303/449-‐6558 www.rrcassoc.com

2012/13 Fiscal Year Final Report

Minnesota Ski Areas Association: Economic Impact Study Final Report

RRC Associates, Inc. Contents

T A B L E o f C O N T E N T S

EXECUTIVE SUMMARY ............................................................................. 2

INTRODUCTION .......................................................................................... 7

METHODOLOGY ......................................................................................... 8

SKIER AND SNOWBOARDER SPENDING ANALYSIS .......................... 11

MINNESOTA SKIER/SNOWBOARDER DEMOGRAPHIC PROFILE ...... 17

DAY TRIP VISITOR PROFILE ................................................................... 24

DESTINATION / OVERNIGHT TRIP VISITOR PROFILE ......................... 26

ABOUT RRC ASSOCIATES ..................................................................... 32

Minnesota Ski Areas Association: Economic Value Study Final Report

RRC Associates, Inc. 2

Executive Summary

Minnesota has nineteen ski and snowboard areas spread across the state. Minnesota has a strong tourism economy and winter sports, whether its snowmobiling, ice-‐fishing, cross-‐country skiing or alpine skiing and snowboarding, play a key role in the overall tourism economy of the state.1 Winter activities are often the key link to the overall tourism economy in rural Minnesota; providing jobs when needed most and providing a vital counterbalance to the typical summer/fall orientation of rural tourism economies. This report is the result of a study to document the economic value of the alpine ski and snowboard industry in Minnesota. The report includes demographics, participation, and other characteristics of residents of Minnesota who alpine ski and snowboard.

Total Economic Impact

An estimated 308,000 people in Minnesota2 (about 6% of the population) participate in alpine skiing and snowboarding, of which an estimated 210,000 visited one or more Minnesota ski areas and an estimated 98,000 did not visit a Minnesota ski area, but rather skied/ snowboarded out of state. More than half of survey respondents are part of a household with children at home, with an average household size of 3.5 people, including 2.7 people who ski/snowboard. The average age of respondents is 40.4 years (median of 42 years), with an average household income of $107,000 (median of $88,000). Alpine skiing/snowboarding is an active outdoor recreation that can and is enjoyed by people of all ages with family and friends during the Minnesota winter from October/November through March/April. 1 Explore Minnesota Tourism, Tourism and Minnesota’s Economy, 1/31/14. 2 Estimate of the number of skiers and snowboarders living in Minnesota is derived from the NSAA National Demographic Study, 2012/13



• Total Output Effect. The total direct and secondary output effects of the alpine ski and snowboard resort industry in Minnesota are $401.2 million for the 2012/13 season.

Table 1

Total Economic Impact (Direct and Secondary), 2012/13

Aggregate

Effect Total direct ski area visitor expenditures $193,186,374 Total retail-‐specific expenditures (equipment, apparel, accessories) + $89,622,514 Total Skier and Snowboarder Spending $282,808,888 Direct output ratio (margin adjustment) 0.82 Direct output effect $231,903,288 Secondary output ratio (statewide) 0.73 Secondary output effect (statewide) $169,289,401 Total output (direct and secondary) $401,192,689

• Direct Spending. Total direct aggregate ski area visitor spending is $193.2 million. Of this total, approximately 51 percent goes directly to ski area businesses, and 49 percent goes to other businesses (65% in the case of overnight skier visits).

• Retail Specific Expenditures. An additional component of the economic benefit of alpine skiing and snowboarding in Minnesota is retail expenditures made specifically for the sports – equipment, apparel, and accessories. The direct expenditures in this retail segment are estimated at $89.6 million (excluding purchases made at ski area-‐owned shops).

• Impact beyond Ski Area Businesses. Aggregate direct consumer spending at businesses other than the ski area, retail spending, and secondary spending accounts for 75% ($302.8 million) of the total economic impact of $401.2 million.



Skier and Snowboarder Spending

The total direct spending from Minnesota skiers and snowboarders (sum of ski area visitor spending, both on and off mountain, plus related retail spending) was roughly $282.8 million for the 2012/13 season.

Table 2 Total Skier and Snowboarder Spending, 2012/13

Day Visitor Spending

On-‐Mountain Spending $67,836,703 Off-‐Mountain Spending + $38,419,969 Total Day Visitor Spending $106,256,672

Overnight Visitor Spending

On-‐Mountain Spending $30,505,927

Off-‐Mountain Spending + $56,423,775 Total Overnight Visitor Spending $86,929,702

Total Retail Expenditures $89,622,514

Grand Total Skier and Snowboarder Spending $282,808,888



• Per Person Day Spending. Day visitors spend an average of $91.82 per day, including $58.62 on-‐mountain and $33.20 off-‐mountain, and $130.26 per day including secondary outputs. Overnight visitors exhibit a higher average, at $335.17 overall ($117.62 on-‐mountain and $217.55 off-‐mountain), and $475.47 per day including secondary outputs.

Table 3 Per Person Per Day Skier/Snowboarder Spending, 2012/13

Spending per person per day (Day Visitor)

On-‐Mountain Spending $58.62 Off-‐Mountain Spending + $33.20 Per Person Per Day Spending (Day Visitor) $91.82 Per Person Per Day Spending with Secondary Output (Day Visitor) $130.26

Spending per person per day (Overnight Visitor)

On-‐Mountain Spending $117.62

Off-‐Mountain Spending + $217.55 Per Person Per Day Spending (Overnight Visitor) $335.17 Per Person Per Day Spending with Secondary Output (Overnight Visitor) $475.47

• Total Visits in Minnesota. Ski areas in Minnesota recorded 1.42 million alpine ski and snowboard visits in 2012/13, of which 82 percent (or 1.16 million) were day visits and 18 percent (or 260,000) were visits as part of an overnight trip. Visits by Minnesotans comprised 92 percent of the 1.42 million (1.30 million), with the remaining 100,000 from non-‐residents (including about half from residents of Wisconsin). Minnesota ranks 8th in the U.S. in terms of overall skier visits, with 1.9 million skier visits by Minnesota residents to ski areas across North America. As well, Minnesota is in the top 15 in the U.S. in terms of skier visits per capita.

• Visits by Minnesotans Outside the State. The NSAA National Demographic Study estimates that residents of Minnesota generate 1.9 million alpine ski or snowboard visits, and yet only 1.3 million of those visits are captured within Minnesota. In other words, approximately 600,000 alpine ski and snowboard visits by Minnesota residents occur outside the state (“leakage”), with nearly one-‐third (98,000) of Minnesota’s 308,000 skiers not visiting a Minnesota ski area during the 2012/13 season. It is estimated that 28 percent of this leakage is day visits (the percent that currently occur



in Wisconsin) and the remaining 72 percent are visits to states that require overnight stays (e.g. Colorado, Montana, Utah and Michigan). The total value of this leakage is estimated at $161.6 million in direct spending and $229.2 in aggregate economic value.

Thus, a significant economic opportunity exists if a portion of these visits could be re-‐captured by Minnesota ski areas. For example, if one-‐quarter of these leaked skier visits (151,000) occurred in Minnesota at the proportion of 28 percent day visits and 72 percent overnight visits, it would generate an additional $40.4 million in direct spending and $57.3 million in aggregate economic value.

Additional Economic Benefits

Several additional economic benefits are attributable to the presence of ski areas in Minnesota; wages, income and charitable contributions.

• Employment value. In terms of employment generated in the alpine ski and snowboard industry, the estimate is that these businesses directly employ over 3,680 people. Total employment at both ski areas and at other businesses that benefit from the off-‐mountain expenditures are estimated at 8,024 jobs. Wages and salaries paid to these total employees is $140.4 million.

• Charitable contributions. Ski area businesses in Minnesota are estimated to have donated nearly $300,000 worth of donations (cash and in-‐kind) during the 2012/13 fiscal year.



Introduction

Tourism in Minnesota generates $12.5 billion in gross sales and provides more than 245,000 full and part-‐time jobs, according to Explore Minnesota Tourism analysis. Winter’s portion of the tourism economy is 24%, just slightly behind the fall season’s 25%.3 Winter activities are often the link to the overall tourism economy in rural Minnesota; providing jobs when needed the most.

Minnesota has nineteen ski and snowboard areas spread across the state. From a national perspective, Minnesota ranks 12th in the nation for providing skiing and snowboarding opportunities at Minnesota ski areas and 8th in skier visits by Minnesotans in Minnesota and elsewhere. Explore Minnesota Tourism’s winter business survey shows that winter sports, whether its snowmobiling, ice-‐fishing, cross-‐country skiing or alpine skiing and snowboarding, play a key role in the overall tourism economy of the state.4 This report is the result of a study to document the economic value of the alpine ski and snowboard industry in Minnesota. The report includes demographics, participation, and other characteristics of residents of Minnesota who alpine ski and snowboard. This information will help guide decision-‐making on policy issues impacting the industry as well as marketing strategies to strengthen the industry. This report incorporates the results of a consumer survey of residents who ski and snowboard as well as a survey of ski area operators. The consumer survey asked alpine skiers and snowboarders questions about their participation patterns, expenditure patterns, demographic characteristics, travel impacts, and other questions related to the ski and snowboard industry. The ski area operator survey asked about ski area revenues and expenses, payroll, taxes paid, charitable contributions, employment base, and other factors related to the operations of the ski areas in Minnesota. Note that the results of the consumer survey include people who downhill ski and snowboard in Minnesota, regardless of their place of residence. 92 percent of survey respondents live in

3 Explore Minnesota Tourism, Tourism and Minnesota’s Economy, 1/31/14. 44 Summary Results: Minnesota Tourism Business – Winter 2012-‐13



Minnesota, while 5 percent live in Wisconsin, 1 percent each in Iowa and North Dakota, and the remaining 1 percent from other states. The economic value figures in this report quantify only the most direct impacts, and do not include social, environmental, or cultural impacts, which can be significant but are more difficult to quantify and are not included in this analysis. These factors are discussed at the end of the report.

Methodology

The purpose of this study was to gather demographic and spending behavior information for the ski and snowboard industry in Minnesota to determine the economic impact the industry has within the State. Nineteen ski and snowboard areas are currently in operation in Minnesota.5 Fourteen of these areas participated in the study, utilized their contact lists of skiers/snowboarders/visitors who visit or follow their resorts and contacted them to participate in the Minnesota Ski Areas Association’s Economic Impact Study. The final sample size was 2,273, resulting in a margin of error of approximately +/-‐ 2.06 percentage points calculated for questions at 50% response6. Total individual skiers and snowboarders visiting Minnesota ski areas represented by the respondent group was estimated at 229,000, of which 92 percent (210,000) were Minnesota residents and 8% (19,000) were residents of other states (about half from Wisconsin).

5 Fourteen ski areas participated in the survey component of the study (i.e. all ski areas listed on Table 4 except Chester Bowl, Como Park, Elm Creek, Mount Itasca and Wirth Park); information on the 5 non-‐participating ski areas was estimated based on public information and information provided by those ski areas. Additional information was gathered by email and telephone contacts. 6 For the total sample size of 2,273, margin of error is +/-‐ 2.06 percent calculated for questions at 50% response (if the response for a particular question is “50%”—the standard way to generalize margin of error is to state the larger margin, which occurs for responses at 50%). Note that the margin of error is different for every single question response on the survey depending on the resultant sample sizes, proportion of responses, and number of answer categories for each question. Comparison of differences in the data between various segments, therefore, should take into consideration these factors. As a general comment, it is sometimes more appropriate to focus attention on the general trends and patterns in the data rather than on the individual percentages.



The underlying data for the sample were weighted by actual skier/boarder visits for the 2012/13 season to ensure appropriate representation of skiers/boarders across the State of Minnesota and to the ski areas.

Table 4 Operating Alpine Skiing and Snowboard Areas in Minnesota

Afton Alps Andes Tower Hills Buck Hill Buena Vista Chester Bowl Coffee Mill Como Park Elm Creek Mt. Itasca Hyland Ski and Snowboard Giant’s Ridge Lutsen Mountains Mount Kato Powder Ridge Ski Gull Spirit Mountain Welch Village Wild Mountain Wirth Park

Detroit Mountain, a ski area in Detroit Lakes, Minnesota that has been closed for a number of years, is completing a $7.5 million reinvestment program in preparation for its reopening for the 2014/15 season. With Detroit Mountain, the number of ski areas in Minnesota will increase to 20 ski areas, and the additional economic impact will add to the $401 million in future seasons.



Figure 1 Operating Alpine Skiing and Snowboard Areas in Minnesota



Skier and Snowboarder Spending Analysis

This section contains detail about the visitor expenditure components of the total economic value figure. The results are presented as on-‐mountain expenditures, off-‐mountain expenditures, and total direct consumer expenditures. • Day Visitor Spending

Day visitors reported on their most frequently visited ski area for a day trip (i.e. a single day skiing/boarding where your home is the origin and final destination for that day). The aggregate total for day visitor spending to Minnesota ski areas for the 2012/13 fiscal year was $106.3 million. This figure includes spending on-‐mountain (i.e. at the ski area) as well as off-‐mountain (anywhere other than the ski area). See Table 5.

o On-‐mountain day visitor spending is estimated at $67.8 million ($58.62 per person). Lift tickets accounts for the largest portion of this total with $33.25 million ($28.74 per person), followed by food & beverage with $19.2 million ($16.61 per person).

o Off-‐mountain day visitor spending is estimated at $38.4 million ($33.20 per person). Fuel/transportation is the largest component with $22.2 million ($19.20 per person), followed by food & beverage at $10.7 million ($9.25 per person).



Table 5 Day Visitor Spending

On-‐Mountain Spending Per person Total

Expenditures Percent of

Total Spending

Food & Beverage $16.61 $19,221,557 18.1%

Equipment Rentals $6.87 $7,950,156 7.5%

Retail/Gifts $3.00 $3,471,684 3.3%

Lift Tickets $28.74 $33,258,732 31.3%

Snowsports School $2.37 $2,742,630 2.6%

Other $1.03 $1,191,945 1.1%

Total On-‐Mountain Spending $58.62 $67,836,703 63.8%

Off-‐Mountain Spending

Food & Beverage $9.25 $10,704,359 10.1%

Equipment Rentals $0.73 $844,776 0.8%

Retail/Gifts $1.11 $1,284,523 1.2%

Entertainment/Après-‐Ski $2.54 $2,939,359 2.8%

Fuel/Transportation $19.20 $22,218,777 20.9%

Other $0.37 $428,174 0.4%

Total Off-‐Mountain Spending $33.20 $38,419,969 36.2%

Total Day Visitor Spending $91.82 $106,256,672 100.0%

• Overnight Visitor Spending

Overnight visitors (i.e. visitors to a ski area involving at least one night away from home) reported on their spending on their most recent overnight trip. The aggregate total for overnight visitors to Minnesota ski areas was $86.9 million. Similar to the day visitor figures, this total includes spending on-‐mountain as well as off-‐mountain. See Table 6.

o On-‐mountain overnight visitor spending is estimated at $30.5 million ($117.62 per person). Lift tickets accounts for the largest portion of this total with $17.0 million ($65.62 per person per day), followed by food & beverage with $7.4 million ($28.62 per person per day).

o Off-‐mountain overnight visitor spending is estimated at $56.4 million ($217.55 per person). Lodging is the largest component with $28.1 million ($108.34 per person per day), followed by fuel/transportation ($15.6 million, $60.24 per person per day) and food & beverage ($8.0 million, $30.75 per person per day).



Table 6 Overnight Visitor Spending

On-‐Mountain Spending Per person Total

Expenditures

Percent of Total

Spending

Food & Beverage $28.62 $7,422,884 8.5%

Equipment Rentals $8.97 $2,326,459 2.7%

Retail/Gifts $10.11 $2,622,130 3.0%

Lift Tickets $65.62 $17,019,205 19.6%

Snowsports School $2.91 $754,738 0.9%

Other $1.39 $360,510 0.4%

Total On-‐Mountain Spending $117.62 $30,505,927 35.1%

Off-‐Mountain Spending

Food & Beverage $30.75 $7,975,321 9.2%

Equipment Rentals $1.02 $264,547 0.3%

Retail/Gifts $6.36 $1,649,530 1.9%

Entertainment/Après-‐Ski $10.37 $2,689,564 3.1%

Lodging $108.34 $28,099,066 32.3%

Fuel/Transportation $60.24 $15,623,848 18.0%

Other $0.47 $121,899 0.1%

Total Off-‐Mountain Spending $217.55 $56,423,775 64.9%

Total Overnight Visitor Spending $335.17 $86,929,702 100.0%



• Household Retail Equipment Purchases

Respondents were also asked to report on how much all individuals in their household, combined, spent in Minnesota on ski/snowboard equipment and retail for the 2012/13 season. The retail expenditures for the 2012/13 fiscal year, not including expenditures made at the ski areas, total at $89.6 million.

o With the $1,033 spent on retail equipment per household, 3.52 people per household in Minnesota, and roughly 308,000 skiers/snowboarders in Minnesota, the total retail expenditures in Minnesota is $89.6 million.

Table 7 Household Retail Equipment Expenditures

Household Retail Equipment Purchases Amount Percent of Total

Skis/snowboards $394.75 38.2%

Boots/poles $173.31 16.8%

Clothing $290.86 28.2%

Accessories $134.67 13.0%

Equipment rentals $39.65 3.8%

Total Household Retail Equipment $1,033.24 100.0%

Number of people in household 3.52

Number of skiers/snowboarders in MN* 308,000

Total MN retail expenditures $90,408,500

LESS: Retail expenditures at MN ski areas $785,986

Total (Non-‐Ski Area) Retail Expenditures $89,622,514

*Estimate of the number of skiers and snowboarders living in the state of Minnesota (308,000) derived from NSAA National Demographic Study, 2012/13.



Total Economic Impact

Economic value has several effects, including direct and secondary (indirect and induced effects). Thus far, this report has focused on the direct value that skiers and snowboarders generate through their spending. To estimate the indirect and induced effects, a multiplier is generally utilized. A multiplier is a figure used to estimate the secondary effects on the statewide economy of a particular industry.

For this study, a pair of different multipliers is used, one to estimate the direct output and one to estimate secondary outputs. The sum of the two is therefore the total output, or total economic value of the ski and snowboard industry in Minnesota. Total output attributable to the ski area industry in Minnesota is estimated as the sum of direct and secondary effects, or approximately $401.2 million.

Table 8 Total Output (Direct and Secondary), 2012/13

Aggregate

Effect Total direct ski area visitor expenditures $193,186,374 Total snowsports-‐specific expenditures (equipment, apparel, accessories) + $89,622,514 Total Skier and Snowboarder Spending $282,808,888 Direct output ratio (margin adjustment) 0.82 Direct output effect $231,903,288 Secondary output ratio (statewide) 0.73 Secondary output effect (statewide) $169,289,401 Total output (direct and secondary) $401,192,689

Note: Direct output ratio (0.82) and secondary output ratio (0.73) are approximate averages for visitor spending effects at the statewide level of geography, as cited as by Stynes, D.J. (2010), as quoted in Crompton, J.L. (2010), Measuring the Economic Impact of Park and Recreation Services, National Recreation and Park Association, Ashburn, VA, p. 37. Actual ratios in Minnesota may differ from these averages.



Table 8 above illustrates the estimated direct, secondary, and total output effects attributable to the ski area industry in Minnesota. Direct output, estimated at $231.9 million, is calculated by multiplying visitor expenditures and retail expenditures by 0.82 (a generalized adjustment factor which reflects typical retailer margins). This step is necessary to omit the cost of goods sold which are made outside of Minnesota, and thus appropriately reflect the economic output captured within Minnesota. Secondary output economic effects, as defined earlier, are roughly estimated at $169.3 million. Secondary effects are calculated by multiplying direct output by 0.73, a factor which is also based on national averages in the tourism industry. These multipliers combined equal a multiplier of 1.42. Several factors impact the size of a multiplier. Industries in large urban areas generally have higher multipliers because more of the spending by the industry stays within the local area. Smaller industries in more rural areas would generally have smaller multipliers because more of their spending leaks out to other regions where the goods are produced. For tourism and other service industries, multipliers might be somewhat higher because the spending is actually for a service, not a product, and thus more value is retained. A multiplier for a state-‐level analysis would tend to be higher than one for a regional or local analysis. All these factors must be taken into consideration when estimating the multiplier. The reliability of the level of tourism activity (in this case, ski and snowboard visits) and spending should also be taken into account. It should be noted that, given some of the above factors and the conservative nature of this analysis, a relatively low multiplier has been utilized for this report. While the confidence in the direct spending is high (very reliable ski and snowboard visit numbers, day/overnight visitor percentages, summer revenues, and visitor expenditure numbers), the calculation of a multiplier through an Input-‐Output model or other academic modeling is beyond the scope of this analysis. Rather, comparisons to similar industries and expert judgment were used to derive the multiplier figure.



Minnesota Skier/Snowboarder Demographic Profile

The demographic profile of the respondents to the study includes the following:

• Households with a mean income of $107,000 (median of $88,000). (Figure 2)

• More than half with children at home (55%), one-‐fourth single with no children (25%), about one-‐tenth couple with no children (11%), and household with children no longer living at home (10%). (Figure 2)

• Average household size of 3.5 people (median of 4.0); average number of 2.7 people who ski/ride (median of 3.0). (Figure 3)

• About two-‐thirds of respondents are male (one-‐third female). (Figure 4)

• Average age of respondent is 40.4 years (median age of 42.0 years). (Figure 4)

• Almost six out of ten respondents are actively employed full-‐time, another one-‐fifth are students. (Figure 5)

• Of the students, almost half are in high school (48%); another half is college students (47%); the remainder was in graduate school or PhD candidates (5%). (Figure 6)

• Of the respondents who are not students, half are college graduates (50%); one-‐fourth has their post-‐graduate degree, almost one fifth has some college (19%); 5% has a high school diploma or equivalent; only 2% only has some high school education. (Figure 6)



Figure 2 Household Income / Marital Status

Figure 3 Number of People within MN Households and Who Ski/Ride

9%12%

33%

26%

10%5% 5%

55%

25%

11% 10%

0%

10%

20%

30%

40%

50%

60%

Less than $25,000

$25,000 to $49,999

$50,000 to $99,999

$100,000 to $149,999

$150,000 to $199,999

$200,000 to $249,999

$250,000 or Above

Household With

Children At Home

Single, No Children

Couple, No Children

Household With

Children No Longer At Home (Emtpy Nester)

Annual Household Income Before Taxes Marital / Household Status

Overall AverageOverall Household IncomeAverage: $107,237Median: $75,000

9%

19%

16%

32%

17%

6%

0% 1%

23%26%

18%

21%

8%

3%0%

0%

5%

10%

15%

20%

25%

30%

35%

1 2 3 4 5 6 to 9 10 or More

None 1 2 3 4 5 6 to 9 10 or More

Number of people in household Number of people in household who ski/ride

Overall AverageOverall Number of People in HouseholdAverage: 3.5Median: 4.0

Overall Number of People in Household

Who Ski/RideAverage: 2.7Median: 3.0



Figure 4 Gender / Age of Respondent

Figure 5 Employment of Respondent

36%

64%

19%15%

23%27%

12%

3%0%

0%

10%

20%

30%

40%

50%

60%

70%

Female Male 18 -‐ 24 25 -‐ 34 35 -‐ 44 45 -‐ 54 55 -‐ 64 65 -‐ 74 75 or older

Gender Age of respondent

Overall Average Overall Age of Respondent

Average: 40.4Median: 42.0

59%

12%

4% 3%

20%

2%0%

10%

20%

30%

40%

50%

60%

70%

Actively Employed Full-‐Time

Actively Employed Part-‐Time

Retired Homemaker Student Other:

Employment Status

Overall Average



Figure 6 Student Status / Educational Attainment

48% 47%

5%2%

5%

19%

50%

24%

0%

10%

20%

30%

40%

50%

60%

High School Student

College Student

Graduate or Phd

Student

Some High School

High School Diploma

or Equivalent

Some College

CollegeGraduate

Post-‐Graduate Degree

(IF STUDENT) Type of Student (IF NOT STUDENT) Education Attainment

Overall Average



A much higher percentage of intermediate, advanced, and expert skiers replied to the study than snowboarders. More than one-‐third of all respondents had never tried snowboarding before whereas only 7% of respondents never tried skiing.

Figure 7 Skill Level / Ability

Reflective of the skill levels and abilities, respondents have been skiing an average of 11.2 seasons, while snowboarders have averaged only 3.5 seasons. More than one-‐third of respondents have been skiing 20 years or more (2% for snowboarders).

Figure 8 Total Seasons Skiing / Boarding

7%

11%

33%30%

19%

38%

19% 19% 18%

5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Never Tried Beginner Intermediate Advanced Expert Never Tried Beginner Intermediate Advanced Expert

Skill level for downhill skiing Skill level for snowboarding

Overall Average

17%

5%

12% 13%17%

37%

52%

8%

13% 14%11%

2%

0%

10%

20%

30%

40%

50%

60%

None (Dont Ski)

One 2 to 4 5 to 9 10 to 19 20+ None (Don't Snow-‐board)

One 2 to 4 5 to 9 10 to 19 20+

How many seasons have you been downhill skiing? How many seasons have you been snowboarding?

Overall Average Overall Number of Seasons Snowboarding


Overall Number of Seasons Skiing




The average number of days skied/boarded per season the last three seasons has gone up steadily with a high of 23.7 times last season (median of 15.0 days for each of the past two seasons and 12.0 for the 2012/11 season).

Figure 9 Average Number of Days Skied /Boarded Each of Past Three Seasons

The average respondent indicated skiing/boarding a total of 49.8 days (82%) in Minnesota over the past three seasons. Survey participants ski and board only 10.7 days (18%) in places other than Minnesota, including Wisconsin and Colorado (3 days each, on average). These figures show that the respondent group spends the vast majority of their available days at ski areas in the state of Minnesota.

20.3

12.0

21.5

15.0

23.7

15.0

0.0

5.0

10.0

15.0

20.0

25.0

Average Median Average Median Average Median

2010/11 season 2011/12 season 2012/13 season

Overall Average



Figure 10 Number of Days Skied / Boarded in the Past Three Years (By State)

Approximately 600,000 skier visits by Minnesotans are recorded in locations other than Minnesota. Of that total, approximately 300,000 skier visits were recorded outside the State by nearly one-‐third (98,000) of Minnesota’s skiers not visiting a Minnesota ski area during the 2012/13 season. The total value of this leakage is estimated at $161.6 million in direct spending and $229.2 in aggregate economic value. It is estimated that 28 percent of this leakage is day visits (the percent that currently occur in Wisconsin) and the remaining 72 percent are visits to states that require overnight stays (e.g. Colorado, Montana, Utah and Michigan). Thus, a significant economic opportunity exists if a portion of these visits could be re-‐captured by Minnesota ski areas. For example, if one-‐quarter of these leaked skier visits (151,000) occurred in Minnesota at the proportion of 28 percent day visits and 72 percent overnight visits, it would generate an additional $40.4 million in direct spending and $57.3 million in aggregate economic value.

49.8

3.0 3.01.1 1.0 0.9 0.6 0.6 0.3 0.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Minnesota Wisconsin Colorado Montana Michigan Other: Canada Utah California Wyoming

Overall Average



Day Trip Visitor Profile

With the definition of a Day Trip as a “single day of skiing/boarding where your home is the origin and final destination for that day”, ninety-‐two percent of respondents reported they had visited a Minnesota ski area for a Day Trip within the last 3 years. Of the ninety-‐two percent who indicated visiting a Minnesota ski area for a Day Trip, almost one-‐fifth reported visiting Afton Alps most frequently (19%); followed by Welch Village and Hyland (14% each), Buck Hill (11%), Wild Mountain (10%), Spirit Mountain (7%), and Mount Kato, Giants Ridge, Lutsen Mountain, and Andes Tower Hills (4% each). Each of the other ski areas had 2% or less of respondents indicate as their most frequently visited Day Trip ski area.

Figure 11 Most Frequently Visited Day Trip Ski Locations

More than half of respondents who visited a Minnesota ski area for a Day Trip owned a season pass for their most frequently visited ski area within the past 3 years (57%). Respondents average almost 40 miles travelled, one way, to get to their most frequently visited ski area. Roughly one-‐fifth travelled over 50 miles one way. About one-‐third travelled 15 miles or less and more than half travelled 30 miles or less (56%).

19%

14%14%

11% 10%

7%

4% 4% 4% 4%

2% 1% 1% 1%0.4% 0.1% 0%

1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Afton Alps

Welch Village

Hyland Buck Hill

Wild Mtn

Spirit Mtn

Mount Kato

Giants Ridge

Lutsen Mtns

Andes Tower Hills

Ski Gull

Buena Vista

Powder Ridge

Elm Creek Area

Coffee Mill

Mt Itasca

Chester Park

Other:

Overall Average Percentage of Respondents Who had Taken a Day Trip to a

Minnesota Ski Area within the Past 3 YearsYes: 92% No: 8%



The average number of people who travel together to their most frequently visited Day Trip ski area is 2.7 (median of 2.0).

Figure 12 Day Trip Characteristics

(Owned a Season Pass; Miles Travelled One Way; Number of People Normally Travel With)

On a scale of 1 to 5 where 1=”Poor Satisfaction” and 5=”Excellent Satisfaction”, respondents were asked to rate their level of satisfaction with several characteristics for their most frequently visited ski area for a Day Trip. Overall staff/customer service and ski school rated highest with an average rating of 4.2 each. Ticket purchase process, quality of grooming, and lift line waits were each above 4.0 as well. Childcare (3.4) received the lowest average rating of all the categories but still rated above “Neutral” (3.0).

57%

43%

9% 12% 11% 11% 13%10% 12%

21% 21%

32%

23%16%

5% 2%0%

10%

20%

30%

40%

50%

60%

70%

Yes No 1 -‐ 5 miles

5 -‐ 10 miles

10 -‐ 15 miles

15 -‐ 20 miles

20 -‐ 30 miles

30 -‐ 40 miles

40 -‐ 50 miles

More than 50 miles

1 2 3 4 5 6 to 9

Owned Season Pass to Most

Frequently Visited DAY TRIP Ski Area within Past 3

Years?

Miles Travelled ONE WAY for DAY TRIP Number of People Normally Travelled for DAY TRIP

Overall Average Overall Number People Travelled With You to

Day TRIP Ski AreaAverage: 2.7Median: 2.0

Overall Number Miles Travelled One Wayto DAY TRIP Ski Area




Figure 13 Satisfaction Ratings for Most Frequently Visited Day Trip Ski Area

Destination / Overnight Trip Visitor Profile

With the definition of a Destination / Overnight Trip as “a trip to a ski area involving at least one night away from home”, forty-‐eight percent of respondents reported they had visited a Minnesota ski area for a Destination / Overnight Trip within the last 3 years. Of the forty-‐eight percent who indicated visiting a Minnesota ski area for a Destination / Overnight Trip more than half reported visiting Lutsen Mountains (54%) most recently; followed by Giants Ridge (18%), and Spirit Mountain (16%). Each of the other ski areas had 3% or less of respondents indicate as their most recently visited Destination / Overnight Trip ski area.

4.2 4.2 4.1 4.1 4.1 4.0 3.9 3.8 3.8 3.8 3.7 3.73.4

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Overall Staff /

Customer Service

Ski School

Ticket Purchase Process

Quality of

Grooming

Lift Line Waits

Parking / Shuttle Service

Lift Quality / Uphill Speed

Variety of

Trails / Terrain

Level of Slope

Crowding

Quality of

Food

Quality of

Chalets / Building Spaces

Retail Shop

Experience

Childcare

Overall Average



Figure 14 Most Recently Visited Destination / Overnight Trip Ski Area

Respondents average over 200 miles travelled, one way, to get to their most recently visited ski area for a Destination / Overnight Trip. The average number of people who travelled together to their most recently visited Destination / Overnight Trip ski area was 4.5 (median of 4.0). One-‐fourth travelled as a pair (i.e. travel party of 2) and another one-‐fourth travelled in a group of 4. Two thirds of Destination / Overnight Trip respondents stayed 2 to 3 nights. One-‐fifth stayed only 1 night. The average length of stay for all Destination / Overnight Trip respondents was 2.6 nights (median of 2.0).

48%52% 54%

18% 16%

3% 2% 2% 1% 1% 0.5% 0.3% 0.3% 0.1% 1.4%0%

10%

20%

30%

40%

50%

60%

Yes No Lutsen Mtns

Giants Ridge

Spirit Mtn

Wild Mtn

Welch Village

Afton Alps

Buck Hill

Mount Kato

Powder Ridge

Buena Vista

Andes Tower Hills

Hyland Other:

Taken an OVERNIGHT TRIP to MN Ski Area in Last 3 Years?

Most Recently Visited DESTINATION/OVERNIGHT TRIP Ski Area in MN

Overall Average



Figure 15 Destination / Overnight Trip Characteristics

(Miles Travelled One Way; Number of People Travelled With; Number of Nights Stayed)

Similar to the Day Trip ski area rating scale, respondents were asked to rate their level of satisfaction with several characteristics for their most recently visited ski area for a Destination / Overnight Trip. Variety of trails/terrain rated highest with a 4.5 average rating; followed by quality of grooming (4.3), level of slope crowding, and lodging (4.2 each). Lift line waits, quality of chalets/building spaces, and ski school were each above 4.0 as well. Quality of food (3.8), childcare and parking/shuttle service (3.9 each) had the lowest average ratings.

Figure 16 Satisfaction Ratings for Most Recently Visited Destination / Overnight Trip Ski Area

4% 4%9%

25%

44%

7%

25%

16%

26%

9% 11%7%

20%

66%

10%

2% 2%0%

10%

20%

30%

40%

50%

60%

70%

1 -‐ 50 miles

51 -‐ 75 miles

75 -‐ 100 miles

150 -‐200 miles

More than 200 miles

1 2 3 4 5 6 to 9 10 or More

1 night 2 -‐ 3 nights

4 -‐ 5 nights

6 -‐ 9 nights

10 or more nights

Miles Travelled ONE WAY for DESTINATION/OVERNIGHT TRIP

Number of People Traveled Number of Nights Stayed

Overall Average

Overall Number People Travelled With to DESTINATION TRIP Ski AreaAverage: 4.5 Median: 4.0

Overall Number Miles Travelled

to DESTINATION TRIP Ski Area

Average: 201 Median: 200

Overall Number Nights Stayed at

DESTINATION TRIP Ski AreaAverage: 2.6 Median: 2.0

4.54.3 4.2 4.2 4.2 4.1 4.1 4.1 4.0 4.0 3.9 3.9 3.8

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Variety of

Trails / Terrain

Quality of

Grooming

Level of

Slope Crowding

Lodging Overall Staff /

Customer Service

Lift Line Waits

Quality of

Chalets / Building Spaces

Ski School

Ticket Purchase Process

Lift Quality / Uphill Speed

Parking / Shuttle Service

Childcare Quality of

Food

Overall Average



Additional Economic Benefits Employment Value (Wages and Salaries)

An important contribution to the economic value of an industry is the wages, salaries, and benefits paid directly to employees. This money is typically spent directly in the local area on

personal expenses like rent, food, clothing, transportation, recreation, and entertainment. In the case of the alpine ski and snowboard industry in Minnesota, the majority of employees live within 25 miles of the ski area, meaning that such purchases predominantly remain within the local area. Thus, quantifying the wages, salaries, and benefits is important in this analysis.

Models can show the total number of jobs and wages paid because of the presence of the ski and snowboard industry in Minnesota. These figures encompass employment at ski areas directly and employment at businesses that benefit from the off-‐mountain visitor spending discussed above. Using standard ratios of jobs to sales and wages to sales results in the figures presented in Table 9below. Total jobs are 8,024 and total wages/income is $140.4 million.

Table 9 Total Jobs and Wages, 2012/13

Direct effect Secondary

effect Total effect Sales (output) $231,903,288 $169,289,401 $401,192,689 Jobs / $1M in sales (approx.) 20 20 20 Jobs 4,638 3,386 8,024

Sales (output) $231,903,288 $169,289,401 $401,192,689 Income:sales ratio (approx.) 35% 35% 35% Income $81,166,151 $59,251,290 $140,417,441



In terms of employment generated directly by the alpine ski and snowboard areas, the estimate is that these businesses directly employ 3,681 people total.

Table 10 Total Direct Employment at Ski Areas, 2012/13

Full Time

Employees Part Time Employees

Total Employment

TOTAL 268 3,413 3,681

Capital Investment Value

Another major component of economic value in the alpine ski and snowboard industry is the level of capital investment that ski areas make in any given year. Many of the ski areas in the state have continued to make improvements with new lifts, hotels, lodges, parking lots, ski terrain, and other facilities. Capital improvements go beyond chairlifts and upgraded snowmaking systems, and extend into summer attractions and amenities as well. These improvements have an important value to the economy that would otherwise not exist, often employing contractors and other businesses to do the work. Therefore, capital spending is included in this report. Because of the long-‐term nature of these capital investments, an argument could be made to include spending amounts from two and even three years prior in the economic value analysis. The three-‐year total estimated capital expenditures for ski areas in Minnesota is $14.3 million. However, this report is focused only on the 2012/13 season and therefore only includes one year of capital investment. The capital investment for all ski areas for 2012/13 was $6.6 million.

Table 11 Total Capital Investment, 2012/13

Total Capital Investment

TOTAL CAPITAL INVESTMENT $6,617,180



Charitable Contributions

Ski area businesses support many local charities and non-‐profits through hosting fundraisers, donating cash or in-‐kind services, and donating to auctions and other fundraisers. In total, ski area businesses in Minnesota are estimated to have donated $298,157 worth of donations (cash and in-‐kind) during the 2012/13 fiscal year.

Table 12 Total Charitable Contributions, 2012/13

Total Donations Special events/festivals $43,735 Local business development $27,812 Local non-‐profit/charitable $159,852 Other local contributions $66,757 TOTAL DONATIONS $298,157

Other Benefits

The presence of the ski resort industry in Minnesota has many other benefits not included in the direct economic value analysis presented above. This section briefly describes some of these non-‐monetary benefits, which exist but are difficult to accurately quantify. Quality of Life Impacts Overall, alpine ski and snowboard resorts have a positive impact on the quality of life in the parts of the state in which they operate. They provide a sense of community, civic pride, something that local residents identify with and are a part of, and other intangible benefits. An appreciation for natural beauty and learning about habitat is also enhanced through the skiing experience. Health and Wellness Benefits Skiing and snowboarding provides one of the few opportunities for outdoor recreation during the winter, a season in which many people stay inside and exercise less. All participants, from kids to Baby Boomers and beyond, reap positive health benefits from skiing and snowboarding. The importance of providing opportunities for exercise cannot be overstated, especially as more Americans become overweight and obese. Ski areas in Minnesota provide the opportunity to get outside in the winter and get exercise, fresh air, and a release from day-‐to-‐day stress. Again, the winter season has more limited opportunities for outdoor exercise, so the presence of ski areas is an important factor in keeping Minnesota residents healthy.



Events and Exposure Media coverage of events at ski areas provides terrific promotional and branding exposure that is worth much more than the events themselves cost. Many ski areas in Minnesota host events, races, competitions, tournaments, and other organized activities that generate media coverage and excitement for the sports of skiing and snowboarding.

About RRC Associates

RRC Associates is a multi-‐disciplinary consulting firm providing market research, consumer intelligence, strategic analysis, and community/land planning services. RRC specializes in collecting and analyzing customer feedback for a variety of public and private clients nationwide and internationally, particularly in the tourism and recreation fields. Research techniques we utilize are customized to clients' needs, but often incorporate web-‐based surveys; national and regional panels; intercept, telephone, and mail back surveys; and/or focus groups. RRC Associates also operates a full service focus group facility specializing in qualitative research, the Boulder Focus Center. RRC is the leading consulting and market research firm in the alpine ski and snowboard industry and tracks many statistics and figures for the industry throughout North America. RRC publishes annually on behalf of the National Ski Areas Association (NSAA) the Kottke End of Season Report, the National Demographic Study, and the Economic Analysis of US Ski Areas, three industry reports that track patterns of significance related to operational, demographic, and financial information, respectively. The firm also collects national figures for the ski resort industry in Canada, giving us an unprecedented depth of understanding of the North American ski and snowboard industry. Principal areas of focus by RRC Associates include the ski and snowboard industry in particular, and the travel, tourism, and recreation industries generally. In these subject areas the firm is considered national experts and are frequently quoted and contacted for information concerning trends and opportunities. RRC also provides consulting services in real estate feasibility and market demand analysis, financial consulting and modeling, data base management, competitive analysis, customer demographic profiling, and customer satisfaction/loyalty assessments. Additionally, RRC provides a wide range of community planning, land planning, public processing, and affordable housing studies for a variety of public agencies and communities as well as private entities.

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