Despite the marketing power of the 2002 Salt Lake City Games, poor snow and the events of 9/11 meant that resort visits in the US were substantially down this season.

The previous record visits, however, and good snowfall resulted in significantly improved financial performance at most US. resorts, according to the National Ski Areas Association (NSAA) 2000/01 Economic Analysis of Ski areas.

In all regions of the States resorts witnessed double-digit growth in gross revenues, improved operating profit margin and pretax profit.

Gross Revenue -- On average, total revenue grew by 14.5% to $20 million per resort.

Overall Profitability Jump – Operating profit averaged $4.5 million per resort, of 22.7% of revenue. Pretax profit and pretax profit margin also improved; the industry average for pretax profit margin was 7.1% nationally, up from 0.3%.

Regional Profitability Patterns – Despite overall success, there were pockets of struggling resorts. Specifically, the two mid-sized resort groups in the Rocky Mountains and the smaller mid-sized areas in the Pacific West were at best marginally profitable at the pretax level. This represents the second consecutive year that resorts in these regions had difficulties.

Inverse Relationship Between Profitability and Size – Among profit margins, smaller resorts had larger margins. In fact, the smallest areas posted an operating profit margin of 25.7% compared to 22.4% recorded at the largest areas. The smallest ski areas in the country averaged a pretax profit margin of 15.3%, while the largest areas managed 5.5% profit margin. While the larger areas produce greater levels of pretax profit in actual dollars, they are clearly not more efficiently turning top line revenues into bottom line profits.

Stable Makeup – Makeup of resort revenue and expense was generally stable with several noteworthy trends. The proportion of total lift ticket revenue, which had been declining, appeared to have stabilized at 46.4% nationally, up just slightly from 45.7%. After lift tickets, food/beverage, accommodations/lodging and lessons were the most important contributors to overall revenue. Reduction in interest payments and flat depreciation charges, combined with overall management of other expenses, contributed to a greater proportion of expenses remaining as pretax profit

[Details from The National Sporting Goods Association (www.nsga.org), prepared for the National Ski Areas Association by Nolan Rosall and David Belin of RRC Associates.]