My friend Dick Deustch has a unique perspective on the golf and skiing industries. Over a successful career in both leisure pursuits, first as a principal in the former St. Louis based firm, Golf Quest and more recently as a principal with Peak Resorts (since acquired by Vail Resorts), he is in a position to understand where the ski industry gets it right and golf can learn a few tricks and benefit from his insights. He’s also both an excellent skier and golfer, understanding both from the participant perspective. Recently, I had the chance to ask Deutsch some questions, having done numerous appraisals and studies for him over the last 25+/- years about some of the things the golf industry could learn from skiing.
As an industry, Deutsch sees golf as oversupplied in most locations while the supply/demand balance for skiing is at equilibrium. He also sees ski areas as a more efficient use of land, in several ways. First, a (smaller) ski area of similar acreage to a golf course is able to host many more participants in a given day than a golf course, which is limited by the number of tee times. Additionally, there is flexibility in that ski areas can sometimes build out smaller portions of the mountain first and expand as demand grows. Combined with the fact that ski areas require steep terrain and are often in more remote locations, the land is typically less costly to acquire. Skiers are normally more willing to drive a longer distance to ski, even for a day, than golfers in most cases.
The ski market is considerably smaller than the golf market. While golf in the US has an estimated 25.6 million on-course participants (as well as 27.9 million off-course), according to NGF, the National Ski Areas Association (NSAA) estimates 10.6 million skiers and snowboarders, nationally. Compared with nearly 16,000 golf courses in the US, there were only 473 ski resorts operating in the US at the end of the 2021/2022 ski season. That works out to approximately 1,600 golfers per course and more than 22,000 skiers per resort. Economically, the efficiency is obvious. Key to both golf and skiing is location near population centers. Deutsch says that skiers will travel up to 2 and a half hours for a day trip while beyond that it becomes an overnight multi-day destination.
Efficiency is an area where Deutsch feels golf can most definitely learn from the ski world. He says: “I think golf operators can learn about efficiency from the ski industry. While the ski industry is not perfect, ski area operators are very good at getting skiers out on the snow, getting lift lines to move, and getting people through their food and beverage facilities. A golf course when it’s crowded will be a many hour commitment.”
When I asked Deutsch about the risks of running a ski resort as compared to a golf course, he said: “I would say the risk would be greater running a ski area both from a weather and injury perspective. However there are ways to mitigate those risks and the rates of return are much greater in the ski industry versus the golf industry.” He also added that there is a greater reward in that “most ski areas bring a greater amount on a percentage basis of gross revenue to the bottom line than does a golf course.” Climate change is a significant risk consideration and when I asked what the ski industry is doing to combat climate change, Deutsch said “Obviously climate change is a serious issue in the ski industry. I think most ski area operators are dealing with it by having as much snowmaking capacity as possible.” This, of course is also a function of the availability of water, a significant challenge or potential challenge to both industries. Mitigating these risks can be achieved by having large amounts of water available, keeping up with technology and being properly insured for injuries.
Like golf courses, ski areas combine numerous functions, including “farming” (turf maintenance), food & beverage, retail, marketing, operations, etc. Deutsch notes that: “A ski area does require all of those same skills but to a much larger extent. Skier visits per property tend to dwarf the amount of golf rounds per property in a given year. While golf courses certainly farm land remember ski areas farm snow.” Of course, ski areas (like golf courses) are also hospitality enterprises. Patrons and members expect to be treated well and made to feel welcome at both.
Interestingly, Deutsch feels that the ski industry can learn from golf about playing/ski conditions. He says: “Most golf courses that I’ve played in the last few years have been well maintained. Ski area conditions can certainly be variable and ski operators must upgrade their properties to produce the best possible product that the weather will allow.“
Deutsch considers ski resorts to be better investments than golf courses because they typically produce higher cash flows. While golf has an inherent inefficiency limited by how many golfers can play on any course in a given day, ski areas make much better use of the land resource by being able to accomodate more people. That said, the threat of climate change to the ski industry can’t be overstated, especially in those areas reliant on sub-freezing temperatures for snowmaking. As Deutsch says, skiing is very culturally inclusive, but like golf is also an expensive sport to pursue, and that the cost to participate likely limits diversity in both sports. While golf can sometimes, in some places be “stuffy”, the ski industry almost always presents an environment of hospitality, family friendliness and relaxed atmosphere not always present in golf.
What can the golf industry learn from the ski industry? Both golfers and skiers alike crave uncrowded conditions, which can be contrary to profitable operations. Where skiing prevails here is the ability to put more people in a smaller space which golf can’t due to the safety considerations from flying golf balls. TopGolf has figured this out and created a ski-like social environment in a limited space. Golf courses can often increase their capacity to generate revenue by either building or enhancing practice facilities making them more attractive to a wider audience. We’ve recently been working with one client to analyze the potential economic impact of enhanced practice facilities with modern technology. While golf equipment is usually available for rent at many facilities, the ski industry has not only made it available, but often preferable to rent equipment onsite, and made that a profitable business. Ski areas typically make money in food and beverage. Golf courses often do not. While not always offering fine dining options onsite, ski areas provide F & B to more people, more efficiently and make a profit. Is fine dining a required element of a golf course or club?
The ski industry also typically has onsite hosts or hostesses providing a variety of services to patrons. Golf courses typically have a starter who reads players a list of rules, shows them the first tee and he (or she) is done. If the pace of play is monitored at all, it’s usually by someone who seems more concerned about avoiding conflict than pushing slowpokes along. Ski areas have the National Ski Patrol who monitor skiers for safe practices and assist when needed in the event of an injury. National Golf Patrol anyone?
The ski industry does many things right. The golf culture, to some degree and logistics may preclude variations of some of these practices at golf courses and clubs, but some could be implemented to make golf courses more efficient, more profitable and more enjoyable for the golfer.