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With what may be the first-ever 60-million visit total this year, we are tempted to congratulate ourselves on a big success. But is this number really all that great? The base of skiers remains small, and with the shrinking income of the middle class, growth could be difficult.

Having spent my entire life in the ski industry, the first half in France and the second half in the U.S., I cannot help but make comparisons between the two countries. For our purposes, I’d like to focus on the most striking difference between the U.S. and French ski markets: they had a similar growth rate from the 1940s until the early 1970s, then U.S. growth stalled as it kept climbing in France (Fig. 1).

We can measure the popularity of skiing and riding in several ways. The most relevant is market penetration, the ratio of domestic skier/boarder visits in a country to its overall population. For example if a country has a population of 300 million and its resorts received 60 million “domestic visits,” the ratio is 0.20 per capita visit.

In this discussion, domestic visits—rather than overall visits—are the real focus. France realized 56 million total visits during the 2005-06 season, 43.3 million domestic visits and 12.7 million foreign. For the same season, the U.S. realized 58.8 million visits, including 55.6 million domestic visits and 3.2 million foreign visits.

The ratio of domestic visits to population shows that France generates four times as many visits, per capita, as the U.S. France, with a population of 59 million, achieved a 0.735 per capita domestic visit. The U.S., with a population of 300 million, has a 0.185 per capita domestic visit.

Now, let’s look at the evolution of the domestic per capita visits for the U.S. and France over time. Three dates tell the whole story. Just after World War II, both countries had hardly any skiing activity to speak of. In the 1970s, both countries had very similar domestic per capita visits in the 0.20 to 0.25 range: 15 million visits for France, and 48 million for the U.S. But since then, per capita visits in France have continued to rise, while they have stagnated in the U.S. The graph (Fig. 1) illustrates the evolution of per capita visits for both countries.

The Gini indexes show the distribution of wealth in the two countries (the lower the index, the greater the income equality and the broader the distribution of wealth—more on this later).

Of course, income is just one of several factors that influence the popularity of skiing and snowboarding in any given country. Other factors include:

• availability of sufficient facilities
• proximity to population centers
• available time (for destination skiing)
• disposable income/affordability of the activity
• transportation
• winter sport culture

I always thought that the U.S. and France were pretty even on all these factors except for available free time. In this, France enjoys a significant advantage over the U.S. for recreation in general and winter sports in particular. In France, five weeks paid vacation is the law, and workers must take at least one of these weeks during the winter. The U.S. is at the very bottom of the ladder when it comes to free time (Fig. 2, this page).

But this difference does not explain why the per capita ratio of visits was equivalent in both countries up to the early ’70s, then kept growing for France but stagnated in the U.S. For this, the Gini Index provides a better explanation.

The Gini Index, developed by the Italian statistician Corrado Gini in 1912, expresses the degree of income distribution in a given country. A low Gini Index means that the income is somewhat evenly distributed, and a high index that the distribution is uneven. An index of 0 percent means that everybody has the same income, and an index of 100 percent means that one person receives the total income of the country.

Large differences exist between countries. The Scandinavian countries and Japan have the lowest Gini indexes (22 percent to 25 percent), while some countries in Africa and South America have the highest (60 percent to 75 percent).

More to the point, a low Gini index means a large middle class, which is one of the prerequisites for a country to enjoy a large skiing population.

This analysis suggests that the shrinking real income of the middle class is holding back the growth of skiing and riding in the U.S. If we look at the representation of the Gini Indexes in Fig. 1,, we can see that they evolved in opposite directions for the U.S. and France. The U.S. had a strong middle class after World War II, but the situation has been degrading ever since. For France, the evolution has been exactly in the opposite direction. When the two curves crossed each other in the mid ’70's, the U.S. stopped growing and France kept climbing. This is not mere coincidence.

The Gini Index suggests that the shrinking middle class, or more precisely the shrinking disposable income of the middle class, might be the most significant problem for the U.S. ski industry. If so, that has great implications for how the industry must set its course for the future.

The evolution of a U.S. family budget has dramatically changed over the last few decades, with a larger and larger share spent on health care, education, housing and transportation, and a diminishing amount of disposable income available for recreation.

Many U.S. industries have been able to adapt to the new situation, largely by cutting prices. In retail, department stores such as Sears and Montgomery Ward have been replaced by Kmart and Wal-Mart. Such adaptation has not been feasible in the ski industry, with one exception: tubing.

At the same time, the cost of doing business for a U.S. resort, from grooming and detachables to snowmaking and environmental requirements, has escalated. Skiing is relatively more expensive today, in constant dollars, than it used to be.

With the reduced pool of potential customers and the fierce competition among them, U.S. resorts have evolved toward a more sophisticated (and expensive) product and, at the same time, away from the bulk of their prospective customers. The middle class of the 1960s, which represented a big pool of potential skiers, has been replaced by a middle class with less disposable income, for whom today’s U.S. resorts are out of reach.

Most European resorts, including French resorts, follow a different model. Mountain infrastructures are well developed, but the level of service is quite below what you find in a U.S. resort. More automation is used, to reduce personnel costs. Most European lift operators do not own ski schools, rentals, food and beverage, and other departments. Ultimately, the European ski industry enjoys two main advantages over the U.S.: a true middle class with more disposable income, and a more affordable end product.

I should add that despite the creativity and efforts of the U.S. resorts, the resort holdings and the NSAA, we still have lost market share over the last three decades. During that period, the U.S. population grew by 35 percent (222 to 300 million) but total skier/boarder visits (we don’t have a domestic/foreign breakdown for the 1970s) grew by only 19 percent (49.3 to 58.9 million). This corresponds to a reduction of 12 percent in per capita visits (.222 to .196).

Of course, the shrinking buying power of the middle class is not the only consideration for per capita visits, as noted earlier. Regardless of the financial aspect, only a small percentage of the population might choose to go skiing or riding in any given year. Countries such as Austria and Switzerland, where availability, access, proximity, income, and free time are high, record a little over 2 per capita visits a year. With an average of 9 visits per person a year, this means that about 22 percent of the population of these two countries choose to ski in any given year—the highest figure worldwide. In France, with less proximity, 13 to 14 percent of the population skis or snowboards; in the U.S., the figure is around 4 percent.

It seems likely that income inequality is one of the biggest factors holding back winter sports. A hypothetical question we will never know the answer to could be: If the U.S. had maintained a large and comfortable middle class (Gini Index in the mid 30s or below), would U.S. resorts have, say, .6 per capita visits instead of .2—and be doing 180 plus million visits?

The Guest Editor’s Take
Alain Lazard suggests an interesting theory. I would question whether it is a robust French middle class that contributes to greater per capita skier volumes in France or the more socialistic approach of French culture, which places more emphasis on "life" in the work/life equation.

With a strictly enforced 35-hour work week and significantly more holiday and vacation time in France, one might also conclude that time poverty has not found its way into the French lifestyle to the extent we have experienced it here in the United States. U.S. leisure activity and travel research over the past decade identifies time as the number-one limiting factor in Americans' participation in leisure travel and recreation. Given that dynamic, the U.S. ski industry has done a good job of increasing skier days by 10 to 15 percent during the past decade.

—Bill Jensen