Product and Service

Companies included in ski resort sector in membership club and participant sport centers industry primarily own and operate ski resorts earning revenue from lift tickets, food& beverage, lodging, and rentals.

 

Demand for Product and Service

As indicated by the typical company data, the demand for ski resort has been increasing gradually in the past several years. The increased demand has been driven by positive changes in macro-economy and demographic/housing factors.

The Sector

Sector’s Current, Trend, Causes behind trend, and Future

Current and Trend
  1. It seems that the demand for ski resort in US market has been stabilized and picking up since 2016. However, there are still no solid proofs of organic growth in visits.
  2. Companies in this sector have inclined to raise price of service as demand turned to be stronger.
  3. Accompanied with increased revenue per visit, increased operating expenses (including labor costs) seem to be delaying improvement of companies’ profitability.
Causes behind the trend
  1. The upward trend in this industry may be consistent with what is happening in other entertainment and leisure industries, which should have been driven by improvement in economy situation and thus spending in leisure activities.
  2. Favorable weather condition in the past several years may contribute the revenue growth of companies in this sector.
Industry Future
  1. As upward trend in this industry continues, companies may be able to continue to see growth in their revenue as macro economy recovers gradually.

Numbers

General Financial Performance of Companies In the Sector

It seems that the demand for ski resort in US market has been stabilized and picking up since 2016 as indicated by increased visits and revenue of those companies in this sector and their ability to raise price of lift. However, we think we still need further data to confirm that the growth in visits and revenue has come from general increase in demand.
It seems that the growth in revenue in some typical companies in this sector may have been driven by longer season in the past two years. We have seen the shrinking gross margins and EBI/sales ratio from those companies and thus profit. The typical gross margin is about 12% in 2018, SG&A is about 4%, operating margin is about 8%, and EBI/sales is about 4% in 2018.
The typical enterprise price/EBI (adjusted with tax field) ratio is 55.

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