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Resorts hope skiing won't go downhill

01-21-2012 14:01 BJT

By Meng Jing (China Daily)

BEIJING - If the magic of the snow does not pull them in, it seems you have to start looking for other ingredients. Duolemeidi Mountain Resort, one of China's most modern and advanced ski resorts, is providing its visitors with accommodation from this month in an attempt to offset its financial losses in the ski business.

The resort, in Zhangjiakou, Hebei province, has not turned a profit for its Italian investors since it opened in 2006. A lack of real snow, bad weather and China's lack of a ski culture make the country a difficult proposition, said Fabio Ries, co-founder and chairman of the board of Duolemeidi Mountain Resort.

Duolemeidi is not alone in this predicament. Only a handful of China's 20 big ski resorts are in the black, the Chinese Ski Association says.

But instead of packing up their skis and heading home, more and more resort developers are betting on the formula b+b=s, where the "b"s stand for "bigger" and "better" and the "s" stands for "success".

Ski resort developers in China are betting on the formula of "bigger" plus
"better" equals "success" as they look forward to the sector taking off.
[Photo / China Daily]

The logic behind the equation is that the growth of China's ski industry coincides with the expanding economy, and with more wealthy Chinese pursuing a healthy lifestyle and recreational holidays, the future of China's ski resort market can be only one thing: sensational.

Next to Duolemeidi Mountain Resort, VXL Capital Ltd, one of Malaysia's leading investment companies, is building a mega project called Secret Garden, and the company wants it to become to China what Whistler, the colossal ski resort in British Columbia, is to Canada.

The first ski slope at the Chinese resort, two hours' drive from Beijing, opened this winter, but the project of 82 ski slopes is not due to be completed for another 10 or 12 years, with investment of more than $1.5 billion.

Dalian Wanda Group, one of China's largest property developers, is also a strong adherent of the theory. "If you build it, they will come". The group, leading five other Chinese investors, including Lenovo Group, the world's second-largest personal computer maker, is spending 20 billion yuan ($3.2 billion), building a vast ski resort in Changbai Mountain, in Northeast China's Jilin province.

The resort features 43 slopes with a skier capacity of 8,000, and is expected to be the largest in China when it opens late this year.

Beidahu Ski Resort, also in Jilin province and one of China's largest ski resorts, with skier visits of 67,000 in the 2010-11 season, is also expanding, with new ski slopes, hotels and condo units, even though the resort has not turned a profit since its new developer took over in 2009.

Liu Xiaoshan, chairman of the board of the Qiaoshan Group of Beijing, which is developing the Beidahu resort, is confident about the prospects.

"The development of the leisure industry moves into top gear when a country's per capita GDP reaches $3,000, which China has already achieved. Experiences from other countries all demonstrate that."

In the US, just 2 million people visited ski fields in 1962, but by the 1980s that figure had climbed to 50 million, he said. In Japan, the rise in the sport's popularity was almost as phenomenal, a 20-fold increase in visits being recorded between the 1970s and the 1990s.

"All kinds of statistics show that China's ski industry is about to take off. China is the largest market for cars and will soon be the largest market for luxury goods. Why can't it become the largest market for skiing?"

The Chinese Ski Association said there were just 20,000 visits to the country's ski fields in 1996. By 2010, that figure had risen to 10 million, a 500-fold increase. The association estimates the number will have doubled to 20 million by 2014.

However, Ries of Duolemeidi Mountain Resort, in which Italy's largest ski resort operator, Dolomiti Superski, has a stake, said the number of China's skier visits can mislead.

"The skier visits may be 10 million but the number of active skiers is probably less than 5 million. And the number of dedicated skiers in China is far fewer than that. Many Chinese go to ski once in their life, get an experience and never come back."

Ries decided to open Duolemeidi because in the early 2000s there was no decent resort in China for an experienced skier like him.

Skier visits in Duolemeidi are said to be increasing steadily every year, but the growth rate is a lot lower than investors had envisaged. According to their plan, Duolemeidi was supposed to have seven lifts and 14 ski slopes before the 2011-12 ski season, but there are only four lifts and 10 slopes.

"There are not as many skiers in China as we expected," Ries said, adding that unlike European countries with 100 years of skiing, China has no ski culture.

Figures from the International Report on Mountain Tourism, issued last year by Laurent Vanat, an independent ski industry analyst in Switzerland, show that even with a small population of about 64 million, average annual skier visits in France over five years exceeded 54 million, the most of any European country.

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