Ski operators snug with sky-high prices

FANCY a nice carton of hot chips for $11.50? How about a $5 cappuccino, after you’ve forked out $110 for a ski pass for the day and queued for half an hour to get on a chairlift?
Nanjing Night Net

Welcome to Thredbo, Australia’s most exclusive ski resort where the prices make Toorak and Double Bay look like a $2 shop. We stand to be corrected on this but the Australian ski fields are quite possibly the most expensive places in the world, and not just ski places, but places full stop.

You won’t pay $100 a day for a lift ticket in Aspen, Zermatt or Chamonix – or $17.70 for a second-rate chicken burger and Coke at Whistler. But that’s what you’ll pay at the cafeteria at Blue Cow in Perisher.

Victorians are slightly better served on prices, although day tickets at Falls Creek and mounts Hotham and Buller still hover around $100. But at Thredders, they take the cake. This is where the elite of Sydney come to play, and pay, pay for the pleasure of going up Crackenback on a 30-year-old chairlift verging on the rickety.

And they joke about it, happily whining about the old T-bar at Antons. Any self-respecting resort in Europe or the US boasts a capsule on their chairs these days, protection from the wind and, of course, cable cars for a nice warm trip up the mountain. None of that here.

Yet they come in their droves. Though this is no miracle of marketing – where second-rate facilities fetch super-premium prices – simply a captive market. Thredbo has the longest, steepest ski runs in the country. It’s a pretty village. And when the snow is good, as it was this week, and the wind dies down, it’s worth the while.

AMALGAMATED Holdings, the company that owns Thredbo, or the resort operator, Kosciuszko Thredbo, to be more precise, reported on Thursday. It showed a profit of $10.7 million, down from $15.17 million the year before.

Last year was not a great season for snow. And while it may not have upgraded the lift system, it does spend a bit on snow-making machines and groomers. The 29 per cent fall in profit before tax was due in part to a 7 per cent decline in the number of skiers, the results commentary said.

Apart from that, the commentary didn’t say much. It never does. And there is precious little financial detail. There have always been sensitivities between Thredbo’s patrician lodge community and the operator.

Besides, Amalgamated is a billion-dollar company that has done quite well in recent years, and the resort accounts for just 10 per cent of profits. Its hotel and cinema operations in Australia and Germany make up the bulk of the business.

One man, Alan Rydge, controls roughly 60 per cent of the stock. Rydge, who doesn’t court publicity, bought Thredbo from Lend Lease for $18 million in 1986 when he was 34. On a cursory poke around the internet we found his corporate headquarters listed simply as ”level 22, Sydney”. Love that.

He renegotiated the 50-year Kosciuszko Thredbo head lease with the state government in 2007. It seems that KT and Amalgamated Holdings had done rather well out of it before that, with leaks to this media outlet in 2004 indicating the resort had been paying National Parks and Wildlife annual rents as low as $8000.

Now that’s a bargain, but as the terms were always secret we can only surmise that it must have been based on a calculation of profits – and it may well have involved infrastructure spending on the part of the operator.

In any case, besides sunlight, the other great threat to Thredbo over the years has been its arch rival, Perisher. Although just up the road, they don’t share ski passes, or sympathies for that matter.

Perisher people tend to regard their nemesis as full of snobs, while the patricians of Thredders often deride Perisher as a bit flat, ugly and overrun with bogans who can’t ski properly. With 48 lifts compared with Thredbo’s 13, Perisher is far larger. It’s also higher, so the snow is often better. And it has really taken it up to its picturesque contender in the past few years, forcing Thredbo to finally counter with a restructuring and a marketing push.

Ironically, the prices are even a tad higher at Perisher, an adult day pass at $112 versus $110 for instance, and it boasts the same sort of extreme prices for very low-quality tucker.

But the move to bring four ski fields together – Perisher, Blue Cow, Smiggins and Guthega – all lift-linked and under one ski pass, has been a good one. Like the Victorian resorts, the lift systems are newer. Skiers have been streaming in. Still, you won’t find much financial detail here, either. It’s owned by the Packer family and housed in a private company. From time to time reports emerge that the resort is up for sale, with price tags ranging from $60 million to $200 million.

With the Packer casino interests humming in the past two years, the rumours seem to have died down.

Last year, Perisher went for the jugular, hitting its rival where it hurts – in the fat ski-pass profit margin – with a half-priced season pass. Thredbo countered with a half-priced deal of its own, and a management overhaul. Former ski champ and long-time general manager Kim Clifford has been replaced and new management is poised to go hard with a summer marketing campaign, perhaps trying to replicate the success the NSW wineries had with the George Benson tour.

Even if the summer marketing push fails, you get the feeling that Thredbo will still produce a good return, as it has all through the financial crisis. A tight rein on costs and the dedicated patronage of the seemingly price-immune, diehard skier should see to that.

This story Administrator ready to work first appeared on Nanjing Night Net.