The ski industry has been around since the beginning of the
century. Since that time the retailing industry of the ski world has
been on a steady increase.
At the beginning of this decade the
increase began to skyrocket. However, skiing was not the reason
for the growth. The reason for the dramatic increase in industry
sales in the retail world of skiing was due to snowboarding. By
now almost everyone in the country has either seen a snowboard,
ridden one, or knows someone who has. The purpose of this paper
is to discuss what snowboarding is, and to shed some light on the
financial aspects of this new sport.
Snowboarding hit the scene in 1972.
Jake Burton, at the age of 15,
decided that he had enough of skiing and wanted to do something
a little different. With a little ingenuity and some of his dad's tools
he began working on the first snowboard. His project lasted about
three weeks and when he was done he decided to take his
invention to the slopes and she how it worked. This was almost
the end of snowboarding.
Every slope Jake went to denied him
access, saying that they only allowed skis on the hills. Jake was a
very determined kid and this did not stop him. He began hiking
every backcountry trail he could find and he became quite efficient
at snowboarding. At the same time he continued to knock on all
the ticket windows at every resort but still had no success. He
decided that the only way he could prove his invention was
nothing more than a different version of a ski would be to make a
video of himself riding down the back country hills. This was no
easy task, keep in mind the year is 1972.
Jake was determined and
he met up with a guy named Craig Kelly who at the time was into
video production of skateboarding and skiing. Jake gave the sales
pitch and Craig bit hook, line, and sinker. The next week the video
was complete and Jake took it to all the resorts with Craig and they
pled their case. By this time Jake had made about a dozen more
prototypes of his snowboard and all his best friends were riding
them. Finally a small mountain, Okemo, said "O.K.
Jake you can
ride, but only during the week" This was all it took and from then
on almost anyone that saw this crazy kid zipping down the hill on a
wooden board with both feet strapped to it began to ask
questions. From that moment on Burton Snowboards, INC. was
created and is now the number one manufacturer of snowboards in
the world. (Burton 1988).
In the 1980's snowboarding was still not extremely popular and it
was very rare for a resort to allow it on the hills.
As the yuppie age
ended and the Generation X'ers began to get into skateboarding,
BMX bikes, bungee jumping, and roller blading, snowboarding
took off. By 1991 eight-five percent of all ski resorts allowed
snowboarders to share the mountains with skiers. (Gatlin 1993)
According to the same article over 73% of the people
snowboarding in 1991 were under the age of 25. This age group
typifies Generation X. Along with snowboarding came an entire
new image. Brad Wilson, the marketing director for Big Bear
Mountain in southern California summed it up well with this quote:
"It was kind of like the 1960's all over again, snowboarders dress
differently, they have different haircuts and they ride on this
different-looking board down the hill.
" (Feldman 1995). In an age
where being different is normal, snowboarding just seemed to fit
right in to the picture. Now, in 1996 only 3% of ski resorts do not
allow snowboarding. The resorts have realized that if they want to
stay in business then catering to snowboarders is one of the
easiest ways.
Many resorts have begun to add new trails to the
mountain just to accommodate snowboarding. Most of these extra
slopes have huge jumps, half-pipes, tables, trashcans, metal pipes,
and even cars for snowboarders to jump on or over. The most
important feature of these special slopes is the fact that skiers are
not allowed on them. The reason that many resorts have added
these snowboard parks is because of the problems between skiers
and snowboarders. (Feldman)
Roger Hauser, the director of Massanutten Ski School, said that
there were quite a few reasons the resort added the "snowboard
only" park five years ago. First of all, he said the mangers of the
mountain were taking a lot of "heat" from skiers because of all the
jumping and tricks the snowboarders were doing on the slopes.
He
said that when kids are doing tricks they are going to be falling
down, when they fall down people run into them. So the mountain
added the park and now limits snowboarders who want to do tricks
to use that slope. The rest of the mountain is still open to
snowboarders. Hauser said that since the park was opened there
has been a dramatic decrease in injuries between skier and
snowboard collisions. He also said that business has picked up
about 15% in the past five years, which he believes is attributed to
snowboarding.
Ski resorts are not the only place that business has picked up in
the past five years. The main area of financial growth is the actual
snowboard manufactures of snowboards. Currently there are 117
snowboard companies in the world. (Schacter) Of the 117 there are
five that hold 50% of the market. Burton is number one with an
annual sales of around 30million, Ride is number two, and three,
four and five are: Sims, Morrow, and Anthony. (Baker 1995)
Morrow and Ride have seen the most dramatic increases in the
industry since 1993.
The total current assets for Ride in 1993 were
$2,365,000 and in 1995 they were up to $37,139,000. Morrows total
current assets went from $6,607,000 to $31,179,000 in the same time
period. Net sales for both companies went up dramatically in the
past five years also. Ride has seen a net sales increase of 611.2%
while Morrow's sales have increase 74%. (These figures are
directly from the company records of both companies.
)
The cost of snowboards is one reason that sales have gone up for
these companies and it is also another reason for the popularity of
snowboarding as compared to skiing. If Joe Public sixteen-year-old
wants to start snowboarding he is going to need to get himself
some equipment. The average cost of a complete setup, which
includes a snowboard, bindings that hold the board to the feet of
the rider, and boots, costs around $450 according to Transworld
Snowboarding 1996 buyers guide. If the same kid would want to
set himself up with a ski package he would have to get the skis,
bindings, boots, poles, goggles, neon ski-outfit (required for
skiers), and multiple other flashy accessories.
The average cost of
a new ski setup is around $850 according to Ski magazine 1996
buyers guide. It is clearly cheaper to get into snowboarding. This
price advantage of snowboards over skis is much more attractive
to the average teenager who probably doesn't have much money
anyway. It is also more attractive to Mom and Dad to spend less
on a snowboard than skis.
Sepp Kobler, the manager of Freestyle Sports in Charlottseville,
said that five years ago snowboards and accessories accounted
for about 5% of all sales in the shop.
Now it accounts for close to
30%. Kobler feels that if it were not for the dramatic increase in
snowboarding he would have had a hard time keeping the shop
open. "Kids are into it, and so are there folks, its cheaper, its more
fun, and its easier to learn" says Kobler. A sales clerk at Bear
Mountain, Brian Almarez says that is extremely hard to keep the
hooded flannel shirts in stock.
Also, the baggy pants "fly out the
door faster than natty neon-colored ski wear." Almarez also states
that "you don't see too many snowboarders out there who aren't
making a fashion statement." (Feldman)
The final area of retailing that has reaped many positive benefits
from snowboarding is in the sales of lessons. The author, a
professional snowboard instructor, has seen lessons go up 50%
each year over the past three years at Massanutten. Considering
that a one-hour private lesson costs $30 this is a huge increase in
revenue for ski resorts.
Hauser, the Massanutten Ski School
Director, expects snowboard lessons to be on the rise this year."The rental shop has ordered about 150 new boards and we have
added a few more promotional events to keep up with the demand
for snowboarding" said Hauser. According to the Professional Ski
Instructors of America winter 1996 newsletter, every resort that is
P.S.I.
A. accredited offers both ski and snowboard lessons.Currently 35% of all beginner lessons at resorts are snowboard
lessons. (PSIA)
Snowboarding is currently in a huge growth stage. Even though it
came out in the seventies, the most dramatic increase the industry
has seen has been over the past 5 years. It is a sport that is
primarily appealing to Generation X.
The image that goes along
with snowboarding is primarily defined as original. Snowboarders
do their own thing, but nobody (except the occasional skier) seems
to mind. Snowboarders have brought a breath of fresh air to many
businesses. These businesses range from manufacturers of boards
and equipment all the way to ski schools that are offering lessons.Snowboarding is bringing large amounts of revenue to all of these
businesses.
There are a few primary advantages snowboarding has
over skiing such as: appeal to younger population, cost of getting
started, and current popularity. From all of the research here it
would be easy to assume this trend will continue to grow. The
current population is into extreme-sports and generation X is
continuing to grow. It would also be easy to assume that over the
next few years not only will there be an increase in the number of
people snowboarding, but there will also be an increase in the cost
of snowboarding equipment.
These factors will have positive
benefits on both the manufacturers of snowboards and the retail
stores selling the boards and equipment.
Sources
Baker, Molly (1995) "Snowboard Shares Zip Higher as Investors
Join in the Sport," Wall Street Journal, Dec.18, sec:C1
Burton, Jake (1988) "Burton: Now and Then," Burton Video
Productions, Burlington VT
Gatlin, L. Dana (1993) "Snowboarding boom begins to include the
older set," Christian Science Monitor, Jan. 15, p14.
Feldman, Paul (1993) "Snowboard Siege," Los Angeles Times, Jan.18, sec:A3
Hauser, Roger (1996) Personal Interview, Ski School Director,
Massanutten Ski Resort, Harrisonburg, VA Nov. 6.
Kobler, Sepp (1996) Personal Interview, Manager, Freestyle Sports,
Charlottesville, VA Nov. 5.
Morrow Snowboards Inc.
, Company Records, 2600 Pringle Road
South East, Salem OR 97302
Ride Inc., Company Records, 8160 304th Ave. Southeast, Preston
WA 98050
