Mountain tourism: what challenges for supply and demand?

At a time when French resorts with their 53.7 million skier days per year attract many international clientele, and smaller and smaller volumes of French clients, MKG Hospitality takes a look at the major recent trends of mountain tourism in France in a detailed study. Among the highlights are the contrasting trends for domestic and foreign clientele, the drop in demand for ski vacations, while demand for accommodations is up slightly, as well as the different characteristics of the supply of commercial accommodations in the mountains that is dominated by tourist residences and furnished rentals.

Strong international demand, domestic clientele down

French resorts report a high proportion of foreign clientele on their slopes - representing more than 30% of skier days realized, which is nonetheless a smaller share than that recorded by ski destinations in Europe such as Austria and Switzerland, or more than half or even two-thirds of all skier-days generated by international clients, although this very high share may be explained in great part by the weight of nearby Germany and the relative size of the respective markets. Behind these two markets, French resorts are some of the most international worldwide.

The presence of domestic clientele is also strong and still accounts for the majority of mountain resort clientele, even if this figure has diminished in recent years. The number of French skier days thus fell in 2012 and 2014 and stagnated during the previous decade, even if data from the MKG study shows clearly different trends from one range to the next, and between the Northern and Southern Alps. More generally, the French market share has shrunk in regard to stays in the mountains for personal reasons, especially at ski resorts. Between 2008 and 2012, the number of stays and nights realized in mountain resorts posted the strongest drop regardless of type of accommodation to the benefit of short city stays and foreign travel, which are both developing. In fact, this depressed economic context combined with the increasing costliness of skiing has caused the clientele group to be increasingly well-to-do. Higher socio professional categories (managers, independent professionals) are thus more present at mountain resorts than at other holiday destinations.

Inversely, at the same time some foreign clientele arrivals are increasing. More than one-third of skier days are accounted for by the British, and thus have a strong impact on French ski resorts. While their presence shrank during the crisis, British travelers, driven by a healthier economy, began to make a comeback in the 2013-2014 season. If this trend continues the weight of British clientele is such that it would have repercussions on the entire market. Russians represent less than 5% of clientele, but show double-digit annual growth on the recent period, even if the 2014/2015 season could mark a temporary pause in this trend, because of an unfavorable geopolitical and economic context, with the fall of the euro and the Ukrainian crisis.

Demand for skiing is down but it is up for accommodations

Most of the 26,500 hectares of ski areas in France are located in the Alps, which also host 86% of total skier days in France particularly thanks to the presence of the largest resorts in the country (read article). While the number of skiers on French slopes has been generally stagnant or on a downtrend in the past decade, the Alps, which have a particularly strong presence of foreign clientele, is the range that does the best. Nonetheless the biggest French resorts have not been spared by the decline during the crisis years: from 2009 to 2014, eighteen of the top thirty resorts in all the ranges saw a drop in their number of skier days.

Despite these downtrends on the ski slopes, the global number of nights realized in the French mountains is following a stable or positive trend. In the Alps, the number of nights progressed more rapidly than the number of users on the slopes between 2005 and 2012. This apparent paradox between a drop in skier days and growing demand for accommodations may be explained by the diversification of activities at the resorts, which are trying to look like more than just a ski destination. Recent investments made by the resorts partly concern the improvement of infrastructures and skiable areas, but also increasingly the realization of new leisure equipment to enrich the options (read our article).

The increase in number of nights logically benefits accommodations in the mountains, particularly since the weight of foreign clientele is more important at commercial accommodations. This proportion varies from one season to the next: higher in the winter when foreign travelers arrive for winter sports, but also in the summer. The three primary nationalities - English, Dutch and Belgian - across all types of accommodations remain the same as those in the winter. Russians are proportionally more present in commercial accommodations than on the slopes, making them the fourth foreign clientele with the strongest growth in the past 5 years. This market is now ahead of more traditional clientele such as Germans.

Tourist residences: iconic alpine accommodations

Tourist residences: iconic alpine accommodations

Commercial accommodations represent a minor share of the accommodations supply in mountain regions. In France's mountain areas (both resort and non-resort areas) there are more than 5 million beds, 1.6 million of which are in resorts. Around three quarters of resorts have non-commercial accommodations, meaning secondary residences, with a share of beds that remain empty and are not available for rent. Tourist residences rank first or second in terms of commercial accommodations along with furnished apartments, depending on the department, while traditional hotels only represent a share equivalent to that of holiday complexes and camp grounds (less than 4% of beds). At resorts in the stations in the Upper Savoy, furnished rentals often constitute a higher volume of the supply than that of residences, while the inverse may be observed in Savoy. The supply of residences and hotels, accounting for more than 80% of properties in the Alps, developed in very different ways across the decade.

Being leisure destinations, mountains, like coastal areas, have been favorites for developing tourism residences, a kind of accommodation that originally targeted leisure clientele. The residences adapted to the profile of resort clientele: family clientele or clientele arriving in groups for the week, seeking several fully equipped rooms for their stay. Encouraged by tax measures, this type of accommodation experienced-double digit growth in supply in the mountains between 2007 and 2013,while the hotel supply fell drastically during the same period. Residences are mostly in resorts, whereas hotels are mostly located outside the resorts.

The hotel industry corresponds mostly to a traditional, independent, generally small-hotel supply. Hotel chains are not very present in mountain areas, and post the weakest penetration rate compared to other types of destination. Inversely, the residence market appears well structured, dominated by different chains, at the top of which may be found major operators that are present in all types of destinations -urban, mountain and coastal- with their different brands: Pierre&Vacances with Pierre&Vacances and Maeva, and Odalys with Lagrange. Certain, more modederately-sized actors have also chosen to operate properties exclusively in the mountains, such as the groups CGH, Les Montagnettes, and Chalets des Neiges. In terms of size, tourist residences have twice as many apartments as hotels have rooms, with five beds per accommodation on average, meaning the most beds with respect to other types of destination. Finally, due to the recent development of residences, they generally offer a higher level of quality than hotels, especially in the Alps and the Pyrenees.

Mountain destinations remain favorite destinations for developing residences, and the supply continues to grow, albeit more slowly: around 6,400 new beds were added over the last two years (read our residences report).

The current trend at ski resorts is to renew the leisure supply in order to offer more than skiing with a diverse array of alternative activities, the primary way for resorts to record a sustainable increase in number of nights. In terms of accommodations, commercial properties at resorts, which have suffered from the crisis in particular, could regain ground once domestic demand recovers more durably, considering the increases that have already been recorded with international clientele, who represent an increasingly important share of global demand.

Find all the detailed data for France with a focus on the Alps as well as on the 30 biggest French resorts in our study "Mountain tourism in France" available here.

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