Luxury Chalet Ski Holidays Continue To Sell Well

Forget the stock markets turmoil, Greek debt and the US credit rating fall; the luxury sector of the chalet ski holidays are reporting sales up in comparison to 2009 and 2010. The reasons behind this are hard to determine but talking to a number of operators the general perception is that despite the economic downturn, it’s not effecting luxury purchases to the extent that many had expected. In the super luxury ski chalets sector it basically splits into two segments, the six star boutique section and five star luxury ski chalets. Surprisingly the higher-end luxury ski chalet sector has been less affected by the downturn. Whilst some boutique chalets lost revenue as corporate companies reigned in their spending on hospitality, it wasn’t a significant percentage and many operators suggested that for the super rich, the level of disposal income and subsequent buying power has always been strong relative to the price of a luxury ski holiday throughout. In the five star bracket, it was a sector that did see more significant falls however after October 2008. The obvious questions is so why with the current turmoil are chalet ski holidays operators now reporting that in the 2011/12 ski season they are expecting levels to return and possibly exceed the heady pre-2008 crisis days? The five star chalet ski holidays market in 2008 clearly did show price elasticity and it is an interesting one to assess why, as well as the rationale for its recovery. The corporate affect here is two-fold. In the five star market corporate ski weekends and corporate hospitality weeks can account to up to quarter of demand and the loss of many operators corporate clients in 2008 and 2009 therefore caused some significant demand readjustments increasing competition and lowering revenue. It was in fact one of many contributory factors behind the fall of Descent international. Similarly, a large proportion of the customer base is derived from the financial sectors and at the time of the fall, several operators reported last minute cancellations. One luxury chalet ski holidays operator who did not want to be named stated that in 2008 “it wasn’t just the reduction and in some cases the eradication of bonuses that was slowing demand, many of our clients who had enjoyed a decade of good times now faced the real possibility of loosing their jobs. The last thing they wanted to be was in the Alps when decisions regarding who stayed and who went were being made”. Talking to many operators, what we are now seeing is more stable attitude in what is still a world experiencing turmoil and this is the reason for the upturn. Speaking to the CEO at the Chalet Ski holidays company, he explained the upturn appeared related to a pragmatic view from their clients ‘many of our clients recognize that the recession and economic turmoil is far from over, but this in itself was part of the reasons why clients are returning in record numbers. The financial crisis that the world faces could last many years and therefore in many respects people are just getting on with their lives on the basis of what ever will be will be. “ It bodes well but as we all know, who knows what is around the corner.