"Three cheers for plough-back"

Ruapehu Bulletin, Volume 10, Issue 469, 19 January 1993, Page 7

"Three cheers for plough-back"

• Your article this week, "Summer Spending Spree for Whakapapa" will be good news for skiers who are experiencing and expecting, better and better facilities and amenities on the skifields. Three cheers for RAL who are going out on a limb to provide them. Your opening sentence, while technically correct, some-how implies that the Company is making lots of profits which it is proposing to 'plow-back' into its operations. This is prevalent in the attitudes of

skiers not only in the surrounding towns, but also in the big cities. Sure, we have had three great seasons, snow seasons that is, which were fantastic for the 'locals' and for the minority of "townies" who were sensible enough to take time off mid-week and sample the fine post-snowfall weather. However, great snow-falls don't always equate to great skier numbers and certainly don't necessarily mean great profitability. Perhaps we should pause for a moment and do some very basic

arithmetic on the business of running a ski resort. Let's look at a typical New Zealand ski field, somewhere between the size of Turoa and Whakapapa. It will have a total 'customer base' or skier-days return of, say 200,000 per season. Its average gross income per skier per day could be, say, $35. Thus its gross income from saies would then be $7m. It helps to compare

this income with the gross income of a smallish town supermarket serving a population of 3,000. Let's assume that the average family spends $50 per head per week. The supermarket 's gross income would then be 3,000 x $50 . 52 - in the vicinity of $7. 8m pa. In other words, to put a ski -field into perspective, the total income from the operation is about the same as, or less

than a local supermarket serving the ski village. If it were lucky enough to return a 5% return on income, its gross profit would be $350,000, which is probably going towards reduction of debt from past capital expenditure. This should show that a typical ski company, far from being a 'pot of gold', is in fact, a marginally profitable small company by New Zealand standards. The fact is, both of the Ruapehu companies are doing well, having the courage to plan for the fu-

ture but working hard to continually up-grade the facilities for us all. To me, it means it's about time that the Waimarino and skiers everywhere expressed a vote of thanks to Dave Mazey and the Board of RAL, as well as to Angus Grimwade and Turoa SL, for doing so much to support the region, so capably.

Barry B

Hobman

Sno-engineering (NZ)