SkiStar's operations
Operation of mountain resorts
SkiStar operates the five largest ski resorts in Scandinavia.
STRATEGIC PRODUCT AREAS
Alpine skiing/ski lift/skipass
- Alpine skiing is SkiStar's core business. The majority of SkiStar’s profits are generated by Ski-Pass sales. The marginal revenue for each addi-tional SkiPass that is sold is high. SkiPass sales during the 2020/21 financial year totalled SEK 1,143 million (1,231). SkiStar’s market share of SkiPass sales during the financial year in Sweden was 51 percent (53) and in Norway it was 17
percent (29). The market share in Scandinavia was 39 percent (43). The number of skier days amounted to 4,405,000 (5,148,000), which is a decline of 14.5 percent compared with the previ-ous year. All reductions in the Operation of Mountain Resorts segment are exclusively an effect of the restrictions in place as a result of the Covid pandemic, meaning that no foreign guests were able to visit our destinations due to the closed borders. This hit our Norwegian desti-nations particularly hard, as they normally have a high proportion of international guests.
Mediated accomodation
- To ensure the availability of accommodation in its operations, we need control over the leasing of a large volume of beds at all the Group’s desti-nations. In this way, we can optimise the occu-pancy rate and any weak sales can be adjusted at an early stage via proactive marketing efforts. The occupancy rate in cabins and apartments owned and mediated by the Group during the 2020/21 winter season (weeks 51–16) amounted to 65 percent (68). The number of mediated beds was unchanged during the year.
Ski rental
- The equipment from our ski rental shops should always be prepared, waxed and correctly adjusted. Ensuring there is always equipment to rent with the right quality is strategically impor-tant for SkiStar. During the financial year, we operated a total of 29 ski rental outlets: nine in Sälen, nine in Åre, six in Vemdalen, two in Hem-sedal and three in Trysil. Sales totalled SEK 127 million (163).
Ski school
- Ski school operations are strategically important for SkiStar, as a life-long interest in skiing is established and long-term contacts are forged between the destination, the skiing instructors and the guests. Children and youngsters who learn to ski early in life often develop a lasting interest in the sport, which they, in turn, pass on to their children. We have a unique ski school brand – Valle’s Ski School – which is aimed at the 3–9 age group. Net sales for the ski schools amounted to SEK 41 million (50) during the finan-cial year. The number of learners at SkiStar’s wholly owned ski schools totalled 56,525. This figure excludes St. Johann and Trysil’s ski schools, in which SkiStar only has a participating interest.
OTHER PRODUCT AREAS
Skistarshop and Skistarshop.com
- SkiStar sells alpine sports goods in stores and online. The company operates its own SkiStarShop Concept Store in Åre and Hem-sedal, and there are two stores in Sälen and Vemdalen respectively. We sell sporting goods related to alpine skiing at our SkiStarShop ski rental outlets. Skistarshop.com is an online store stocking the market’s strongest alpine sports brands. The e-store is fully integrated into the flow of bookings of other products and services on skistar.com, which means that customers can buy a ski jacket while topping up their SkiPass. Customers can then choose to have the goods delivered to their home or pick them up from any of our SkiStarShop Concept Stores. In the 2020/21 financial year, the Group’s retail operations generated sales of SEK 207 mil-lion (179). Online sales continued to increase during the year.
Property services
- The property services product area is made up of building super-intendents, carpenters, electricians, janitors and other service personnel. Revenues within property services comprise rental income for the business premises and remuneration for cabin ser-vice and cleaning. During the financial year, revenues totalled SEK 113 million (102).
Skistar sports & adventures
- A new concept was launched before summer 2021 to attract guests to our destinations during the summer months too: SkiStar Sports & Adventures was started in Sälen, Åre and Trysil. Investments related to this initiative have so far amounted to SEK 28 million. This mainly consists of the development of climbing parks, different types of trail cycling, padel courts and crazy golf. Further expansions of bike rentals, Valle Kids’ Club, Teen Camp Bike, tailor-made cycling packages and guidance, along with bundling of new Lift and TrailPasses have focused on generating new revenue, but also on getting more guests to test new products and return the following summer, or ideally also the next winter.
Other
- Other revenue includes income from events, advertising sales, kiosks, sales of Ski*Direct cards (the plastic card for the electronic SkiPass) and grants received. Other income during the financial year amounted to SEK 262 million (242).
Operation of hotels
Demand for active holiday experiences in Scandinavia – both in summer and winter – has increased hugely in recent years in line with the strong staycation trend in which quality accommodation in attractive locations with a high level of comfort and easy access to experiences on site has become increasingly important.
As of 1 July 2021, SkiStar is running six hotels, mainly apartment hotels, at Norway and Sweden’s top mountain destinations. By operating the hotels ourselves, we are able to offer first-rate accommodation while bundling package solutions and sales of SkiStar’s entire product portfolio all year round in line with our business strategies. The assets at the facilities include hotel rooms, apartments, restaurants, bars, conference facilities, swimming facilities and a spa.
The hotel operations, also known as the “SkiStar Lodge & Hotel”, consist of four lodges and two hotels, of which one is an apartment hotel, in Sälen, Hemsedal and Trysil; SkiStar Lodge Experium Lindvallen, SkiStar Lodge Hundfjället, SkiStar Lodge Suites and SkiStar Lodge Alpin Hemsedal, and the Radisson Blu Resort and Radisson Blu Mountain Resort & Residences in Trysil. All of the hotels have direct access to the lift system, known as the “ski-in-ski-out option”.
The initial focus during the first financial year is to build up new hotel operations with an efficiently functioning operating structure and to identify synergies and economies of scale between differ-ent hotels and countries. In terms of operational activities, the focus will be on both enhancing efficiency and following up on operational quality. Clear future objectives include ensuring a high level of guest satisfaction, increasing revenue in the form of add-on sales at the hotels and achieving cost efficiency within the organisation in terms of purchasing, maintenance and personnel costs.
Property development & exploitation
To create value, focus is placed on drawing up long-term development plans for future investments at SkiStar’s destinations.
Such plans create business opportunities through, for example, the sale of land and plots, building for rental, building for sale or to increase value in some other manner. This can either be carried out by SkiStar or in cooperation with other partners. As of the 2018/19 financial year, the Property Development & Exploitation segment encompasses non-current assets such as land, property and investments in co-owned companies.
EXPANDED AND STRENGTHENED COLLABORATION WITH PEAB
SkiStar and Peab have run Skiab Invest AB through 50/50 owner-ship since 2011. The company’s first project was to build eight apartments and a restaurant to rent in Björnrike, Vemdalen. In recent years, five hectares of land holdings have been exploited in Sadeln, Åre, where the company helped create six tenant-owner associations by selling off land. The seventh and final association will build 44 apartments with leasing and occupancy scheduled for the 2022/23 winter season. As of summer 2021, this collaboration has been expanded and strengthened by establishing the subsidi-aries Skiab Sverigefastigheter AB, Skiab Norgefastigheter AS and Skiab Projektfastigheter AB.
In Sweden, SkiStar Lodge Lindvallen and the ongoing construc-tion of SkiStar Lodge Hundfjället were divested to Skiab Sverige-fastigheter AB. In Norway, all fully and partially owned hotel prop-erties were divested to Skiab Norgefastigheter AS. SkiStar will rent and operate all properties from 1 July 2021 in a new operating segment called Operation of Hotels.
Skiab Projektfastigheter AB classifies Property Development & Exploitation under this segment. SkiStar has divested five areas of land for the planned operations in Sälen, Åre and Vemdalen to Skiab Projektfastigheter AB, which are mainly intended for accom-modation, with the exception of one area of land in Sälen which is earmarked for commercial buildings with a total gross floor area (GFA) of around 60,000 sq m.
LAND ASSSETS
SkiStar's land development assets and unsold plots total 5.4 mil-lion sqm (5.4). Most of the assets were acquired a long time ago and therefore have a low acquisition value. No market valuation of the assets has been conducted, as it is difficult to make a reasona-ble assessment of the possible exploitation rate of the land assets. Based on our own assumptions and experience, around 50 percent of the land can be built on, which is 2.7 million square metres. If the land is sold as plots, it would mean 2,700 plots, each comprising 1,000 square metres.
LAND AND PLOTS FOR SALE
At the end of the financial year, development land was available for sale in Ullådalen, Åre, and two plots in Björnrike, Vemdalen. In the Sadel area in Åre there is an additional detailed development plan in a fifty-percent owned joint venture for continued sales to newly formed tenant-owned associations.
SKISTAR VACATION CLUB
SkiStar Vacation Club is a form of accommodation that is customised to meet guests’ demands and requirements. The apartments are divided into weekly units, and guests purchasing one or more of these units are entitled to the additional benefits of member-ship of the international exchange and placement organisation, RCI, as well as membership of SkiStar Vacation Club. This form of accommodation is cost-effective, simple and flexible for the time-share owner. Cost-effectiveness is achieved either through the utilisation of a purchased week, compared with the equivalent cost of renting for that week, or by exchanging the week with a trip abroad through RCI. In addition, the timeshare owner can pur-chase foreign trips through the RCI system. SkiStar Vacation Club also provides timeshare owners with a raft of advantages and benefits during their stay. The simplicity of timeshares comes from the fact that the guest is not responsible for the maintenance of their ownership share. Instead, the tenant-owner association, of which the timeshare owner automatically becomes a part, takes care of the maintenance and development. The apartment is always clean, the beds made up, and it is warm and ready ahead of the guest’s arrival. Flexibility is achieved as the timeshare owners can enjoy RCI’s entire range of over 7,000 destinations worldwide. SkiStar Vacation Club is currently offered in Sälen, Vemdalen and Åre, however, the intention is to roll out the concept to more destinations.
INVESTMENTS
The investments expected to be used in the Group’s own opera-tions amounted to SEK 166 million (366) during the financial year. In Sälen, this relates to the completion of the fourth and fifth stage of Solbacken in Tandådalen with a further 74 apartments.
Construction is under way on SkiStar Lodge Hundfjället, along with the redevelopment and renovation of premises for restau-rants, conferences and swimming at Hundfjällscenter. Furthermore, construction has begun on premises for a SkiStarShop Concept Store and planning for tenant-owned apartments in Timmerbyn Village. SkiStar Lodge Hundfjället was divested to Skiab Sverigefastigheter AB, which will complete construction by the 2021/22 winter season in line with previous planning. The Concept Store and Timmerbyn Village were divested to Skiab Projektfastigheter AB for further management.
DEVELOPMENT PROJECTS IN 2021/22
In Lindvallen, Sälen, land was divested to Skiab Projektfastigheter AB with the aim of constructing some 40 tenant-owned apartments in two stages, with construction beginning in spring 2022. Other land containing two development rights for commercial operations in Lindvallen, Sälen, was divested to Skiab Projektfastigheter AB. Construction has begun at one of the development rights on a SkiStarshop linked to the Concept Store, which will be rented out to SkiStar. Construction of apartments for sale was begun during the year in Hemsedal in an area known as Fjellnest. The project includes 69 apartments in four stages, of which 36 are included in the first step. Work to produce detailed development plans for all destinations will be intensified with the aim of preparing for new development projects. In Åre, planning for an expansion of Rödkullen and a restructuring and extension of Björnen Centrum is continuing. These two projects are being conducted together with other developers in each area.
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