Courts, climate change and credit crunch hit ski resorts

It is not just les Houches that is having problems for the 2008/9 season. The Col de Porte near Grenoble is involved in a legal dispute which may keep the lifts closed for another season. The Col de Porte is credited with having the first drag lift in France, built in the mid 1930s and was a favourite with skiers from Grenoble who, once upon a time, would cycle up to the resort on a Sunday with skis strapped to their bikes. Although not large, the area offers a popular floodlit funpark and is an excellent place to learn. It also has a great snow record.

In June 2008 the mayor of Sarcenas, Mr Garin son of the resort’s founder, sold the lifts to private investors. However under the French Mountain Law of 1985 such owners are not allowed to run ski lifts unless they receive power to do so by the local authorities. Mr Garin got the local council to pass a decision giving these powers to the new owners. However a further requirement of the Mountain Law is that the infrastructure of a ski resort may only be managed by an individual if they are associated with a public body. The Prefect (state governor) has brought an action before the administrative court disputing the validity of the local authorities’ decision.

Mr Garin has withdrawn the original delegation but believes the problem to be purely technical. However the Prefect is pushing for a solution whereby the lifts are transferred nearby rivals St Pierre de Chartreuse. Sarcenas doesn’t like this decision as it means that the ski resort will be exempt from paying local taxes. The difference of opinion between the Prefect and the Mayor appears so wide that no accommodation can be reached this season. Meanwhile the Col’s infrastructure will suffer another year without maintenance.

While the problems at the Col de Porte and les Houches revolve around legal disputes the Pyrenees has suffered two years of poor snow. In Porte Puymorens the financial situation is critical. The resort has carried out an audit and looked closely at the management of the resort. The report has emphasized problems with managing the ski resort and identified solutions, “some of which can be put in place very quickly”, according to the mayor. He continues “the coming season looks like it is going to be difficult. Everyone is going to have to make sacrifices, from employees to rate payers. We are looking at various ways of getting out of the current situation, for example creating a private / public company or even getting a private company to run the resort. However all the solutions have a cost but we need to keep the resort alive until the UTN is agreed.”

The UTN is a project for an 18 hole golf course plus the long proposed link to Andorra via the Porte des Neiges and the construction of 2600 beds. However not everyone believes that the golf course will be successful given the decline in summer visitors to the French mountains. Porte has taken out a bank loan to run the resort in 2008/9 but it is not clear if all the lifts will operate. Some are very old and extremely costly to run. It is claimed that the resort has 22,000 euros of debt for each resident although the mayor says he doesn’t recognize these figures. Still things are even less bright at the tiny resort of Goulier which has not opened for the last two seasons.

Hugues Bousiges, the Prefect of the Western Pyrenees where Porte is situated, has commissioned his own audit of the mountain range. The results are alarming, “the reduction in snowfall and visitor numbers have caused financial losses. The cost of running the ski areas is putting local communities into a worrying position”. The report goes on “the management is not transparent and is sometimes unprofessional”. The Prefect has warned Mayors that the “French state cannot fill the hole in budget deficits”. He proposes grouping ski areas and developing activities outside of skiing which can operate all year round. There is resistance from some mayors who see the snow situation as cyclical and who are awaiting a bumper season to stabilize things.

The low lying Vosges also suffered from two poor seasons. Last year snow came in March and most areas were already closed. The situation at Gerardmer is worrying. Two years ago Maulin group, which runs les Sybelles in the Maurienne, took over the management of the ski area. Maulin has been expanding rapidly and picked up some of the defunct Transmontagne resorts last year. After a catastrophic couple of seasons they have been booted out by the mayor. Commentators have claimed that improvements, started in November 2007, were too close to the start of the ski season, projects were poorly conceived and communications “a disaster”. The management of snow making has been described as a “shambles” with a new Snowstar system being commissioned which is incompatible with the existing system from York. The result was that even in mid-season the work wasn’t finished with different pipe bores and an incompatible computer system. The local council hopes to run the resort itself but locals are worried by tax rises.

Local communities are normally seen as Triple A creditors by banks. Normally they don’t default on loans as they pass again obligations onto the local tax payer or rely on state aid. Briançon may illustrate the limits to this theory. Resorts’ ability to raise capital has not been helped by the credit crunch. Dexia banque, which lends heavily to local communities recently had to be bailed out by the French and Belgium governments.

Posted by davidof on Sunday, 12 October, 2008 at 01:24 PM

The TF1 French TV news reports that reservations for ski resorts are down 30% this year. Resorts are hoping for late bookings.

Posted by  on  Thursday, 23 October, 2008  at 10:45 PM
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