Snow, spending and Spendmapp
It matters how much snow you start with
The snow season is important for local government areas near our mountain resorts. Comparing expenditure data over the last three years highlights a few interesting patterns. While good snow through the season is important for visitor numbers, equally important, or so it appears, is how good the snow is leading up to, and on opening weekend.
Comparing opening weekends for the last three years
There is a concept in complex systems theory called sensitive dependence on initial conditions. It (sort of) describes a phenomenon you can see in the expenditure patterns of visitors during Victoria’s ski season. In this context, it refers to the fact that how the season starts has a significant impact on how it goes.
The opening of the ski season in Australia is over the Queen’s birthday weekend in early June and if we look at the snow charts for Victorian resorts in 2017 and 2018, they showed pretty good snowfall through the season, but the good stuff came a little after the opening weekend. In 2019, by contrast, there was an early, heavy dump of snow, with less during the season.
And if we compare expenditure patterns at two of the major resorts in Victoria (Mt Hotham and Falls Creek), we see something interesting. Overall Visitor Local Spend (that’s spending by non-residents and non-local businesses in the area of interest) in the Alpine Shire economy for the 2019 opening weekend was a little over twice that of 2017 and almost twice that of 2018 (Figure 1). More snow for opening weekend and more spending. A simple and obvious relationship.
Source: spendmapp.com.au
Moreover, the pre-season Visitor Local Spend was also far better in 2019 than the preceding two years (Figure 2). Clearly early snowfall is the key to a successful opening weekend.
Source: spendmapp.com.au
And there does appear to be a path dependency to spending patterns (another term from complex systems). The 2019 rate of snowfall has roughly tracked 2017 and both are notably lower than 2018. Yet, at least until the end of July, spending in 2019 has been consistently higher than in the preceding two seasons (Figure 3). And it’s not like 2019 has had a bumper snowfall compared with the previous two years. Nonetheless, spending is staying higher. We can possibly put this down to the opening weekend building the momentum and interest.
This chart shows spending from the beginning of June to the end of July for 2017 and 2018 and the end of June for 2019. Expenditure spikes occur on weekends. Source: spendmapp.com.au
And what are they spending on?
Given most visitors going to Alpine Shire in winter are there to ski (or work in the ski fields), it’s no surprise that most of the spending is in Dining & Entertainment. In fact, over the last three years, this category accounted for 40–50% of all Visitor Local Spend on the opening weekend. In 2019, we’re talking $1.02 million.
Through the season (at least up until the end of July), the Dining & Entertainment share was at least 30–35%, with more spending in other categories such as Transport (car parts and repairs, fuel etc) and Travel (which includes goods such as lift tickets).
And where are they coming from?
A quick review of the origin of domestic visitors to the two Victorian resorts in the Alpine Shire region and there is one interesting pattern. If we just look at the top three suburbs of origin for the five destination suburbs of interest (Figure 4).
People staying on the mountain and spending are more likely to come from Toorak, South Yarra, Kew and Brighton. Those staying at the bottom of the mountain (Mt Beauty for Falls Creek and Harrietville for Mt Hotham) are more likely to be either locals or from a different set of suburbs, such as Hawthorn (for Mt Beauty) and Point Cook and Mount Waverley.
Which is useful information for targeted marketing.
Source: spendmapp.com.au
Wish for good snowfall prior to opening weekend
The patterns in visitor origin and expenditure category make sense, and the specific details are useful insights, but what was particularly interesting for us was that, based on the last three years at least, decent cover by the opening weekend will have an ongoing positive effect on total spending over the season. Here’s hoping for 2020.
