Jones 1The ski industry has been around since the beginning of the century. Since thattime the retailing industry of the ski world has been on a steady increase. At the beginning of this decade the increase began to skyrocket.
However, skiing was not thereason for the growth. The reason for the dramatic increase in industry sales in the retailworld of skiing was due to snowboarding. By now almost everyone in the country haseither seen a snowboard, ridden one, or knows someone who has. The purpose of thispaper is to discuss what snowboarding is, and to shed some light on the financial aspectsof this new sport.
Snowboarding hit the scene in 1972. Jake Burton, at the age of 15, decided thathe had enough of skiing and wanted to do something a little different. With a littleingenuity and some of his dads tools he began working on the first snowboard. Hisproject lasted about three weeks and when he was done he decided to take his inventionto the slopes and she how it worked. This was almost the end of snowboarding. Everyslope Jake went to denied him access, saying that they only allowed skis on the hills.
Jake was a very determined kid and this did not stop him. He began hiking everyback-country trail he could find and he became quite efficient at snowboarding. At thesame time he continued to knock on all the ticket windows at every resort but still had nosuccess. He decided that the only way he could prove his invention was nothing morethan a different version of a ski would be to make a video of himself riding down theback country hills.
This was no easy task, keep in mind the year is 1972. Jake was Jones2determined and he met up with a guy named Craig Kelly who at the time was into videoproduction of skateboarding and skiing. Jake gave the sales pitch and Craig bit hook,line, and sinker. The next week the video was complete and Jake took it to all the resortswith Craig and they pled their case. By this time Jake had made about a dozen moreprototypes of his snowboard and all his best friends were riding them.
Finally a smallmountain, Okemo, said O. K. Jake you can ride, but only during the week This was allit took and from then on almost anyone that saw this crazy kid zipping down the hill on awooden board with both feet strapped to it began to ask questions. From that moment onBurton Snowboards, INC.
was created and is now the number one manufacturer ofsnowboards in the world. (Burton 1988). In the 1980’s snowboarding was still not extremely popular and it was very rarefor a resort to allow it on the hills. As the yuppie age ended and the Generation X’ersbegan to get into skateboarding, BMX bikes, bungee jumping, and roller blading,snowboarding took off.
By 1991 eight-five percent of all ski resorts allowedsnowboarders to share the mountains with skiers. (Gatlin 1993) According to the samearticle over 73% of the people snowboarding in 1991 were under the age of 25. This agegroup typifies Generation X. Along with snowboarding came an entire new image. BradWilson, the marketing director for Big Bear Mountain in southern California summed itup well with this quote: It was kind of like the 1960’s all over again, snowboarders dressdifferently, they have different haircuts and they ride on this different-looking boarddown the hill. (Feldman 1995).
In an age where being different is normal, snowboarding Jones3just seemed to fit right in to the picture. Now, in 1996 only 3% of ski resorts do not allowsnowboarding. The resorts have realized that if they want to stay in business then cateringto snowboarders is one of the easiest ways. Many resorts have begun to add new trails tothe mountain just to accommodate snowboarding. Most of these extra slopes have hugejumps, half-pipes, tables, trash cans, metal pipes, and even cars for snowboarders to jumpon or over.
The most important feature of these special slopes is the fact that skiers arenot allowed on them. The reason that many resorts have added these snowboard parks isbecause of the problems between skiers and snowboarders. (Feldman) Roger Hauser, the director of Massanutten Ski School, said that there were quite afew reasons the resort added the snowboard only park five years ago. First of all, hesaid the mangers of the mountain were taking a lot of heat from skiers because of all thejumping and tricks the snowboarders were doing on the slopes. He said that when kidsare doing tricks they are going to be falling down, when they fall down people run intothem.
So the mountain added the park and now limits snowboarders who want to dotricks to use that slope. The rest of the mountain is still open to snowboarders. Hausersaid that since the park was opened there has been a dramatic decrease in injuries betweenskier and snowboard collisions. He also said that business has picked up about 15% inthe past five years which he believes is attributed to snowboarding.
Ski resorts are not the only place that business has picked up in the past five years. The main area of financial growth is the actual snowboard manufactures of snowboards. Currently there are 117 snowboard companies in the world. (Schacter) Of the 117 there Jones4are five that hold 50% of the market. Burton is number one with an annual sales ofaround 30million, Ride is number two, and three, four and five are: Sims, Morrow, andAnthony.
(Baker 1995) Morrow and Ride have seen the most dramatic increases in theindustry since 1993. The total current assets for Ride in 1993 were $2,365,000 and in1995 they were up to $37,139,000. Morrows total current assets went from $6,607,000 to$31,179,000 in the same time period. Net sales for both companies went up dramaticallyin the past five years also. Ride has seen a net sales increase of 611.
2% while Morrow’ssales have increase 74%. (These figures are directly from the company records of bothcompanies. )The cost of snowboards is one reason that sales have gone up for these companiesand it is also another reason for the popularity of snowboarding as compared to skiing. IfJoe Public sixteen year old wants to start snowboarding he is going to need to get himselfsome equipment. The average cost of a complete setup, which includes a snowboard,bindings that hold the board to the feet of the rider, and boots, costs around $450according to Transworld Snowboarding 1996 buyers guide.
If the same kid would wantto set himself up with a ski package he would have to get the skis, bindings, boots, poles,goggles, neon ski-outfit (required for skiers), and multiple other flashy accessories. Theaverage cost of a new ski setup is around $850 according to Ski magazine 1996 buyersguide. It is clearly cheaper to get into snowboarding. This price advantage ofsnowboards over skis is much more attractive to the average teenager who probably Jones5doesn’t have much money anyway. It is also more attractive to Mom and Dad to spendless on a snowboard than skis. Sepp Kobler, the manager of Freestyle Sports in Charlottseville, said that fiveyears ago snowboards and accessories accounted for about 5% of all sales in the shop.
Now it accounts for close to 30%. Kobler feels that if it were not for the dramaticincrease in snowboarding he would have had a hard time keeping the shop open. Kidsare into it, and so are there folks, its cheaper, its more fun, and its easier to learn saysKobler. A sales clerk at Bear Mountain, Brian Almarez says that is extremely hard tokeep the hooded flannel shirts in stock.
Also, the baggy pants fly out the door faster thannatty neon-colored ski wear. Almarez also states that you don’t see too manysnowboarders out there who aren’t making a fashion statement. (Feldman) The final area of retailing that has reaped many positive benefits fromsnowboarding is in the sales of lessons. The author, a professional snowboard instructor,has seen lessons go up 50% each year over the past three years at Massanutten. Considering that a one hour private lesson costs $30 this is a huge increase in revenue forski resorts. Hauser, the Massanutten Ski School Director, expects snowboard lessons tobe on the rise this year.
The rental shop has ordered about 150 new boards and we haveadded a few more promotional events to keep up with the demand for snowboarding saidHauser. According to the Professional Ski Instructors of America winter 1996 newsletter,every resort that is P. S. I.
A. accredited offers both ski and snowboard lessons. Currently35% of all beginner lessons at resorts are snowboard lessons. (PSIA) Jones6Snowboarding is currently still in a huge growth stage. Even though it came outin the seventies, the most dramatic increase the industry has seen has been over the past 5years.
It is a sport that is primarily appealing to Generation X. The image that goes alongwith snowboarding is primarily defined as original. Snowboarders do their own thing,but nobody (except the occasional skier) seems to mind. Snowboarders have brought abreath of fresh air to many businesses. These businesses range from manufacturers ofboards and equipment all the way to ski schools that are offering lessons.
Snowboardingis bringing large amounts of revenue to all of these businesses. There are a few primaryadvantages snowboarding has over skiing such as: appeal to younger population, cost ofgetting started, and current popularity. From all of the research here it would be easy toassume this trend will continue to grow. The current population is into extreme-sportsand generation X is continuing to grow. It would also be easy to assume that over thenext few years not only will there be an increase in the number of people snowboarding,but there will also be an increase in the cost of snowboarding equipment. These factorswill have positive benefits on both the manufacturers of snowboards and the retail storesselling the boards and equipment.
The efect of snowboarding on the sking industryByBrian JonesEnglish 1101Professor Allen1 November 1999OutlineI. IntroductionII. The begeninga. Jake BurtonIII.
Popularity growsIV. Introduction of snowboar only parksV. Financial costsVI. ConclusionEconomics Essays