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From the CEO - September 16

September 16,2015 In Snow

“Lies, Damn Lies and Statistics”

Much of my career has revolved heavily around interpreting numbers…all manner of numbers, spotting anomalies, capitalising on discrepancy and profiting off misinformation, or the failure of markets to exhibit rational, efficient behaviour.  I can quickly draw parallels between financial markets and my present role, especially the rational part…

A "random walk" probably draws the closest description of my analysis between certain statistics and what brings people to the mountains. There used to be a strong correlation between reported snow depth and visitation. In economics and financial markets, the “random walk theory” suggests it is impossible to consistently outperform the market, particularly in the short-term, because it is impossible to predict stock prices. The same could now be used to understand the dynamics driving resort visitation.

Predicting that a big snow event (incredibly difficult given changing weather patterns – see Winter Edition Seven for my views there!) drives visitation, whilst still exhibits a strong correlation; it is not the driving force. Don’t get me wrong, there are no friends on powder days (or meetings before 1030am) and who doesn’t love “freshies”?

Anyway, back to the numbers. For those wondering, this season has bucked the recent trend of shorter visitation, with total visitor days in resort up 4% year to date (YTD), whilst resort entry is presently down 1%.  Comparatively, Falls Creek is outperforming the two other major Victorian resorts on both metrics. However, more importantly and what will drive further evaluation of the numbers, is that on the current run rate total visitor days in resort is ahead of the 10 year average, by 2%.

For the most part, Falls Creek isn’t competing against other snow resorts, or the reported snow depth at said resorts. We’re competing against the Gold Coast, Bali, Thailand, New Zealand (recently rated the Adventure Capital of the World), the cross rate of the Aussie dollar or the plethora of substitutes presented by a holiday in another destination, offering an experience we can’t!

Intertwined with this is another question as to whether or how value plays a part in the decision making process, or does fanaticism drive consumption when it comes to a “snow holiday”? This week, in conjunction with Tourism North East, a group of on mountain stakeholders and operators thrashed these and other issues out to formulate strategies to drive visitation to the resort all year round.

On the notion of “value”, the question repeatedly posed is whether value is a monetary unit (a number) or a perception.  The understanding differs depending on your perspective and experience whilst consuming the goods or services that “you have paid for”. Research would suggest that it is the “experience” that repeatedly outweighs the “cost” or more accurately defines the perceived “value” of any consumption choice.

Therefore, the customer experience, inclusive of resort entry, the ATS, village shuttles, integrated purchasing of accommodation, ski hire, lessons, lift tickets, the food offering and entertainment options need to be consistent and the experience seamless. Ultimately, expectations need to be exceeded for “value” to be experienced.

In an ideal world, this would exist. Rest assured, this is of the highest priority and focus as resort management works with all stakeholders to make Falls Creek the number one alpine resort experience in Australia.

The same rigour is being applied to the delivery of service infrastructure resort management is tasked with.  By ensuring operational efficiencies are maximised, service and infrastructure delivery will enhance the pursuit of any activity, delivering exceptional value and an outstanding mountain resort experience.

Finally, being ahead of historical averages, whilst a nice statistic, it is just that. What matters is the constant evaluation of performance against metrics that continue to raise the bar, embeds accountability and ensures expectations are exceeded. In working towards this ambition, Falls Creek will be recognised for being the ultimate alpine resort in Australia.

Now, average snow depth is 82cm, its -1.0c, UV index is 3, 13 lifts are turning…get out there and hit the slopes.