Visitors enjoy themselves at a ski resort in Chongli county of Zhangjiakou, Hebei province. (Photo by Feng Yongbin/China Daily)
With 2022 Winter Olympics on the horizon, ice and snow sports to spawn a $152 billion market by 2025
Skiing, once a less popular sport among Chinese people, has become fashionable of late, thanks to real estate firms that built multipurpose ski resorts in the run-up to the 2022 Winter Olympics in and around Beijing.
The Chongli county of Zhangjiakou, Hebei province, North China, will host many competitions during the 2022 Games. According to the Zhangjiakou tourism development committee, Chongli has seen investors from home and abroad pump nearly 88 billion yuan ($13.3 billion) by July into development of local ice and snow tourism.
Most of the eight ski resorts in Chongli are owned by leading Chinese property developers such as China Vanke Co Ltd, Dalian Wanda Group and Luneng Group Co, according to Shen Lianchun, marketing general manager of Wanlong Ski Resort.
"Big names in the domestic real estate market all came here," Shen told The Economic Observer, the Chinese-language weekly. "There will be more in the future."
Besides Hebei, Jilin province of Northeast China, which has rich snow resources, also saw influx of investors, including Wanda, Luneng, Vanke and French leisure group Club Med.
"The skiing industry is developing fast in China," said Wu Bin, former chief strategy officer of the ice and snow business department of Vanke.
Wu, who authored the Chinese skiing industry's white paper, said about 15 million Chinese people went skiing in 2016, a sharp increase from 1996 when only about 1,000 Chinese tried their hand at it. "China has become the biggest market for entry-level skiers," he said.
The number of people participating in ice and snow sports is expected to surpass 50 million by 2025, spawning a market worth 1 trillion yuan, according to the 2016-25 development plan for ice and snow sports released by the central government in November last year.
In countries that have a long history of skiing, such as Japan and France, about 10 percent of the population ski, while only about 1 percent of Chinese population go skiing now.
This indicates there is big potential for growth in China, according to a report from Beijing Antaeus Ski Resort Investment and Management Co Ltd.
Agreed Wang Yan, a skiing fan who has visited major ski resorts around the world over the past seven years, including Niseko in Japan and Vail in the United States.
For him, domestic ski resorts are better than expected, but there is scope for immense improvement.
"Very few skiing trails in China are longer than 2 kilometers, while foreign ones are often 3 to 5 km long," he said. "The gradient is about 10 to 20 degrees at Chinese resorts, while those in foreign countries can be as steep as 40 degrees."
Besides, most of the domestic ski resorts have 10 to 20 trails while foreign ones generally have more than 40.
"You may wait in line for 10 minutes to reach the top and take 30 seconds to slide down, making it hard to enjoy the sport to the fullest," he said.
There are more challenges. Wei Wenge, vice-president of China National Sports Group, said the limited facilities and services, as well as single type of tourism products are major challenges facing the industry.
Also, ski resorts are struggling to make profits.
Wanlong Ski Resort, one of the oldest resorts in China that has been running for more than 10 years, broke even in 2014, said Duan Jianjun, its office director. He added the whole profit is less than 10 percent of its revenue.
About 70 percent of its income came from entrance tickets and equipment rental, and the rest from hotels and catering, according to Wanlong Ski Resort.
In response to the need for profits, skiing could soon emerge as the raison d'être for winter vacation tours, with more diverse and professional services on the horizon, said Ding Changfeng, CEO of the ice and snow business department of Vanke.
Wanda's ski resort in Changbaishan Mountain in Jilin province and Vanke's Songhua Lake Ski Resort, also in Jilin province, are drawing inspiration from Club Med's strategy in the 1950s that saw it introduce high-end restaurants, water spas and entertainment activities at its first ski resort in Switzerland, industry insiders said.
Vanke announced in September that it will build Hanhailiang Ski Resort in Chongli with an area of 4.5 million square meters and a record-breaking trail vertical drop of 810 meters. It will open in 2019.
The company said a town characteristic of the resort will be built around it, with improved equipment, restaurants, training bases and space for mountain activities. The idea is to offer a range of experiences to customers.
Fan Shihong, CEO of the ice and snow branch of Tus-Holdings Co Ltd, said the company offers tailor-made indoor sports for children at its 40 stadia around the country. "Competition is inevitable in this growing market," Fan said.
Big property operators like Vanke and Wanda have strength in customers, assets and brands, which helps them to form standalone and profitable ski resorts, he said.
Unlike ski resorts run by property majors, TusHoldings earns half of its revenue from training related to ice and snow sports, he said.