A lot of snow fell on the Alps during the first full week of December, driving many local ski fans to the slopes. However, the French ski resorts are worried about a big drop in reservations by foreign tourists, especially from the U.K., following a ban by the French government on non-essential travel from that country. The Swiss government is now requiring a quarantine for visitors from the U.K., where the number of Covid cases has exploded. A lack of foreign tourists is also feared in Italy, where the government is requiring a negative Covid test in the absence of a proof vaccination for anybody entering the country from anywhere, starting on Dec. 15.
FESI, the Federation of the European Sporting Goods Industry, already called earlier this year for uniform cross-border policies to aid the winter sports industry, which suffered huge losses from the Covid pandemic during the 2020/21 season. In Austria alone, where the Parliament has voted in favor of mandatory vaccination from next February, tourism-related sporting goods retailers recorded sales losses of up to 95 percent in the last season, as they are even more dependent on foreign tourists than Italy or France.
On Dec. 13, Austria came out of a 20-day lockdown for non-essential retail stores, although they are still shut off in the region of Oberösterreich until Dec. 17, but restaurants will remain closed until further notice in this and some other states, obviously discouraging tourists from coming over. The lifting of the lockdown has reportedly led to slightly higher sales of sporting goods and some other items than a year ago, in spite of an obligation for the customers to provide a certificate of vaccination, like in Germany.
Non-essential retail stores remain open in Switzerland, like a year ago, but the authorities are proposing to leave it up to the individual operators to limit the number of people who will be allowed to enter their stores. Green passes are not required in Swiss, French or Italian stores, but they are needed to use ski facilities.
Meanwhile, a study commissioned by a committee of the Austrian Federal Economic Chamber (WKÖ) indicates that liquidity bottlenecks and staff migration may threaten the existence of specialist sports retailers if tourists fail to visit again the country this winter.
According to SpEA (SportsEconAustria), which conducted the study, 86 percent of the retailers in Austria’s tourist regions expect sales and profits to decline again during the 2021/22 winter season. Three epidemiological scenarios were used for the calculation. Even the current base scenario, with reopened stores and restrictions for the unvaccinated, stands at a loss of sales of at least 15 percent as compared to the pre-Covid year of 2019. Michael Nendwich, spokesman for the sporting goods retail industry in the WKÖ, even expects a worst-case scenario of a decline of up to 95 percent.
There are around 750 sporting goods stores in Austria’s tourist regions, mainly in the country’s west, and 94 percent of them are individual family-run businesses. Sales to guests from Germany, the Netherlands and England have accounted for over 70 percent of their turnover, the majority of which is generated in the winter season from December to March. In addition, rental, services and ski storage, which have escaped the recent 20-day lockdown, are key revenue generators – and it was here that sales declines were by far the highest last year.
The end of the Austrian retail lockdown on Dec. 13 was an essential first step to salvage the 2021/22 winter season, but a possible new lockdown in Germany and the spread of the omicron variant throughout Europe and beyond are posing further threats to tourism. “We must now ensure that the season starts promptly and can last until March. Our retailers confirm: The guests want to come, it’s just that no one knows how it will be possible,” Thorsten Schmitz, managing director of Intersport Austria, and Holger Schwarting, CEO of Sport 2000, commented.
During the pre-Covid 2019/20 season, Austria was again in second place in the world ski market behind the U.S. with sales of 444,907 pairs of alpine and touring skis. The main buyers of the Austrian ski industry are sporting goods retailers in touristic regions. However, financial losses and difficulties in the sporting goods retail sector also affect a broad network of upstream services – first and foremost, the manufacturers. The SpEA study shows that a lack of liquidity among retailers has already led to lower orders from the ski industry for this season, with a direct impact on the domestic value chain. Foreign ski manufacturers have suffered, too, of course.
The dependence of the sports industry on the hotel, catering and tourism sectors is very strong. “For every euro that is turned over in the specialist tourism sports trade, there are 51 cents in upstream and downstream industries. There is a great risk that this strong network with the domestic ski industry and numerous suppliers will be damaged in the long term if the winter season does not proceed as planned. We must avoid a negative domino effect on the global market leaders from the Austrian ski industry at all costs. Otherwise, there is also a risk of loss of domestic added value and jobs in this area,” says the author of the study, Christian Helmenstein.
Moreover, the absence of tourists has led to a migration of personnel from the sports retail sector to other industries in recent months: According to the survey, 94 percent of tourism-related sports retailers find it very difficult to hire enough qualified employees. Another 77 percent expect employment to decline in the future. A clear commitment that the winter season will take place would provide employees with a better sense of job security.
The survival of the sector will also depend on further governmental help to compensate for the loss of sales. Four out of five businesses would not have survived the 2020/21 winter season without subsidies. The new study shows that 77 percent of tourism-related sports retailers applied for an overhead subsidy, 74 percent relied on short-time work, and just under 70 percent counted on the revenue compensation and downtime bonuses. The industry will need more help to survive economically if the winter season does not start as planned and tourists fail to show up.
Photo: Joshua Earle, Unsplash
