ECONOMIC IMPACT
When a visitor spends money on a ski field or in a local town like Ohakune or National Park, part of this revenue is quickly turned into jobs and income within the enterprise (hotel, restaurant, shop etc).
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For example, if a local business receives $100,000 in ski related revenue and spends $35,000 of this on wages and salaries, the direct income is 35¢ in every dollar. Another company may employ 10 staff and generate sales revenue of $1 million. This means that one job is generated for every $100,000 that the company turns over.
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Beyond the direct impacts there are further degrees of interaction with the local economy. Local businesses spend money on necessary goods and services and pass a portion of their tourism related revenue on to these suppliers. If the next link in the chain is located within the region, more local income and employment will be generated (indirect effect).
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Similarly, when local residents who have received wages, salaries or profits (directly or indirectly) from money generated by tourism, when spending their money within the region it creates a further round of income and employment generation (the induced effect).
It is the portion of spending that stays in the region (as wages, investment, purchases, etc.) that determines the size of the multiplier. The greater the linkages to the local economy the greater the employment and income multipliers will be.
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(From Ski Areas Association of New Zealand Study)
WINTER TOP-LEVEL FINANCIAL IMPACT
Based on our research across all the available reports and data we believe the winter revenue is between approx. $89.6m and $115.2m based on visitor numbers of between 350k to 450k at an average spend of $256 per visit. (Ref Appendix A, B, C, F)
This generates approx. $39.4m to $50.6m of local income. (Ref Appendix C)
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This generates between 4,211 and 5,405 jobs directly and indirectly in the local and wider region.
(Ref Appendix C)
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Note: There are significant data gaps and discrepancies in the available data, consequently, data must be collected from several different sources each of which uses a different methodology and often have differing boundaries. This makes it extremely challenging to determine, with accuracy, a complete picture of the spend in the region. Therefore from our analysis of the available data sources, the above range of figures can be considered to be a reasonable indication.
STAKEHOLDER IMPACT EXAMPLES
In a 2022 survey by Hutch Consulting regarding the value of RAL to the Ruapehu community. They asked business in the local districts what would business look like without RAL. Interviewees saw this as a daunting scenario that did not bear thinking about.
To put this into context, following are some specific examples of how the Ski Field Operations affect the various stakeholders.
Government
Even if 60% of the above mentioned figures is direct revenue that attracts GST, the Government are receiving between approx. $8m to $10.3m per year not including PAYE.
Department of Conservation (DOC)
Income:
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RAL License fees, rates and levies $716k P.A (Ref Appendix F)
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Mountain clubs license fees - approx. $1.5m to 2m P.A (Ref Appendix G)
Liability:
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Removal of all clubs according to DOC licences would be between approx. $12m to $24m (Ref Appendix G)
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Removal of all lifts and many RAL buildings from the mountain could be at least $50m
Ruapehu Alpine Lifts (RAL)
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RAL approx. 700 staff (Ref Appendix A & F)
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Approximately 350,000 to 450,000 average visitors to both Whakapapa and Turoa per year (Ref Appendix F)
Suppliers in the wider region, potential effect examples:
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Electricity Usage and Line Charges $1.8m P.A (Ref Appendix F)
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Suppliers $5.1m P.A (Ref Appendix F)
Mountain Clubs
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48 Clubs on mountain with between approx. 14,000 to 20,000 members (Ref Appendix G)
Suppliers in the wider region, potential effect examples:
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Clubs' food purchases estimate $336k P.A (Ref Appendix D)
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Clubs' electricity usage and line charges estimate $480k P.A (Ref Appendix D)
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Club members fuel usage estimate $2.1m P.A (Ref Appendix E)
Economic Impact Appendix
A. Value of RAL to the Ruapehu community - Hutch Consulting August 2022
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‘In the period prior to Covid, the average winter spend by a visitor to the area was $256 each’.
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‘Together, the operation of TÅ«roa and Whakapapa ski-fields support the equivalent of 700 employees through winter’.
B. Ruapehu destination management - Stafford Strategy March 2022
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'2019 Total Visits to Ruapehu 1.43m'.
C. Ski Areas Association of New Zealand Study Findings March 2002
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‘Every dollar spent by a visitor to the mountain, 42 cents of income is generated for the local economy’.
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‘For every $10,000 spent by visitors 0.47 jobs (seasonal and full time) are created. In other words for every million dollars of tourist expenditure 47 local jobs are created).
D. Individual clubs estimate food P.A $7,000, Electricity Usage and Line Charges P.A $10,000
E. Club members fuel usage ,14,400 x 1 trip in winter, filling up once (average $150) in the region, $2.1 m
F. RAL Annual Reports
G. Ruapehu Mountain Clubs Association