Ski centres
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This section applies to indoor snow centres and all standalone dry ski slopes.
1.2 Dry ski slopes that form part of a larger multi-use property should be valued in accordance with the instructions that apply to that particular class of property.
Primary Description: LX List Description: Ski Centre and Premises Scat Code: 252 Scat Suffix: S
3.1 This is a specialist class of property, to be valued by National Valuation Unit.
4.1 The Class Co-Ordination team specialist leisure has overall responsibility for the co-ordination of this class. The team is responsible for approach, accuracy and consistency of valuations.
4.2 The team will deliver practice notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:
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follow the advice given at all times
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not depart from the guidance given on appeals or maintenance work without approval from the co-ordination team
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seek advice from the co-ordination team before starting any new work
5.1 Other than planning and where appropriate adherence to the provisions of the Licensing Act 2003, no specific legal framework is believed to exist for this class of property.
6.1 Most ski centres have their own websites, which can be accessed to obtain information on the available facilities.
6.2 The range of facilities that are to be found within this class of property varies significantly; sufficient detail should be recorded, to enable comparisons to be made.
6.3 Buildings should be measured to gross internal area (GIA) in accordance with the VOA Code of Measuring Practice for Rating Purposes; where appropriate the GIA of the ancillary areas found within a building should be separately recorded.
Appendix 1 gives general guidance on the nature of dry ski slopes.
7.1 Rating surveys and plans should be stored in the property folder of the Electronic Document Records Management (EDRM) system
8.1 Rental Method
Open market rental information may provide the best evidence of value. Care should be taken, however, when analysing such rents, as they can often disregard substantial tenant’s improvements, which will necessitate considerable adjustment.
In the case of a fully commercially motivated operation, if possible, the adjusted rent should be tested against a receipts and expenditure valuation, and the resultant valuation expressed in terms of a percentage of gross receipts to facilitate comparison with the assessments of similar hereditaments.
8.2 Receipts and Expenditure
Where a centre is occupied by a fully commercially motivated operator, the recommended valuation approach is one based on analysis of receipts and expenditure. In the absence of full accounts, the valuation should be based on a percentage of gross receipts, having regard to rental evidence, or the analysis of receipts and expenditure on comparable hereditaments.
In some cases examination of accounts will throw up a very small or negative divisible balance. In such circumstances, consideration should be given to the possibility, of competition to occupy, from alternative sources and this should be reflected in the valuation.
8.3 Comparative Approach
Whichever valuation method is used, it is necessary to stand back and look at the answer produced in the light of comparable assessments.
9.1 All valuations for the 2017 Rating Lists should be entered onto the Non-Bulk Server (NBS) (Class - Ski Centres (Scat Code 252)).
9.2 Additional support is available through:
- Survaid
- Class Co-ordination team for ski centres, which is included in the specialist leisure CCT
1. Market appraisal
1.1 The network of dry ski slopes and indoor snow centres that exists across England and Wales offers a range of facilities which vary having regard to the nature and motives of the operator involved. Economic uncertainty, increased overheads, reduced participation and a decline in demand for snow sports holidays, and more recently coronavirus, all combined to affect visitor numbers and viability.
1.2 The 12 months leading up to Antecedent Valuation Date (AVD), 1 April 2021, was dominated by the COVID-19 pandemic. However, this market appraisal reflects the whole period since April 2015.
1.3 The UK is home to six indoor snow centres, but no new centres have opened in Britain since 2009. Prior to 2020, the six indoor snow centres across England, all experienced growth in visitor numbers; their location, their ability to provide weather reliable all year-round activities, and the experience and range of facilities they offer have all contributed to their popularity. This upward trend in attendance has not just been confined to indoor snow centres; dry ski centres have seen a general improvement in attendance / participation with centres that have undergone modernisation and /or diversification of their offer experiencing the most improvement.
1.4 The COVID-19 pandemic had a major impact on dry ski slopes and indoor snow centres in the period leading up to the AVD (1 April 2021). Details of the various restrictions implemented by statute in response to the pandemic, and of the vaccination rollout, can be found online. In February 2021 the UK Government published its Roadmap out of lockdown for England which set out four steps to relax restrictions. Step 1, easing restrictions on outdoor gatherings, had already taken place by the AVD.
1.5 The later three stages of the Roadmap for England included
- the opening of outdoor hospitality, and non-essential retail (Step 2, no earlier than 12 April);
- most legal restrictions on meeting others outdoors to be lifted, opening of indoor entertainment venues such as cinemas, casinos and bingo halls (Step 3, no earlier than 17 May 2021); and
- the removal of remaining restrictions on social contact (Step 4, no earlier than 21 June).
1.6 The situation in Wales, both leading up to and after the AVD, was similar although not identical.
1.7 Subsequent to 1 April 2021 steps 2 and 3 took place as planned, but Step 4 was delayed four weeks to 19 July.
Ski Centre Performance in 2020
1.8 Ski Centres re-opened in August 2020 following easing of coronavirus restrictions but closed again on 5 November for the 2nd national lockdown. They were then able to reopen in April 2021 in England when indoor sports were allowed to re-start as per stage 2 of the Prime Minister’s road map.
Outdoor ski slopes were able to re-open as part of Stage 1 on 29 March 2021 in England, 2 April in Wales.
1.9 Though the popularity and attendance of Snow Centres has grown in recent years, the opening of new centres has been impacted by financial uncertainty since the onset of the coronavirus pandemic.
1.10 Planning consent was granted in 2018 for a new Snow Centre in based in Swindon, to feature 2 indoor snow slopes, 170m main slope and a 75 m lesson slope. The new Snow Centre is part of a £270m project and was due to open by 2020, however financial uncertainty created by Brexit and then the impact of coronavirus has led to a delay in the delivery of the project.
1.11 It is understood that plans for a new £40m Snow Centre in Middlesbrough have been cancelled.
1.12 A number of dry ski slopes in England are currently under threat of closure, largely due to decisions by local councils to sell off the land for redevelopment.
1.13 Proposals for a new £500m Snow Centre in Suffolk however show hope for the future of sector, and it is predicted that the project will open to the public in 2023 or 2024.
2. Changes from the last practice note
2.1 There are no significant changes to the last Practice Note.
3. Ratepayer discussions
3.1 There have been no 2023 List discussions on this class of property.
4. Valuation scheme
4.1 Rents, where available, will provide useful evidence of value, but they can often disregard substantial tenant’s improvements, necessitating considerable adjustment. Any analysis of such rents will, therefore, need to be treated with caution.
4.2 In the absence of reliable rental evidence, the recommended valuation approach is one based on a full analysis of receipts and expenditure; the motives for occupation and the reliability of the figures produced will however need to be closely considered and, if appropriate, an alternative valuation should be prepared based on the comparative approach.
4.3 The initial valuation consideration is to determine the Fair Maintainable Trade (FMT) as at the Antecedent Valuation Date (AVD), 1 April 2021.
4.4 FMT is an estimate of annual receipts that could be derived by occupying the property and conducting the subject business operation with the skill and expertise that could be reasonably be expected from a potential tenant of the hereditament. This figure will represent the gross annual receipts from all sources (exclusive of VAT).
4.5 The effects of the COVID-19 outbreak need to be taken into account as they would have been anticipated by the parties at the AVD. Trade evidence that includes long periods of lockdowns is unlikely to provide good evidence of the FMT at the AVD. Valuers are advised to take as their starting point the closest reliable trade, which is likely to be the 2019/2020 trading year (ending March or before) and any previous trading years.
4.6 Having established the likely FMT for the 19/20 trading year (ending March or before), the valuer should then consider any further adjustments needed to reflect the receipts envisaged as at 1 April 2021. The reasonable efficient operator (REO) will take a view not only on the trade immediately achievable at AVD, but the trade over a period of time ahead, as they are assumed to be taking a tenancy with a reasonable prospect of continuance.
4.7 Analysis of the available evidence suggests that the bid ranges that should be applied to the Fair Maintainable Trade, net of VAT are as follows:
Indoor snow centres: 7.5% to 9.5%
Dry ski centres: 5.5% to 7.5%
1. Market Appraisal
The network of dry ski slopes and indoor snow centres that exists across England and Wales offers a range of facilities which vary having regard to the nature and motives of the operator involved. Between 2007 and 2014 all ski centres faced difficult operating conditions. Economic uncertainty, increased overheads, reduced participation and a decline in demand for snow sports holidays all combined to affect visitor numbers and viability.
In 2013 the “Go Ski Go Board” initiative was launched in an attempt to encourage new and lapsed skiers back to the sport; this initiative allied to the legacy of the 2014 Winter Olympics in Sochi, an increase in exposure of skiing and snowboarding activities on television and an improving economy has resulted in increased ski and snowboard participation across the different types of centre.
The five indoor snow centres in Manchester, Castleford, Tamworth, Milton Keynes and Hemel Hempstead have all experienced growth in visitor numbers; their location, their ability to provide weather reliable all year round activities, and the experience and range of facilities they offer have all contributed to their popularity. The recent upward trend in attendance has not just been confined to indoor snow centres; dry ski centres have seen a general improvement in attendance / participation with centres that have undergone modernisation and /or diversification of their offer experiencing the most improvement.
There appears to be a general optimism within the industry that the recent increase in participation will be maintained. This trend and close proactive management to control outgoings should help to encourage future growth in both profitability and value.
2. Changes from the Last Practice Note
There was no Practice Note issued for the 2010 Revaluation
3. Ratepayer Discussions
There have been no 2017 List discussions on this class of property.
4. Valuation Scheme
Rents, where available, will provide useful evidence of value, but they can often disregard substantial tenant’s improvements, necessitating considerable adjustment. Any analysis of such rents will, therefore, need to be treated with caution.
In the absence of reliable rental evidence, the recommended valuation approach is one based on a full analysis of receipts and expenditure; the motives for occupation and the reliability of the figures produced will however need to be closely considered and, if appropriate, an alternative valuation should be prepared based on the comparative approach.
Analysis of the available evidence suggests that the bid ranges that should be applied to the Fair Maintainable Trade, net of VAT are as follows:
Indoor Snow Centres : 8% to 10%
Dry Ski Centres : 6% to 8%
Location
Proximity to a population centre is likely to produce better business, especially if accessible by public transport. Good road access together with coach and car parking is essential and planning approval is often dependent upon adequate provision.
The Site
A gradient which averages 14 - 16 degrees (1:4 - 1:3 or 25% - 29%) is required on site for the ski slope. This could be a natural hill, a man made hill, a ramp or any combination of these. In the case of a man made hill, the width of the mound will need to be approximately four times its height.
Size of Slope
The market potential, the constraints of the site and individual management philosophy will usually dictate the size and shape of any slope. Slopes vary in length from 30 metres to 400 metres though the most economical slopes are around the 100 metre mark. The width is much more significant and outdoor slopes should be 10 metres minimum with a separate beginners area if possible.
Site Layout
The ski slope should blend in with other facilities to produce good customer flow, cater for spectators and get the very best out of the site potential. The layout should be planned to allow for possible expansion as the business becomes established.
Earthworks
These are usually needed to create suitable skiing contours, sometimes to create barriers (eg. disguise a car park) and generally landscape the site to increase its appeal.
Drainage
This is nearly always necessary however well drained a site appears, but the amount and the type of drainage required will be determined by the geology of the site.
Matting
There are two common types of dry slope matting:
Dendix is the oldest, it is made up of hollow hexagons of upturned plastic bristles approx 25mm long.
Snowflex is a more recent design, it resembles a carpet, with thinner bristles approx 10-12mm long. It is laid on a soft foam-like material, which makes it softer on which to fall.
The matting, not withstanding that it is merely wired and secured by fasteners into position, is considered to be rateable as it is enjoyed with, and enhances the value of, the land on which it rests.
Watering
Although called dry slopes, most have a water sprinkler system, which lubricates the skis on the slope. This creates a more realistic feel, and lengthens the life of both the skis and the matting.
Underlay
Needs differ in relation to the prevailing ground conditions. Underlay is usually necessary to help to keep the skiing surface clean and therefore keep wear and tear to a minimum. It also helps to protect the skis and the safety bindings. The provision of run off areas at the sides of the slope will increase safety and properly prepared walkways will increase efficiency.
Anchorage
Depending on the size and shape of slope a certain amount of anchorage may be required to prevent any movement of the surface. A combination of several systems is often recommended according to ground conditions.
Uplift
A ski lift is an essential ingredient for a viable enterprise. There are three main categories as follows:
a.drag lift with cable of rope at waist height - suitable mainly for slopes of up to 70 metres length.
b button or T-bar lift with overhead cable - suitable mainly for slopes of 75 - 300 metres length.
c.chairlift - suitable mainly for slopes over 300 metres length.
Lighting
The vast bulk of business will occur during the winter evenings so adequate lighting must be provided. 400W high pressure discharge lamps produce the best results.
Buildings
Buildings are required to house equipment, workshop, offices, reception, club rooms, bars, catering, shop etc. All buildings should blend with the whole development of the site and be versatile, so as to take account of possible changes in emphasis as the facility develops and to promote good management / supervision of all areas.
Main Services
These should include water, electricity (gas), telephone, and sewerage.
General
Since the great majority of trade will occur during the winter season a ski slope can be linked very profitably with summer based activities. Apart from creating all year round use of the site this arrangement will produce added use of ancillary facilities, improve cash flow and help to maintain staffing levels.