Importance of early snowfall for Swedish ski resorts: Evidence based on monthly data

• Snow conditions in the early season are crucial for lift ticket sales.
• Snow effect is much more pronounced than the impact of prices and income.
• Downhill skiing is characterised by low income and price elasticities.
• Prices of lift tickets grow faster than the inflation rate.
• Significant decline in skiing demand from 2010/11 onwards.

Since the early 1970s, Sweden has experienced an almost uninterrupted surge in demand for downhill skiing. However, from the 2009/2010 season, lift ticket sales have stagnated. With the use of monthly data, this study investigates the role of snow depth and economic factors in the demand for downhill skiing in Sweden. The empirical approach is based on a seemingly unrelated regression model, allowing snow conditions, but not economic factors to differ during the season. The estimates show that an early season increase in natural snow depth by 10 cm raises the growth rate of lift ticket sales by 9 percentage points in the same period. Further, the results indicate that downhill skiing is characterised by low income and price elasticities, implying weak impacts on demand for such changes. The price increase of lift tickets exceeds that of the inflation rate. The recent decline in demand might indicate changed leisure preferences.