New Zealand ski areas face possible bankruptcy after lack of snow

Two of New Zealand’s largest ski areas have been placed into bankruptcy proceedings following a disastrous winter which produced barely any snow.

Both the Turoa and Whakapapa ski areas have entered voluntary administration - a lifeline option available to struggling New Zealand businesses.

In the voluntary administration process, the company directors appoint external experts to review finances and assess if the company will be able to stay afloat.

Both ski areas on New Zealand's North Island are owned by Ruapehu Alpine Lifts, a non-profit organisation set up by ski enthusiasts 70 years ago. It is exempt from paying company tax and any profit generated is invested back into the business to improve ski areas.

But there have been no profits. The company lost almost NZ$6m (£3m) last year and is in debt of over NZ$30m (£15m).

In August, the business let go of 135 workers and currently employs approximately 196 people across the two ski areas.

Not only is the skiing industry a vital tourist attraction needed to boost New Zealand's economy, it also shapes the nation's identity as an outdoor adventure site.

This year's snow shortage has only added to the ski areas' many hardships, having already endured two previous seasons' worth of disruptions due to the pandemic.

Last week, the Turoa ski area was forced to close three weeks earlier than scheduled.

Despite the difficulties, the Whakapapa ski area is striving to remain open until 24 October.

The snow has been frequently washed away by heavy rainfall or has melted during warm temperatures this year. Although Turoa employed 50 snowmaking machines the attempts proved futile against the weather conditions.

Staff at Turoa have been using snow-grooming machines to arduously collect and move snow onto trails to allow for limited runs for expert skiers. However, there have been severely limited options available for beginner or intermediate skiers.

Climate change appears to be a key factor - New Zealand saw its warmest winter for the third year in a row this year.

Professor James Renwick, a climate scientist at the Victoria University of Wellington, told the Associated Press that future trends indicate warmer winters and it is difficult to predict how long any individual ski area could survive.

"I've told the North Island ski operators more than once that things are going to become marginal fairly quickly," Prof Renwick said.

"The further south you are and the higher up the mountains you are, the colder it is, so the longer you can keep going."

Yet the issue of climate change and its impact on the future of the skiing industry remains a cause for concern even in the cooler districts of South Island.

John Fisk, voluntary administrator of PwC New Zealand, said Ruapehu Alpine Lifts is under significant cashflow pressure after the last three seasons and the company has been unsuccessful in receiving more financial investment.

"The voluntary administrators will now continue to trade the business while we look to determine the most appropriate way forward to maximise recoveries for creditors," Mr Fisk said in a statement.

Permanent closure of the ski areas would mean the North Island, where 75% of the nation's population resides, would be without any major ski areas.