Mountain of money: Chile's ski resorts spend big to make more money on foreign vacationers

Latin Trade, Nov, 2005 by Jen Ross

During their short summer months, people living in northern climes flock to beaches, cottages, campgrounds and do just about any outdoor activity that involves wearing shorts. Meanwhile, south of the equator, some investors are banking on the reversal of seasons--summer is winter in the Southern Hemisphere--to lure foreign tourists seeking a decidedly chilly experience.

"Have the best winter vacation of your life next summer" reads the slogan for Valle Nevado, a Chilean ski resort. Not a bad pitch. With snowy mountaintops and resorts marketing all-inclusive ski pack ages, Chile has all the makings to become a true haven for hard-core skiers during its June-October season. Given the flurry of new projects in several of the country's 15 ski resorts, investors appear eager to turn Chile into the world's winter playground.

Resorts along a mountain road just outside of Santiago are forecasting a 35% increase in their tourist traffic. Between them they have invested US$13 million last year to beef up infrastructure. Leading the pack is Chile's Valle Nevado, which has invested $21 million during the last four years.

"This is a sort of last frontier in the ski industry," says Jimmy Ackerson, general manager of operations for Valle Nevado. "Chile's development has been slower than North America's, but I'm convinced that the Andes mountain range has potential yet to be tapped. It has young mountains with little erosion and a magnificent setting."

The stunning, jagged peaks of the snowcapped Andes are the perfect setting for above-the-tree-line skiing or snowboarding. Perched 3,000 meters above sea level, it gets the ideal amount of snowfall--seven meters per season, but there are 19 snow machines on standby just in case.

The company says the quality of the snow here is among the best around--dry and stable. Valle Nevado also claims one of the highest numbers of sunny days, at 80% of the season. Guests sit in outdoor heated pools year-round, even when the temperature dips below freezing.

Built in 1988, the resort decided in the late 1990s to focus on drawing skiers in from more distant parts of the world to add to its traditional base of Brazilian and Argentine tourists. Apparently, the word got out. Valle Nevado has managed to almost double its North American traffic to 9,000 overnight stays from 5,000 in 1999.

The resort last year sold 150,000 lift tickets, with roughly a third of its visitors staying overnight. Most tourists come with weeklong all-inclusive packages in one of the property's three luxury hotels or fully equipped apartments. Packages range anywhere from $770 to $2,400 per person depending on the season and hotel class.

In recent years, Valle Nevado has expanded its hotels, built a high-tech nightclub and revamped its restaurants. Several trails have been reconditioned, a snow park improved, and investment in two helicopters is helping to capitalize on the latest trend--heli-skiing. The resort's new AS350 B3 helicopter allows more adventurous thrill-seekers to reach altitudes of up to 4,200 meters and plunge toward the virgin snow at $135 per person.

"In Canada or the States you're not going to be able to access 6,000 feet of run" says Dean Decal, a 44-year-old ski instructor from Massachusetts who has made heli-skiing at Valle Nevado a yearly tradition. This year marked his ninth ski vacation in Chile. "I've heli-skied in most places in the world and I've found that, on a good day with low wind, it's by far the best here in Chile."

Valle Nevado also acquired a second helicopter with seating for six to shuttle guests from the airport in nearby Santiago to and from the resort. Shuttling over the smog-choked capital could help the resort improve its image as a high-end ski resort. But it's almost a necessity considering the condition of the rugged, frozen single-lane road that leads up to the resort.

Juan Antonio Munoz, ministerial secretary for the Ministry of Public Works of Santiago's Metropolitan Region, says just maintaining the largely seasonal route has been difficult. Because its main use is tourism, the government has decided to allow private companies to spend an estimated $11 million to make the trek less frightening. The government hopes to announce the winning bidder in 2006.

On the map, Farther away; close to the Argentine border, Portillo is perhaps South America's best-known ski resort. In 1966, Portillo was put on the map when Chile became the first country in the Southern Hemisphere to host the World Skiing Championships.

Portillo's New York-born owner Henry Purcell helped crack the North American market by getting the company advertised in specialty ski and tourism publications around the world. The company has invested $1 million per year during the past three years improving infrastructure, ski lifts and expanding snowmaking capabilities.

General Manager Miguel Purcell says that of Portillo's 40,000 lift passes last year, the resort put up an estimated 8,000 foreigners. He recognizes that Valle Nevado has become his biggest competitor.