CHINA INDUSTRY INSIDER Q+A Part 2

Published in Chinese on WeChat / GoSki Observer, November 2016

State of China Resort Landscape - Justin Downes, President of Axis Leisure and IMG Resort Management

Q: What opportunities do you see to increase participation in winter sports quickly?

School & Youth Participation (through programs like Grade 5 snowpass or mandatory school participation) 2) Modified Work Schedules (move away from the pass migration on weekends and holidays ONLY, so that people can be allowed to, and afford, to travel and recreate during weekdays and off peak periods {for example, Whistler is campaigning to change the school schedule so that ‘school weekends’ are now Sunday/Monday}) 3) More on mountain non-ski activities to ensure that non-skiers and those that are simply looking for extra entertainment, can be entertained and want to stay longer. 4) More affordable pricing structures and packaging (especially during weekdays) For example, when Vail first opened its Epic Pass program in 2008, a season pass at Vail Mountain sold for US$1,500. The company lowered it to $600, and watched as the number if season pass holders went from 40,000 to more than 550,000 today. 5) Improved Kids Ski School facilities and programs

Q: What is the average development project in size and value?

There is no real average, but the a typical large scale destination resort being built from the ground up might range from 20-60 sq/km, offer approximately 1500-2500 hotel rooms and range in development budget from RMB 10 billion to RMB 20 billion. Of course, in almost every case, the resorts are being built over many years and in multiple phases.

Q: How many jobs does a project like that create?

This also ranges extensively depending on the project, but a large scale resort at build out, such as Wanda Changbaishan, Secret Garden or Thaiwoo, might ultimately create several thousand year- round direct jobs, not to mention the incremental jobs created in the support industries in the neighbouring towns – and of course the several thousand construction workers that are employed at any given time during the development period. The economic spinoff and employment creation opportunities are significant for most resort regions and communities.

Q: Sustainability - ignored or embraced in your field of work in China?

Unfortunately, like most countries (China is not alone), sustainability is often discussed but rarely implemented. So, while it is not ignored, it certainly has room for significant improvement. In my mind the greatest areas for improvement are 1) Power Generation ( most regions lack the power infrastructure required to service their tourism and population growth, and as such – the resorts should be looking to solar and wind resources for many of their power needs) 2) Water recycling (this is a huge topic to be addressed – resorts should be forced to develop water treatment facilities that utilize the resort grey water for snow making and irrigation purposes) 3) Drainage ( much more attention must be given to protecting from erosion through proper construction methods, ground stabilization and water barring, to reduce sediment run off and poor run off controls) 4) More Efficient Buildings (bigger is not always better) 5) Trees (for every one tree removed to create the trails and construction area, perhaps 3 new ones should be planted elsewhere in the property or region)

Q: Your expectations in the run up to 2022?

More and Improved infrastructure – getting to the resorts and the facilities once you get there. As China is largely still starting out, they have the capability to implement the latest and greatest technologies 2) Better and improved service – both in range of service offerings and training and customer service of the staff 3) Government sanctioned levels of service and accreditation in Ski Instruction and Mountain Safety 4) Higher quality and better educated management staff 5) a significant growth in summer visitation to the mountains for non-ski entertainment 6) a change in the work schedule policy to allow for a more balanced visitation to the resorts 7) a significant increase in Chinese skiers heading offshore for ski and snowboard experiences internationally 8) A genuine shift toward mountain culture as young families move toward a better quality of life, both professionally and personally. 9) the implementation of truly integrated resort destinations in China. 10) The evolution of a Chinese Alpine Champion !

Q: What should the legacy of the Olympic Games entail?

A universal passion for the sport and the active, healthy, community lifestyle that it brings 2) The development of vibrant mountain communities where people will develop their careers, raise their families and make it their home. 3) an educated and motivated group of employees and consumers alike. 4) unparalleled quality and variety of facilities that will be accessible to the public for recreation and tourism, plus to train the future wave of Chinese elite athletes.

Q: Which project did you most enjoy working on recently?

While it came with many challenges and headaches along the way – the creation of China’s first Cat Ski operation @ Changbaishan – Powder Paradise was memorable as it was very much a pioneering type project in a truly iconic location. The unveiling of Thaiwoo this past winter was also very gratifying as it was the culmination of a great deal of hard work by a talented and emotionally invested team. It was great to see the many years of planning and attention to detail by those involved to be received with critical acclaim by the industry. They still have a long way to go but have formed a fantastic foundation and have a solid plan going forward. On top of that – the team are genuinely a pleasure to work alongside on a day to day basis.

Q: Which resort in China is your favourite and why?

It’s hard to pick just one. I have always been a fan of Beidahu – I believe that it offers one of the best ski experiences in the country. I am glad that finally it is seeing the investment in quality infrastructure and service that it deserves. Thaiwoo is also a special place for me – while it is still under construction, the plans and the vision will deliver a truely first class international destination, resplendant with great dining, accommodations, retail shopping, animation and year round good times with excellent service. If I am to move to the mountains – that’s where I will go !

Axis is a leading leisure and hospitality consultancy headquartered in Beijing, - specializing in four season development projects on behalf of domestic developers, and representing leading foreign firms in the hospitality/leisure industry looking to offer service, or launch their brand into the growing Asian marketplace in the areas of Ski, Golf, Integrated Resorts and Entertainment Venues. In January 2015, Axis and IMG formed a groundbreaking Joint Venture – IMG Ski Resort Management.