RMB vs liftco

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To run a ski resort inside a national park (as is the case in Australia) you need someone that runs the lifts and someone that manages the town or resort. In NSW this varies while in Victoria there is a setup in place for it. There are pros and cons to each system and it isn't clear if one style is superior to the others.

Victorian Setup

A resort is composed of a number of leasees. These are businesses that want to conduct a business at a geographic location that just happens to be where it snows in winter. These businesses could be accommodation lodges, restaurants, hire/retail, or a lift company. All these businesses need basic services (such as gas, power, water, waste management etc) and in a normal situation this is the role of local council. In Victoria this is the role of the Resort Management Board (RMB). All businesses that wish to conduct business in the Resort boundaries have to deal with the RMB as they would a local council.

Hence a lift Company is not in charge of everything at the resort. Typically the RMB is in charge of such things as:

  • Road Clearing
  • Sewerage
  • Garbage collection
  • Power supplies

and all the other "council services" type things such as beautification and promotion of the region for tourists. This is what your gate entry fees pay for. The largest lessee in each case happens to be the Lift Company.

There is no dealings with National Parks as the resort boundaries may be within a national park but the resorts themselves are not part of the national park.

NSW Setup

NSW has two different setups, a head lease (Thredbo) and a situation more similar to the Victorian one where each business has a lease with the overlying body which in this case is National Parks (Perisher). In the case of Perisher National Parks subcontracts many of the services back to Perisher (eg road clearing etc) and even though these are performed by Perisher it is as a sub contractor for National Parks. Perisher Blue has been agitating for a change to a head lease model for many years.

One aspect of the direct lease model in Perisher is that all services in Perisher, such as garbage collection and sewerage, are funded by levies on the lessees. This is a cause of some aggravation for club lodges as their fees are effectively funding services for all the day visitors to the resort while Perisher Blue takes the profit. The club lodges and small commercial lodges believe that this is unfair.

This situation has been redressed to some extent by the increases in NPWS entrance fees, which are to be used to provide infrastructure for the Perisher Range Resorts. Unfortunately, denizens of, and visitors to, Thredbo are upset by this plan as they pay the fees for upgrading facilities that they do not use. One answer to this is that Perisher Blue folk received no benefit for the cost of upgrading the Alpine Way after the landslide. Another answer is that the rent paid by Thredbo is a derisorily small amount, and that Thredbo users should pay a greater proportion of the costs of running the Park. There is no answer to this problem that will satisfy all stakeholders.

Having a head lease means that in Thredbo all the lodges have a lease with Kosciusko Thredbo Pty Ltd and not with National Parks. What this means is that performance clauses etc can be placed by the lift company on businesses that acquire leases and they can be required to operate for minimum times (eg 50 weeks per year) and to certain service standards. An unfortunate aspect of this situation is that, back in the late 1950s, the then Park Trust gave Thredbo a long lease with options on extraordinarily favourable terms. The rent is a proportion of Thredbo's after tax income, or a floor of $5,000. Several creative accountants have siphoned much of Thredbo's income to service companies so that the actual company holding the lease makes very little money.