Financial support provided

to mid-mountain resorts in

the Pyrénées-Atlantiques

Executive summary

2022 Annual Public Report

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The Pyrénées

- Atlantiques department owns the ski areas of the Gourette and La Pierre-

Saint-Martin winter sports resorts and the La Rhune tourist train infrastructure. It has chosen

to delegate their operation, through a leasing contract, to the Establishment public des stations

d’

altitude (EPSA) public agency.

In a chapter of the 2015 annual public report entitled “The future of ski resort

s in the

Pyrenees: corrective action needed, decisions inevitable”, the Court of Accounts had drawn

up a worrying picture of the financial position of these resorts. Even the strongly negative

impact of the current health crisis cannot hide the fact that a large part of the findings reported

at that time still remain unaddressed. Indeed, the significant subsidies paid to EPSA by central

government and the Department in 2020 and 2021 to enable it to cope with the crisis present

the risk of having delayed the treatment of long-term issues.

The Covid-19 pandemic: an unprecedented economic crisis for the mid-

mountain resorts of the Pyrénées - Atlantiques

The health crisis has had significant consequences on EPSA’s operations: the two ski

resorts were forced to close from mid-

March 2020, resulting in the loss of nearly €3.4 million

in operating revenue over the year as a whole (-42%). EPSA thus recorded a deficit of around

€2 million.

In 2020 and 2021, in response to this shock, the agency was granted ju

st over €9.5

million in direct aid from central government and the department, as well as the central

government guarantee on a loan of €3.5 million. The total figure (€13 million) represents almost

one year of normal turnover for the agency.

Unstinting support, at the risk of delaying the transformations required

to the mid-mountain resort model

The high-altitude resorts of the Pyrénées - Atlantiques attract a limited clientèle, and

struggle to conquer new markets. Their prospects for business diversification are not sufficient

to ensure the long-term sustainability of their economic model.

Climate change is a major challenge for mountain regions. It reduces the natural snow

cover, especially at low altitude, making the ski area dependent on the use of artificial snow

equipment. The equipment itself can only be operated in specific weather conditions, and there

is also the question of its environmental impact.

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Rising temperatures in the Pyrenees affecting snow cover

Source: Observatoire Pyrénéen du Changement Climatique (Pyrénées Climate Change Monitoring Centre)

Reading note: The annual discrepancy compared to the average value of the reference period 1961-1990 is shown (in

red if it is positive, in blue if it is negative), along with changes in the moving average over a period of 10 years (purple

line).

Available studies show that within 20 to 30 years, there is likely to be one Pyrenean

resort left with acceptable natural snow cover. This would be located outside the

Pyrénées - Atlantiques department.

The economic model of the two resorts managed by EPSA is thus compromised by a

twofold fragility in commercial and environmental terms. These structural weaknesses are all

the more worrying given that the costly modernisation investments by the department are also

destabilising the financial position of the resorts. This is due to the fact a portion of the fee paid

by EPSA to the department is linked to the level of investments made: the more they increase,

the more the fee increases, compounding the deficit if the modernisation has no effect on

visitor numbers at resorts.

In the short term, then, this raises the question of whether the fee compromises the

financial equilibrium of the contract.

In the longer term, the general strategy for the two resorts will need to be redefined during

the renegotiation of the public service concession that the department granted to EPSA in 2012

for 18 years. The contract includes a five-year review clause, which the department and the

agency did not implement in 2017.