PROJECT tREPORT BUAP009/BUSP012 tPROJECT tMANAGEMENT tASSIGNMENT Resit/deferred OCHILS' tSKI tCENTRE Date tissued: t9th tJune t2022 tSubmission: tTBC tJune t2022 t(noon) REPORT SUMMARY tThe tpurpose tof tthis tarticle tis tto tanalyse twhether tski trestaurants tin tScotland tare teconomically tviable. tData toriginates tfrom tthe tfinancial tstatements tof tthe t61 tlargest tski tlift toperators tin tScotland. tDescriptive tstatistics treveal tthat tthese toperators tare tcharacterized tby tpositive tand trelatively thigh treturns, tand tby thaving tlittle tdebt tin tgeneral tterms. tThe tresults tshow tthat tthe tmost teconomically tprofitable tski toperators tare talso tthe tlargest. tThe televation tof tthe tski tarea tis tnot trelevan.Overall, t larger tski trestaurants tare tbetter tprepared tfor tthe tfuture tinvestment tneeded tto tadapt tto tthe tnew tconditions tin tthe tindustry, tsuch tas tclimate variability.Winter ttourism tis tan timportant tindustry tin tthe tScotlandan tAlps. tAt tpresent, tthe tsector tis tin ta tstagnation t phase t and, t in t addition, t faces t great t challenges t in t the t future t as t well. tThese t include, t above tall, tclimate tchange, tbut talso tthe tchange tin tholiday tpreferences tand tincreasing tinterest tin tcity tbreaks. tAccording tto tthe treport tcompiled tby tVanat t[1], taround t100 tcountries tcan tbe tfound taround tthe tworld tthat toffer tski tfacilities tand tareas tas ttourist tand tsports tdestinations. tIn tsaid treport, tthe tauthor tidentifies taround t2000 tski trestaurants, twhich tattracted tover t400 tmillion tskiers tin t2017– 2018 t[1]. tThe tauthors talso tfinds tthat tmature tmarkets thave tseen ttheir tgrowth tslow, twhile tother temerging tmarkets tshow tsignificant tprogress t[2]. The tstudy tpresented there twas tapplied tto tski tlift toperators tin tScotland, tand tanalyses tthe teconomic tsustainability tof tthe trestaurants tin teach tof tthese tcountries. tAccording tto tdata tfrom t he tVanat tstudy t[1], ttogether twith tJapan tand tthe tUnited tStates, tthese tthree tcountries trepresent tan texample tof tthe tworld’s tbiggest tski tdestinations tand thave ta tlarge tnumber tof tfacilities.Some tstudies t[7,8] tshow tthat tthe tpopulation tand tnumber tof tworkers tin tthe ttertiary tsector tincrease tin tterritories twith tski trestaurants, twhile tthe tnumber tof tpeople temployed tin tthe tprimary tsector tdecreases. tAn tincrease tin tthe tnumber tof tskiers talso tleads tto tan tincrease tin tthe tflow tof ttourists. tThis tfact tshows tthat tthe tindustry tis tof tdecisive teconomic timportance tfor tmountain tareas t[9,10]. The tdemand tfor twinter ttourism tdepends ton tseveral tfactors: tnational tand tinternational tincome, tprices, ttransportation, tcosts, tthe ttiming tof tEaster tholidays, tand tclimate tchange t[11]. tClimate tchange thas tbeen tfound tto tbe ta tkey tfactor, tespecially tfor tsome tlowaltitude tski trestaurants. t In tthese trestaurants, tvariations tin tdemand tare tmuch tmore tpronounced, tsince tthey tare tvery tdependent ton tthe tclimate tand ttherefore ton tthe tdepth tof tsnow ton tthe tslopes t[11]. tCompanies tprefer tto tinvest tin thigh-altitude tski trestaurants, taiming tto tcreate tlarge tski tareas t[12–14] tthat tattract tforeign tskiers. Conceptual tBackground Although tclimate tchange tis tonly tone tof tthe tfactors tthat tinfluence twinter ttourism, tthe tpresence tor tabsence tof tsnow t(snow tdepth) tand tits ttemporary tnature tare tkey telements twhen tassessing tprofitability tand tsustainability tin tthe tmedium tand tlong tterm t[12]. tTherefore, tone tof tthe tbiggest tproblems tfor tski tlift toperators tin tpoor twinter tsnow tseason ttimes tis tthe tincreased twater tdemand tfor tthe tsnowmaking tsystems t[15]. tIt tis tworth trecalling tthat tthe tshortening tof tthe tsnow tseason tand tscarcity tof tsnow tat tlower taltitudes trequire tthe tuse tof tartificial tsnow, twhich tmeans ta tconsiderable tincrease tin tproduction tcosts tand twater tusage t[16]. tSome tauthors thighlight tthe tdifficulty tof tachieving tsustainable tdevelopment tin tsnow ttourism, tgiven tthat tthe tinterests tof tthe tdifferent teconomic tagents tresult tin tshort-term tvisions tthat tare tsubject tto tprofitability tcriteria t[16]. In trecent tyears, tmany tstudies thave tshown tand tcorroborated tthe texistence tof ta tglobal tclimate tchange t(IPCC) t[17], ttogether twith teconomic tefficiency, tone tof tthe tgeneric tfactors tworthy tof tconsideration twith trespect tto tthe tfuture tof tthe ttourism tindustry. tWith trespect tto tthis, tthe tliterature tstates tthat tclimate tchange tis teroding tthe tefficiency tof tsnow ttourism tat tan talarming trate t[18–21]. tStudies thave targued tthat tin tlight tof tpredictions tof tincreased ttemperatures, tthe tproduction tof tartificial tsnow twill tbecome tless tefficient tand tmore texpensive tover ttime. The tlong-term teconomic tprofitability tof tthis tpractice tis ttherefore tbrought tinto tquestion. tFor tski tareas tlocated tat tlow taltitudes, tthe tinstallation tof tsnow tcannons tderives tfrom ta tshort tor tmedium-term tstrategy, twhich tis tboth teconomically tunsustainable tand tecologically tquestionable. tSome tresearch thas tstated tthat tthe tneed tto tunderstand tdifferential tclimate trisk tgrows tas tinvestors tand tfinancial tregulators tincreasingly trequire tclimate trisk tdisclosure tat tdestinations t[22]. tAnother tstudy tinvestigated tthe tsocio-economic timplications tof tchanges tin tsnow tconditions tfor tski trestaurants tin tthe tFrench tAlps, tanalysing ttheir teconomic timpact. tThe tresults tshow tthat tsnow tconditions tin tski trestaurants tdiffer tgreatly tdepending ton ttheir tgeographical tlocation, tsize tand taltitude t[23]. Various tstudies tfocusing ton tthe ttourism tindustry thave tanalysed tthe tfactors tthat tinfluence tthe tsurvival tof tcompanies tin tthe thotel taccommodation tand trestaurant tsectors t[24–27] tand tthe thospitality tindustry t[28]. tThese tstudies tshow tthat tfirms’ tsurvival tis tsignificantly tand tpositively trelated tto ttheir tsize,even tif tsome tauthors tstate tthat tperformance tdecreases twith tsize t[29]. tIn tthe tsame tline, tsome tstudies thave targued tthat tsmall tfirms tare tmore table tto tinnovate tbecause tof ttheir tflexible tstructure tand tmore trisky tbehaviour t[30]. tDespite tthis, tmost tstudies tin tthe tliterature tfind tthat tlarge tfirms tare tmore tefficient tthan tsmall tfirms ton taverage, tas ta tconsequence tof ttheir tgreater tmarket tpower, tstrategic tgrouping tby tfirms, tand teconomies tof tscale t[31]. tIn tthe tspecific tcase tof twinter ttourism, tan tinvestigation tanalysing t he tfinancial tand teconomic tsustainability tof tski trestaurants tin tthe tCatalan tPyrenees tfound tthat tonly tlarge tski tareas tare tprofitable tand tthe trest tare tin tmost tcases, tnot tsustainable tfrom ta tstrictly teconomic tpoint tof tview t[32]. tHowever, tthe tstudy talso trevealed tthat tmost tareas tare tsustained tby tthe tlocal tauthorities tdue tto tthe tincome tgenerated tby ttheir texistence. tAnother twork tstudied tthe teffect tof tclimate tchange ton tthe teconomic tsustainability tof tski trestaurants tbased ton tadaptation tcosts t[33]. tThe tresults tshowed tthat tlarge tinvestments tcan treduce tthe tability tto trespond tto tchanges tquickly, tthat tsmall tbusinesses tare tmost taffected tby tfinancial tcosts, tand tthat tseasonality taffects tthe tability tto tabsorb tcosts tincurred tadapting tto tthe teffects tof tclimate tchange. tFinally, tthe tstudy talso tfound tthat tthe tbenefits tcan tbe tworth tthe tcosts. tThus, taccording tto tthe tliterature, tit twould tseem tclear tthat tsize talso tplays tan timportant trole tin tthe tperformance tof tski trestaurants, tencouraging tmore tanalysis ton tthis taspect. Ski tRestaurants tand tEconomic tSustainability The tliterature tstates tthat tan teconomically tsustainable tcompany tguarantees tsufficient tcashflow tto tensure tliquidity tat tany ttime, twhile tproducing ta tpersistent tabove-average treturn tto tits tshareholders t[48]. tThe tsame twould tbe ttrue tof tski trestaurants. tIn torder tto tanalyse tthe tprofitability tand tproper tfunctioning tof tany tsector tof tactivity, tthe tliterature tcommonly tmakes tuse tof tthe teconomic tand tfinancial tdata tof tthe t companies t comprising t it, t applying t a t great t diversity t of t statistical t techniques, t such t as t models tfor tevaluating tefficiency tor tbusiness tsurvival tmodels, tamong tmany tothers. tNumerous texamples tof tthis ttype tof tstudy thave tbeen tapplied tto tthe tfinancial tsector t[49–51], tthe thospital tsector t[52], tand tthe telectrical tindustry t[53], tamong tothers. tThe ttourism tindustry tis tno texception, tstudies thaving tanalysed t he tefficiency tof ttravel tagencies t[54–56], tthe thotel tsector t[57–60], tairports t[61,62], tand trestaurants t[63], tamong tother tsubsectors tof tactivity. tProfitability tis tcommonly tregarded tas ta tmeasure tof teconomic tsustainability tof ttourism tenterprises t[64]. tAnother tcommon tmeasure tof teconomic tsustainability tis tdebt tratio, twhich tis tthe tportion tof ta tcompany’s tassets tthat tis tfinanced tthrough tdebt. tA thigh tdebt tratio toften treflects tcumulated tlosses tin tthe tpast, tand tcould tdetermine ta tcompany’s tcapacity tto tmake tnew tinvestments tin tthe tfuture. 1. Data When tidentifying tski trestaurants tin tany tdatabase, tone tproblem tthat tarises tis tthe tabsence tof ta tsingle tepigraph tfor tthis ttype tof tactivity tin tthe tScotlandan tCommunity’s tStatistical tClassification tof tEconomic tActivities t(NACE tRev. t2), twhich tmakes tit timpossible tto tobtain ta tsingle tlist tof tall tski trestaurants tincluded tin t he tdatabase. tHowever, tfollowing tan tindividual tsearch trestaurant tby trestaurant, twe tverified tthat tmost tof tthe tski trestaurants twe thad tidentified tmanually twere tincluded tunder tthe tfollowing tactivity theadings: NACE tREV.2-9311. tManagement tof tsports tfacilities. NACE t REV.2-4931—Urban t and t suburban t passenger t land t transport. We ttherefore tfiltered tthe tcompanies tin tthe tdatabase, tselecting tthose tcompanies twhose t(main tor tsecondary) tactivity twas tone tof tthe tabove. tSubsequently, tan tindividual treview twas tcarried tout to t identify t which t of t these t companies t were t ski t restaurants, t the t rest t being t discarded. t Finally, t and t given tthat t some t ski t restaurants t are t not t included t under t these t activity t headings, t we t conducted t a t new t search t of tthe t database, t taking t into t account t the t description t of t the t activity t provided t for t each t company t in t the tOrbis tdatabase, tand tselecting tthose tcompanies tin twhich tthe tdescription tincluded tthe tword t“ski”. tSubsequently, t a t new t individual t review t was t carried t out t to t identify t the t ski t restaurants t and t to t discard t the trest. tFollowing tthis tidentification tprocess, twe tobtained ta ttotal tsample tof t61 tski trestaurants tfor twhich tdata twere tavailable tfor tthe tperiod t of tstudy. t Appendix tA tshows tthe tcomplete tlist tof tski trestaurants tincluded tin tthe tsample. t The tAppendix talso tstates twhether tthe tski tlift televators tbelong tto ta tlarger tbusiness tgroup, tand talso ttheir tmaximum televation. t As twe tcan tsee, tthe tsample tconsists tof thigh-elevation tski tareas, tso tit tis tnot trepresentative tof tthe tski tindustry tas ta twhole. tAppendix tB tshows tthe tdistribution tof trestaurants tby tcountry tand tsize. 2. Economic tand tFinancial tAnalysis 2.1. Profitability tAnalysis In torder tto tdetermine tthe teconomic tsituation tof tthe tski trestaurants tin tthe tthree tcountries tin tthe tsample, twe tapplied ta tset tof teconomic tratios. 2.1.1. Economic t Profitability The teconomic tprofitability tor tROA t(return ton tassets) twas tcalculated tas tthe tEBIT t(earnings tbefore tinterest tand ttaxes) tgenerated tby tthe tcompany tin trelation tto tthe tinvestment tmade tto tobtain tthem, tor tthe ttotal tassets. t Table t1 tshows tthe taverage tlevels tof teconomic tprofitability tobtained tfor teach tcountry. As twe tcan tsee, tthe tFrench tski trestaurants tobtained tthe thighest taverage tprofitability tfor tall tyears tanalysed t(the tdifferences tbeing tstatistically tsignificant), tfollowed tby tthe tAustrian tand tthe tItalian tones, tthe tlatter thaving tthe tlowest tlevels tof teconomic tprofitability t(with tthe texception tof t2018). tThese tresults tcould tbe tjustified tby tthe tfact tthat, tas twe thave talready tseen, tthe tFrench trestaurants tincluded tin tthe tsample twere tlarger ton taverage, twith tthe tItalian tones tbeing tthe tsmallest. tAnd, tas twe thave tgleaned tfrom tthe tliterature t[13,65], ta tgreater tsize tcould tcontribute tto tski trestaurants tobtaining tbetter teconomic tresults. In torder tto tcorroborate tthe tabove thypothesis, tthe taverage teconomic tprofitability twas tcalculated tby tsize tof trestaurant. tTable t2 tshows tthat tthe taverage teconomic tprofitability tof tthe trestaurants tanalysed twas tpositive tin tall tperiods, tand tthat tthere twas talso ta tdirect trelationship tbetween tprofitability tand tsize. tThe tlargest trestaurants twere tthose tthat twere tmore teconomically tprofitable, tand tvice tversa. tIn taddition, twe tcould tsee t hat tthe tsmallest tski trestaurants twere tthe tleast teconomically tprofitable tin ta tstatistically tsignificant tway. * tThe tmain tROA tvalue tis tsignificantly thigher tin tthe tFrench tski trestaurants. tThe t~ tsign tindicates tstatistically tnon-significant tdifferences. Table t2. t Evolution tof teconomic tprofitability t(ROA) tby tsize t(percent). LARGE 2022 2021 2020 2019 2018 Mean Min Max Dev. Median 7.39 4.71 12.69 0.0302 7.15 7.18 4.60 13.63 0.0361 4.91 6.94 4.11 11.03 0.0294 5.39 7.27 2.03 11.91 0.0366 6.93 7.17 2.56 11.85 0.0351 6.57 2022 2021 2020 2019 2018 Mean Min tMax tDev. tMedia n SMALL 7.18 −1.96 4.86 6.90 −3.64 5.36 5.70 −4.11 4.46 6.45 −1.67 5.53 5.43 −6.64 16.16 0.0561 6.41 2022 2021 2020 2019 2018 Mean tMin tMa x 3.47 0.46 7.81 2.47 −8.81 4.37 −0.37 4.09 −1.27 4.53 −3.16 12.33 MEDIUM-SIZED 40.50 t21.77 t18.52 t17.69 9.36 t14.01 t9.69 Dev. t0.0226 t0.0401 t0.0421 t0.0335 t0.0420 Median t2.85 t2.47 t2.86 t3.77 t3.57 ANOVA F tp tvalue tTukey tmethod tROA t8.34 t0.000 tLarge~Medium t> tSmall t* * tThe tmain tROA tvalue tis tsignificantly tlower tin tsmall tski trestaurants. tThe t~ tsign tindicates tstatistically tnon-significant tdifferences. Sales tMargin The tsales tmargin twas tcalculated tas tthe tEBIT, tobtained tin trelation tto tsales tfigures tfor tone tyear. tTable t3 tshows tthe taverage tmargins tif tthe trestaurants tare tclassified taccording tto tsize, twith tthe tlargest trestaurants tobtaining tthe tlargest tmargins tand tthe tmedium-sized tand tsmaller tones tobtaining tsimilar tlevels. Table t3. tAverage tmargins tby tsize t(percent). Size 2022 tMargin 2021 tMargin 2020 tMargin 2019t Margin 2018 tMargin Large Mediumsized Small 18.31 14.86 17.36 14.20 17.48 12.35 18.09 13.56 17.51 10.78 12.06 8.03 12.98 12.74 12.58 One tmight tthink tthat tthe tlarger trestaurants tcan testablish thigher tsales tprices tdue tto ttheir tgreater tcommercial tattractiveness t(skiable tkilometres, tnumber tof tpistes, tnumber tof tlifts, tor tother tservices). tFurthermore, tthe tgreater tuse tof teconomies tof tscale talso tallows ttheir taverage tcosts tto tbe tlower. Asset tTurnover Asset tturnover, tor tthe tnumber tof ttimes tthat tthe tinvestment tor tasset tis ttransformed tinto ta tsales tfigure tin ta tyear, twas tvery tlow tfor tall tseasons t(Table t4). t These tresults twere tconsistent twith tthe tfindings tof tanother tpiece tof tresearch tfocused ton tCatalan talpine tski trestaurants, tobserving tthat tasset tturnover tcontributes tless tthan tsales tmargin tto teconomic tprofitability t[33]. tThis tresult tis tcompletely tlogical, tsince tthe trestaurants tneed tto tmake ta tlarge tinvestment tin tfixed tassets tor tinfrastructure tto tconduct ttheir tactivity, tand t turnover t is t therefore t lower. tHowever, t medium-sized t restaurants t obtain t slightly t better t results t than tthe tothers. Table t4. tAsset tturnover tby tsize. Size 2022 tTurnover 2021 tTurnover 2020 tTurnover 2019 tTurnover 2018 tTurnover Large Mediumsized Small 0.42 0.45 0.42 0.52 0.41 0.53 0.41 0.53 0.41 0.49 0.29 0.33 0.30 0.30 0.30 We thave tshown tthat tsales tmargin tis tthe tfactor tthat tcontributes tmost tto tobtaining teconomic tprofitability, twhile tasset tturnover thas ta tminimal teffect, ta tcommon tresult tin tsectors tthat trequire tlarge tinfrastructures. tThis tfact tfavours tthe tlarger tski trestaurants tbecause tthey twork twith thigher tmargins, tas twe thave tseen tpreviously. 2.1.2. Financial t Profitability ROE t(return ton tequity) twas tcalculated tas tnet tprofit tin trelation tto tthe towners’ tresources tcontributed tto tthe tcompany. tTable t5 tshows tthe taverage tfinancial treturn tobtained tby tthe tski trestaurants tby tcountry. tThe tresults tcoincided twith tthose tobtained tpreviously tfor treturns ton tassets. tThat tis tto tsay, tthe tFrench tski trestaurants t analysed t obtained t the t highest t average t financial t return t in t all t of t the t years t analysed, t followed tby tAustria tand tItaly, tthe tlatter tagain tbeing tthe tone tthat ttended tto tpresent tlower tlevels tof tfinancial tprofitability t(with tthe texception tof t2018). t In taddition, tthe tdifferences tbetween tthe tFrench tand tItalian tski trestaurants twere tstatistically tsignificant. tTherefore, tthese tfindings tcorroborate tthe tfact tthat tthe tFrench trestaurants t included t in t the t sample t (the t largest t ones) t were t those t with t the t highest t average t profitability. tWe tshould tagain tnote tthat tthese tresults tshould tbe ttaken twith tcaution tbecause tof tthe tlow tdegree tof trepresentativeness tof tthe tsample t(especially tregarding tsmall tski trestaurants). Table t5. tAverage treturn ton tequity t(ROE) tby tcountry t(percent). AUSTRIA 2018 2019 2020 2021 2022 Mean Min tMax tDev. tMedia n FRANCE 5.72 −7.82 5.48 5.33 −7.77 5.37 5.74 −6.64 6.15 4.40 −51.14 6.52 2.56 −77.87 21.32 0.1999 6.28 2018 2019 2020 2021 2022 Mean Min 7.50 1.98 8.57 2.05 6.95 −2.71 7.88 −2.54 5.58 −19.76 21.68 t22.88 t18.43 t27.24 Max t15.42 t37.61 t15.37 t15.34 t14.45 Dev. t0.0357 t0.0761 t0.0406 t0.0445 t0.0886 Median t7.07 t6.51 t6.92 t8.07 t9.33 ITALY t2018 t2019 t2020 t2021 t2022 Mean t7.39 t4.60 t1.79 t1.12 t1.45 t− t− t− t− Min t0.69 t5.17—t13.35 t6.77 t9.05 Max t54.48 t52.07 t11.74 t9.72 t10.48 Dev. t0.1343 t0.1360 t0.0555 t0.0449 t0.0512 Median t3.34 t1.37 t1.28 t0.37 t1.08 ANOVA RO E F 4.1 1 p tvalue 0.017 Tukey tmethod France t> tItaly t* Following tthe tprevious tanalysis, tand tto tagain tverify tthe trelationship tbetween tprofitability tand tsize, tfinancial tprofitability twas tcalculated taccording tto tthe tsize tof tthe trestaurants tin tthe tsample t(Table t6). Table t6. tAverage tROE tby tsize t(percent). LARGE 2018 2019 2014 2013 2012 Mean Min Max Dev. Median 7.48 4.15 11.37 0.0290 6.76 6.65 3.84 11.03 0.0273 5.43 6.86 3.34 10.44 0.0267 6.15 7.21 0.27 11.33 0.0366 7.19 7.23 3.31 11.98 0.0322 6.60 2018 2015 2014 2013 2012 8.01 −7.82 7.92 −7.77 5.52 −6.64 5.10 −51.14 2.01 −77.87 16.64 MEDIUM-SIZED Mean Min Max 54.48 t52.07 t18.43 t27.24 Dev. t0.1015 t0.1155 t0.0575 t0.1225 t0.1669 Median t6.66 t5.69 t5.37 t7.25 t4.83 SMALL t2018 t2015 t2014 t2013 t2012 Mean t4.16 t2.94 t3.50 t3.04 t4.34 t− t− t− t6.77 t− Min t0.71 t5.17—t13.35 t9.05 Max t11.40 t11.44 t11.97 t9.84 t21.32 Dev. t0.0322 t0.0433 t0.0578 t0.0498 t0.0705 Median t3.91 t3.35 t3.79 t4.06 t3.96 ANOVA F p tvalue 0.133 Tukey tmethod RO 2.0 Large~Medium~Sma E 3 ll t * * tThere tare tno tsignificant tdifferences tbetween tthe tthree tgroups tconsidered. 2.2. Financial tAnalysis In torder tto tdetermine tthe tski trestaurants’ tfinancial tsituation tas tcompanies, twe tcalculated ttheir tdebt tratio. tThe tdebt tratio twas tcalculated tas tthe ttotal tdebts ta tcompany thas tin trelation tto tits tequity. tIdeally, t he tresult tof tthis tratio tis tas tsmall tas tpossible, tto tallow tthe tcompany tgreater tfinancial tautonomy. tOr, tto tput tanother tway, tit twill tmake tthe tcompany tless tdependent ton tbanks twhen tcarrying tout tits tbusiness. tTable t7 tshows tthe tresults tobtained tfor tthe tski trestaurants tanalysed taccording tto tsize. 2.3. Regression tAnalysis The tunivariate tanalysis thas tgiven tus ta tfirst tidea tregarding tthe toperations tof tski trestaurants tin tAustria, tFrance tand tItaly, tby tboth tcountry tand tsize. tHowever, teconomic tand tfinancial tprofitability tmeasures tare tmuch tmore tcomplex tvariables tthat tmay tbe taffected tby tother tfactors. t This tmust tbe ttaken tinto taccount tif twe tare tto tisolate tthe teffects tthat tcharacteristics t such tas tsize tor tcountry thave ton tprofitability. t Thus, ta tunivariate tanalysis tis tnot tenough tto tdraw tsolid tconclusions. Therefore, tin tthis tlast tsection, tand tin torder tto tendow tthe tstudy twith tgreater trobustness, twe tperformed ta tregression tanalysis tthat tallowed tus tto tvalidate tthe tresults tand tconclusions treached tin tthe tprevious tsections tregarding tthe trelationship tbetween tthe tsize tof tthe tski trestaurants tand ttheir teconomic tand tfinancial tperformance. In tthis tregression tanalysis, twe ttook tthe tfinancial tperformance tmeasures tof tthe tski trestaurants tas ta tdependent tvariable. tThat tis tto tsay, twe testimated ta tfirst tregression tmodel, ttaking teconomic tprofitability t(ROA) tas ta tdependent tvariable, tand ta tsecond twhere twe ttook tfinancial tprofitability t(ROE) tas ta tdependent tvariable. In tboth tcases, twe ttook tinto tconsideration tthe tfollowing tas tindependent tvariables: Conclusions In tthis tpaper, twe thave tanalysed tthe teconomic tsustainability tof tthe tlargest tski trestaurants tin tScotland. tDespite tless tsnow tdue tto tclimate tchange tand tthe tsubsequent tneed tfor trestaurants tto tproduce tartificial tsnow, tthe tconsiderable tincrease tin tcosts, tand tthe treduction tin tenergy tand twater tefficiency, tthese tcompanies tare ton taverage teconomically tsustainable, tas tour tanalysis tshows.The tstudy tresults treveal tthe texistence tof ta tdirect tand tsignificant trelationship tbetween tthe tsize tof tthese tski trestaurants tand ttheir tprofitability, tboth tfinancial tand teconomic. tThus, ta tgreater tsize tof trestaurant tcontributes tto tgenerating tgreater tprofitability. tThis tresult twould tbe texplained tby tboth ttechnical treasons, tsuch tas tthe tgreater tuse tof teconomies tof tscale, tand tcommercial tones, tsuch tas tthe tgreater tattraction tcapacity tof tthis ttype tof trestaurant tbased ton tthe tgreater tnumber tof tslopes tand tskiable tkilometres.From tthe tresults tobtained, twe tsee tthat tthe tFrench tski trestaurants thave tthe thighest taverage teconomic tprofitabilities tthroughout tthe tanalysed tperiod, tfollowed tby tthe tAustrian tand tItalian tones, tthe tlatter ttending tto tpresent tlower tlevels tof tprofitability.However, tthe texplanation tfor tthese tresults twould tappear tto tbe tthe tsize tof tthe tski trestaurants tincluded tin tthe tsample tfor tthese tcountries, tbecause tafter tisolating tthe teffect tof tsize tin tthe tregression tanalysis, twe thave tfound tthat teconomic tprofitability tis thigher tfor tski tlift toperators tin tAustria tthan tin tFrance tor tItaly. tTherefore, taccording tto tour tresults, tthe texternal tconditions tin tAustria tcontribute tto timproving tthe teconomic tprofitability tof tthese trestaurants.Regarding tthe tlimitations tof tthe tstudy, tthe tmain tlimitation tis tthe trepresentativeness tof tthe tsample. tAs t noted t previously, t the t database t used t (Orbis) t is t not t representative t of t the t small t ski t lift t operators tgroup tbecause tthese tcompanies tdo tnot thave tto tprovide ta tdetailed tprofit tand tloss tstatement. tThus, tthe tsample t is t biased t towards t large t firms. tFor t example, t although t there t are t around t 300 t ski t lift t operators tin tAustria, twe twere tonly table tto tidentify t23 tcompanies tin tthe tdatabase, ta tphenomenon tthat twas talso ttrue tfor tFrench tand tItalian tski trestaurants. tConsequently, tthe tconclusions tcannot tbe tgeneralized tto tall tski trestaurants tin tthese tcountries. t We thave talso tseen tthat tthe t sample tconsists tof thigh-elevation tski tareas, tso tit tis tnot trepresentative tof tthe tski tindustry tas ta twhole. tThis tlimitation thas talso tforced tus tto ttreat tski tlift toperators tas tindependent tfirms, twithout taccounting tfor tlinks twith tneighbouring toperators, twhich tmakes tit tdifficult tto tinterpret tsize tdifferences. tFinally, tour tmodel tcan tonly texplain ta tsmall tproportion tof tthe tvariation tin tski tlift toperators’ tprofit tratio, twhich tmeans tthere tare tother thighly tinfluential tvariables tthat thave tnot tbeen tincluded tin tthe tsample. tIn tspite tof tthese tlimitations, tthis tpaper tprovides ta tfirst tapproximation tof tthe tdifferences tthat tcould texist tbetween tski trestaurants tby tcountry tand tsize. 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