Chapter 2: Antecedents to the Performances of Mountain Ropeway Companies: Empirical Evidence for Switzerland

In this chapter, the performance of Swiss mountain ropeway companies in the period from 2011 to 2016 have been analyzed. The sample includes 194 observations from 43 companies, covering about 90% of the market. In order to explain the levels of cash-flow returns, the degree of self-financing and revenue growth for ropeway companies, firm-specific characteristics, meteorological data, infrastructure information and market-specific factors were taken into account. The results, which are based on a general method of moments estimates, reveal that a high equity ratio and consistent capital expenditures are important for performance. Also, the market environment, including such factors as exchange rates and brand recognition of ski areas in Europe and Asia, are important for firm performance. Overall, the Swiss market is a unique country for this type of analysis, given either that the required data on mountain ropeway companies in other countries are unavailable or that a few rather large companies dominate the market.