Stories of the pandemic: how one ski company went off-piste but came back stronger
Updated: Oct 5, 2021
The pandemic has been tough for everyone in the travel industry. VIP SKI was set up 30 years ago, running 60 chalets in ten resorts across the Alps. 2020 saw the company file for bankruptcy but now it’s back and preparing for the upcoming winter season with renewed vigour.
We spoke recently with its CEO, Andy Sturt, about the last eighteen months, his own annus very horribilis, and his thoughts on the upcoming ski season.
What’s the potted history of VIP?
I skied a bit while I was at university at Guildford in the eighties then toured round the States and ended up teaching aerobics in San Diego.
While I was there, I got a call from someone asking if I wanted to come back and ski guide in the Alps, which I did for a winter but bust my ACL at the beginning of the next one and so had to find a way of making a living off the hill.
During that time, I met a bunch of people who wanted to invest in mountain property. I set up an agency called Alpine Property Search – I was a conduit between those who wanted to buy property, French banks who’d be willing to lend and tour operators who’d take on the lease to manage the assets. So, we kind of grew from there.
As time went on, we replaced self-catering with staffed accommodation, I took the place of the tour operators and did that side of things myself, and we added chartered flights out of the UK.
As the pandemic hit last year, how and when did things start to unravel?
It was the autumn (2020). In the Spring, we’d lost a quarter of our season and there was no way of mitigating our costs away, so we’d had a one-off hit of a quarter of our annual turnover.
But our customers were incredibly supportive and initially weren’t asking for their money back. They hoped to travel with us again, so they effectively left around £4.5m with us, but that still meant at some point we’d have to provide them with a holiday, and pay for it again, of course.
So, with that money it meant we didn’t have a cash-flow problem. We got a CBIL and used the furlough scheme as well.
Things would have been fine, but the death spiral started when the government refused to stand behind ‘refund credit vouchers’ and there was a concerted push to remind people about demanding their 14-day money back rights. That’s what clients started to do.
We were on the phone 24/7 explaining to customers that we couldn’t refund everyone all at once, just like a bank doesn’t really ever keep enough cash to refund all customers at once or there’d be a run on the financial system.
Eventually the CAA stood behind credit vouchers, but the mixed Foreign Office travel advice in the autumn combined with relentless campaigning around mandated 14-day refunds and confused messaging about travel regulations and lockdowns made it extremely difficult for customers to have confidence.
There was also a great deal of public campaigning about credit-card chargeback, which naively I didn’t really know existed till then. Essentially if you pay by credit card and don’t receive a holiday on the original date, even if we promised to provide it again later, then you can call up the bank and they give you your money back, customers started to do this. So suddenly we could see money draining out of our accounts.
We had to maintain our infrastructure for the 21/22 season because we had an obligation to provide holidays for all those who still wanted to defer for a year, but effectively our bank accounts no longer became secure assets because customers, if they chose, could withdraw funds when they chose through chargeback, so from a commercial perspective, things became impossible to manage.
What happened next?
It became clear at the beginning of November that there was no way out, the resorts were unlikely to open for the following season and we couldn’t refund everyone and remain solvent. I wanted to do the best that I could for everyone involved, starting with our customers, but also our full-time staff, seasonal staff, landlords, owners, and suppliers across the Alps.
For our customers it was a question of triggering ATOL & ABTOT bonds through insolvency so that everyone was repaid. Most received their refunds very quickly but some are still to claim and so we are still helping our customers to recover their money now, nine months later.
We paid our landlords up to the beginning of the season and so, in retrospect, they lost nothing compared to what they would have earned with any other operator. We made sure seasonal staff were aware before they’d become too committed. And then it became an exercise in communicating with everyone honestly and trying to cause the minimum amount of pain, disruption and financial loss as possible.
If there was one “Oh s**t” moment, what was it?
I’m not sure there was one – it was all so progressive. But maybe it was when I had to gather all the sales staff and tell them the final decision. Or maybe telling my children who promptly burst into tears. I think by nature we tend to forget the most painful moments.
And how were things for you personally during all this?
Horrendous. It’s like putting a bomb under thirty years of your life. Everything you’ve believe in and everything you’ve invested in for thirty years, just destroyed. I’ve always thought if the worst happened, I could put a backpack on and start again somewhere else, but actually, when reality hit, it was all pretty brutal.
Your blind faith that it will all be OK if you stick to the basic principally of honesty, hard work and integrity, which had carried us through many difficult times over 30 years, gets really shaken up.
How did you start to bring things back?
First, I had to firefight and think ‘how do I stabilise this to maintain normality?’ and that’s quite complicated. I received a huge amount of support both from customers, those in the industry and people who’d been in the same position as me in the past. A few of the letters and emails basically said: ‘I’ve always regretted not giving things another go’. So, I thought about the community we’d built and how important that was and how I might try and put that community back together.
We got to a position just before Xmas where the Administrator auctions your assets and you go into this awful process, a closed-bid auction, trying to buy back what you’ve made. There’s a legal obligation to speak to other parties involved to explain the business, the process was horrendous, but through some luck I won in the end and was able to buy it all back.
However, having put a bomb under 30 years of work, the debris was spread all over Europe. In January I started going out and collecting all the different pieces; staff, chalet contracts, banks, suppliers, a raft of overseas bureaucracy .... it’s like spinning lots of plates with multiple layers of jeopardy until you get all the planets aligned, think I’m probably mixing my metaphors there. Suffice to say it was ‘day at a time’ for a long while and there were days when I just sat at my desk with my head in my hands and shook with the enormity of the task.
We got there in the end and opened on 1 June (2021).
How is VIP Ski now different to how you were a few years ago?
Leaner and keener, I guess. We’re taking back the best bits. Best property, best staff, best practice.
With a blank sheet of paper, you just try not to make the mistakes of the past and project ten years forward to think about the expectations of the future. We have made changes that we had put off for years, like focusing on ski-in ski-out and altitude, Val d’Isère, Les Arcs and Avoriaz, so that distance from piste and snow conditions no longer need mention, moving away from charter flights to give guests the choice of their own favourite airline or departure point, a transport hub at Geneva with subsidised private taxis to give an affordable travel experience coherent with the rest of our product.
Small but significant changes that we had put off in the past.
What are your expectations for the coming season?
We’ve got half as many properties and we’re aiming for about 6,500 guests this winter compared to 10,500 in 2019/20. We’re not far off half sold at the moment. We’d normally expect to be 80 per cent sold by Christmas so if we can get to 70 per cent sold by then, we’ll be alright. There’s very little supply because most people have been blown away.
There’s Brexit too of course but clients won’t notice anything different, apart from a different immigration queue at Geneva, although the amount of behind-the-scenes employment paperwork we’ve had to deal with is staggering.
From a Covid perspective it’s looking like a face covering in closed lifts such as cable cars and bubbles, not hard for a skier, and the NHS double jab app to get into bars and restaurants. Not having to test whilst away is a really welcome change. Fingers crossed.
I’ll rest easy next April when we have the season under our belt.
I’ve had easier years in my life.
picture credits: top photo = Andy Sturt: skiing photos = Maarten Duineveld at Unsplash; ski apartment photo = Remi Bertogliati at Unsplash - many thanks!