‘Serious questions’ have been raised about the sustainability of the Cairngorm mountain snow centre, a new report has said.
Highlands and Islands Enterprise (HIE) stepped in to save the resort for the second time when its operator went into administration in November 2018.
Now Audit Scotland has recommended the enterprise agency “consider fully the options available before deciding on a new operating model for Cairngorm Mountain”.
In a report detailing the problems faced by the resort – which is the largest of five snow centres in Scotland – Audit Scotland said the closure of the funicular railway in September 2018 was the “main catalyst” for operator Cairngorm Mountain Limited (CML) entering administration.
The funicular railway was installed in 2001 as part of efforts to regenerate Aviemore.
It could cost between £10m and £15m to reinstate, however removing it is also estimated to cost some £13.3m.
HIE has set up a new subsidiary, Cairngorm Mountain (Scotland) Limited (CMSL), to take over the operation of the resort.
Audit Scotland said it has “made progress in addressing some of the issues that arose under CML” but noted the new body generated an income of £243,000 between December 2018 and the end of March 2019, against expenditure of £804,000, leaving it with a deficit of £561,000.
The report says: “HIE must also reflect on the issues that have affected Cairngorm Mountain in the past and learn from them to develop a financially sustainable model.
“HIE has had to step in to take over operations at Cairngorm Mountain twice in the space of 10 years.
“This raises serious questions about the sustainability of the business operating under the current model.”
The report adds: “It is a business that is very reliant on weather conditions and any operator is likely to face unpredictable levels of turnover.
“With Cairngorm Mountain operating in already challenging circumstances, it is even more important that good management and decision-making structures are in place to avoid creating additional difficulties.”
The spending watchdog recommended ministers work with HIE to “identify what financial support will be needed for Cairngorm Mountain and how this cost will be met”.
It also called on the Scottish Government to “examine the long-term sustainability of the snow sports industry in Scotland and consider any future financial support in the light of its wider economic priorities”.
Auditor general for Scotland Caroline Gardner said: “HIE and the Scottish Government now face tough decisions on how to secure a sustainable operation at Cairngorm Mountain.
“The Covid-19 pandemic increases the uncertainty around the costs and business model required for the mountain in the longer-term.
“Any future spending decisions need to be informed by the wide range of groups with an interest in the mountain.
“And it’s important they should take into account the resort’s social and environmental impact alongside its economic benefits.”