Investment Projects, Business Armenia Ski Resort in Vanadzor | Page 16

Risks and Risk Mitigation
There are several risks that can
potentially slow down the successful
implementation of this project.
The first risk is related to the
incomplete destination identity of
Vanadzor city which lacks places of
leisure and entertainment. However, it
should be highlighted that apart from this
project, there are a number of others that
fit within the general concept of
development of the city of Vanadzor and
all these projects are planned to be
implemented in parallel to fill the existing
gaps. Also, considering the huge alpine
potential of Vanadzor, it is obvious that in
this case the supply will create more
demand. Moreover, the project will have
a spinoff effect, and small and medium-
sized businesses will be established in
support of the ski resort.
Another risk for this project is
seasonality. Obviously, all winter sports
destinations face this issue. However, this
project includes services, which can
operate and generate income all year
round such as tubing, tobogganing, etc. In
fact, the resort will be a great summer
destination with fresh and cool air in
highlands, with a resort offering various
services for a nice summer experience.
The project is also subject to economic
risks. Both national and international
economic slowdown may decrease the
spending amounts of the tourists, which,
in turn, could negatively impact the
resort’s operating results. However,
consideri ng the stable macroeconomic
indicators of Armenia, as well as
incomparably cheaper prices in the global
market, alpine resorts in Armenia may
become a good alternative to existing
well-known destinations.
15