Limited road access and high electricity costs are being blamed for the poor financial performance of the Mount Baw Baw Alpine Resort, east of Melbourne.

More than 50,000 people flocked to Mount Baw Baw during the winter months, making it a record season.

The resort's management board says despite the record number of visitors, an unsealed road and the cost of generating power are limiting its potential.

The Mount Baw Baw Alpine Resort reported a $2.3 million deficit last year, while Government funding dropped from more than $5 million in 2011 to $1.4 million in 2012.

In the resort's annual report, CEO Stuart Ord says expenditure is a continuing problem for the resort.

He says finding the resources to seal the South Face Road and connect the resort to the electricity grid are a key challenge.