Skiers are quickly facing a new reality: ski seasons are shorter, winters are warmer, and snowfall is less predictable. The last fifteen years have been the warmest on record, with 2016 on pace to be the warmest year since 1880. [1,2] In fact, average December-February temperatures in the U.S. have increased on average 0.55oF per decade since 1970, a trend that is expected to continue.  These changes, which many attribute to climate change, could spell disaster for the $12bn winter sports industry, which is dependent on predictable snowfall.  Resort operators, such as Vail Resorts, are at particular risk given high fixed costs and required infrastructure investments. Vail is the world’s largest publicly-traded ski resort operator with a $5.5bn market cap and resorts in the U.S., Canada, Australia, Latin America, UK, and Asia. Vail has been at the forefront of responding to climate change by investing heavily in (i) geographic diversification, (ii) technologies aimed at reducing dependence on natural snowfall, and (iii) business model diversification.
Core to Vail’s proactive response has been a deliberate strategy of geographic diversification. As mentioned, Vail has a global portfolio of ski resorts in the U.S., Canada, Australia, Latin America, UK, and Asia that includes resorts such as Vail, Beaver Creek, Breckenridge, Keystone, and Park City. In fact, in August 2016, Vail announced the acquisition of Whistler Blackcomb, North America’s largest ski resort operator, for C$1.4bn, further diversifying its global resort portfolio. According to Vail management, this geographic diversity provides a buffer against unpredictable weather and droughts, both of which are expected to increase with climate change. According to the Whistler Blackcomb’s CEO:
Our board of directors has also been monitoring the unique challenges facing the broader ski industry due to the unpredictability of year-to-year regional weather patterns. Whistler Blackcomb, with its unprecedented acreage of high alpine terrain and Glacier bowls, is well positioned, but by no means immune to these challenges. Partnering with the geographically diversified Vail Resorts … are customer-focused ways of securing the long-term future of our resort, our industry and our community. 
Vail views it globally diversified portfolio, which includes diversity across region, latitudes, and elevations, as an effective hedge against an uncertain future that will unavoidably be impacted by climate change. Certain resorts will benefit as warmer temperatures lead to stronger winter storms, while other resorts will suffer as warmer temperatures result in reduced snow coverage. Overall, by holding a diversified resort portfolio, Vail will be able to reduce the impact of variability in snow conditions on profitability and cash flows.
Vail’s second strategy to cope with climate change has been an initiative focused on technology investments. Vail, for example, has invested heavily in efficient artificial snowmaking to reduce dependence on natural snowfall. These required technology investments, coupled with increased variability in snowfall, has led the number of ski resorts in the U.S. to decline from 546 in 1992 to 463 today.  Importantly, Vail has also proactively ensured sufficient water rights for its snowmaking infrastructure, limiting the risk of water shortages from future droughts and climate change. At Keystone and Breckenridge, for example, Vail has acquired a non-controlling interest in the regional Clinton Reservoir to ensure water availability.
Vail’s final strategy to cope with climate change has been business model diversification. In particular, Vail has dealt with weather variability by introducing summer activities at its resorts to increase year-round tourism. Whistler, for example, recently announced a $345 million development project aimed at building a 163,000 ft2 indoor waterpark and rock climbing facility, hiking and biking trails, and additional luxury accommodations with the goal of making the resort “weather independent.” Certain competitor resorts, especially in Australia and Europe, have even gone as far as installing artificial ski slopes made of carpet-like material that allow snowless skiing. While Vail hasn’t yet introduced any ‘dry slopes,’ Vail continues to explore the most innovative business models to diversify its business and reduce its exposure to weather volatility.
Overall, Vail has been at the forefront of the ski resort industry’s investments focused on coping with climate change. The ski resorts industry is unique that it has already been forced to adapt to climate change impacts by strategically reconsidering its core business model. While Vail has effectively adapted to climate change via geographic and business model diversification and the introduction of technology, Vail, however, has failed to enter the debate around green and renewable energy (e.g., solar, geothermal, wind). As Vail pivots from reacting to proactively investing for the future, Vail should focus its investments on reducing its carbon footprint. While we must each adapt to climate change’s direct impacts, only by reducing our emissions footprint can we truly make a lasting difference. Only by investing for the future can we protect the remaining natural snowfall that we have left.
 NASA, “2016 Climate Trends Continue to Break Records,” http://www.nasa.gov/feature/goddard/2016/climate-trends-continue-to-break-records, accessed November 2016.
 National Centers for Environmental Information, “Global Analysis – Annual 2015,” https://www.ncdc.noaa.gov/sotc/global/201513, accessed November 2016.
 National Oceanic and Atmospheric Administration – United States Department of Commerce, “Average U.S. Temperature Increases by 0.5 degrees F,” http://www.noaanews.noaa.gov/stories2011/20110629_newnormals.html, accessed November 2016.
 Burakowski, Elizabeth and Matthew Magnusson, “Climate Impacts on the Winter Tourism Economy in the United States,” ProtectOurWinters, https://www.nrdc.org/sites/default/files/climate-impacts-winter-tourism-report.pdf, accessed November 2016.
 “Vail Resorts and Whistler Blackcomb Agree to Strategic Combination,” press release, August 8, 2016, Vail Resorts website, http://investors.vailresorts.com/releasedetail.cfm?ReleaseID=983315, accessed November 2016.
 “U.S. Ski Resorts in Operation during 2015/16 Season,” National Ski Areas Association, http://www.nsaa.org/media/275065/Number_of_Ski_Areas_by_Season_1516.pdf, accessed November 2016.