Dear Rob:<\/p>\n
With Vail\u2019s opening day just two weeks ago and barely a dusting of snow on the resort\u2019s signature mountain, Vail Resorts is once again facing the cold reality of climate change. Over the past decade since you have assumed the CEO position at Vail Resorts, you have experienced acutely the impact of climate change, notably warmer weather and fluctuations in precipitation. I know that you understand the significance of climate change as you have previously stated that you are \u201cin the category of someone who is very worried about climate change\u201d[1]<\/a>. The actions that you have undertaken as CEO are consistent with those beliefs. However, more must be done \u2013 and must be done now \u2013 if Vail intends to remain one of the world\u2019s premier resort companies.<\/p>\n Across the United States, winter temperatures have increased 0.2 degrees Fahrenheit per decade since 1895 but this rate has climbed to almost 0.6 degrees per decade since 1970 \u2013 with the warming trends experienced more acutely in the Northern part of the country[2]<\/a>. This trend of warmer weather translates into shorter ski seasons, fewer visitors to the resorts and thus less revenue for the ski industry. In 2012, the Natural Resources Defense Council found that the downhill ski industry lost $1.07bn in revenue between the high and low snow fall years over the previous decade[3]<\/a>.<\/p>\n Vail Resorts is a leader in sustainability. You have shown that you are focused not only on reducing your impact on the environment but also accommodating the inevitable changing climate.<\/p>\n Your commitment to aggressive energy reduction shown through the \u201cTarget 10\u201d program and then \u201cThe Next Ten\u201d program \u2013 both aimed to reduce energy usage by 10% from previous levels \u2013 is industry leading[4]<\/a>. These reduction efforts not only lower the company\u2019s greenhouse gas contributions, helping to reduce the rate of global warming overall, but also signal to your customers about the character of the company.<\/p>\n In terms of accommodation of climate change, your acquisition of Whistler Blackcomb in August offers geographic diversification to your existing portfolio of mountains concentrated in Colorado, Northern California and the Midwest. In addition to providing diversification from those weather patterns in those regions, the resort\u2019s status as a top #3 resort in North America is consistent with your portfolio of premier mountain resorts[5]<\/a>. Furthermore, Whistler attracts a different client base, predominantly drawing skiers from the Vancouver, Seattle and international markets, mitigating any risk of cannibalization of your existing clientele[6]<\/a>.<\/p>\n Your intention to convert \u201cregional, weather sensitive\u201d guests to season passes is a strong decision, providing upfront revenue and mitigating the risk that potentially poor conditions over the course of a winter season do not generate as many day trips[7]<\/a>. In addition, your commitment to building a network of customer engagement at your resorts will provide a superior customer experience and allow you to capture more share of your customer\u2019s wallet \u2013 even when ski conditions are weak[8]<\/a>.<\/p>\n Unfortunately, patterns of warmer and more extreme weather are predicted to continue \u2013 and even worsen[9]<\/a>. If Vail Resorts wants to continue to remain the industry leader in premier resorts, the company must further the diversification of resort locations and development of non-snow dependent offerings.<\/p>\n While the addition of Whistler is progress, Vail Resorts should consider acquiring some of ski mountains in Vermont. For example, you shared in your 2015 investor presentation that Tahoe received \u201crecord low snowfall that resulted in poor conditions and disengaged market\u201d in the winter of \u201915. While Tahoe was suffering from a drought and difficult snow conditions, resorts in Vermont benefitted from an abnormally snowy winter. In 2015, the Northstar Mountain in Tahoe only had 33 days of snow while Stowe in Vermont had 57 days of snow[10]<\/a>. Patterns of severe weather fluctuations are expected to continue. Therefore, acquisitions of ski resorts across the country will help mitigate some of the risks of intense weather variations in specific regions.<\/p>\n Furthermore, Vail Resorts should strongly consider adding more activities and programs throughout the year. Given that the winter ski season may be shortened due to global warming, Vail should increase the quality of non-winter activities. For example, Vail could add fly fishing programs and acquire local golf courses to attract more visitors in the summer months. During the fall and spring shoulder seasons, Vail Resorts could offer more retreats, concerts and festivals. And, even in the winter months, the Company should consider increasing the number of non-snow related attractions.<\/p>\n Vail Resorts has taken strong initial steps to both adapt to and mitigate against climate change. However, as the effects of global warming continue to grow, additional steps must be taken to ensure the long-term viability of the company.<\/p>\n Sincerely,<\/p>\n Mary<\/p>\n Words (773)<\/p>\n [1]<\/a> Robert Katz, \u201cSkiing won\u2019t be the greatest loss after climate change\u201d, Denver Post, December 21, 2012, http:\/\/www.denverpost.com\/2012\/12\/21\/skiing-wont-be-greatest-loss-after-climate-change\/<\/a>, accessed November 4, 2016<\/p>\n [2]<\/a> Jens Hesselbjerg Christiansen, Bruce Hewitson, \u201cRegional Climate Projections\u201d, Intergovernment Panel on Climate Change, \u00a0https:\/\/www.ipcc.ch\/pdf\/assessment-report\/ar4\/wg1\/ar4-wg1-chapter11.pdf<\/a>, accessed November 3, 2016<\/p>\n [3]<\/a>Elizabeth Burakowski, Matt Magnusson, \u201cClimate Impacts on the Winter Tourism Industry in the United States\u201d, Natural Resource Defense Council, December 2012, https:\/\/www.nrdc.org\/sites\/default\/files\/climate-impacts-winter-tourism-report.pdf<\/a>, accessed November 3, 2016<\/p>\n [4]<\/a> http:\/\/www.vail.com\/mountain\/environment.aspx#\/EnergySavingsTab<\/a><\/p>\n [5]<\/a> Christopher Steiner, \u201cThe Top 10 Ski Resorts in North America for 2016\u201d, Forbes, November 17, 2015, http:\/\/www.forbes.com\/sites\/christophersteiner\/2015\/11\/17\/the-top-10-ski-resorts-in-north-america-for-2016\/2\/#1159123075a6<\/a>, accessed November 4, 2016<\/p>\n [6]<\/a> Jesse Paul, \u201cVail Resorts to buy Whistler Blackcomb in $1billion deal\u201d, Denver Post, August 8, 2016, \u00a0http:\/\/www.denverpost.com\/2016\/08\/08\/vail-resorts-acquires-whistler-blackcomb\/<\/a>, accessed November 4, 2016<\/p>\n [7]<\/a> Vail Resorts\u2019 2016 Investors\u2019 Conference Presentation, March 15, 2016, http:\/\/files.shareholder.com\/downloads\/MTN\/3155233169x0x881212\/9EAD6DC8-6738-45E0-8567-B306538E30E1\/2016_Investor_Presentation_vFINAL.pdf<\/a><\/p>\n [8]<\/a> Vail Resorts\u2019 2016 Investors\u2019 Conference Presentation, March 15, 2016, http:\/\/files.shareholder.com\/downloads\/MTN\/3155233169x0x881212\/9EAD6DC8-6738-45E0-8567-B306538E30E1\/2016_Investor_Presentation_vFINAL.pdf<\/a><\/p>\n [9]<\/a> Greg Shirah, \u201cNational Climate Assessment: 21st<\/sup> Century Temperature Scenarios\u201d, March 7, 2013, http:\/\/svs.gsfc.nasa.gov\/cgi-bin\/details.cgi?aid=4029<\/a>, accessed November 4, 2016<\/p>\n [10]<\/a> http:\/\/www.onthesnow.com\/vermont\/stowe-mountain-resort\/historical-snowfall.html?&y=2015<\/a>, accessed November 4, 2016<\/p>\n","protected":false},"excerpt":{"rendered":" Dear Rob: With Vail\u2019s opening day just two weeks ago and barely a dusting of snow on the resort\u2019s signature mountain, Vail Resorts is once again facing the cold reality of climate change. Over the past decade since you have […]<\/p>\n","protected":false},"author":2404,"featured_media":12026,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-12025","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\n