Rob Katz, CEO of Vail Resorts, has a particular question on his mind today – Will Vail be able to welcome skiers to its slopes next week? Opening day has already been delayed due to poor snow conditions, and while management is optimistic, the outcome of a predicted storm this weekend may be the deciding factor. 
Rise in Temperature, Decline in Snowfall
Climate change has impacted Vail’s most critical supply chain input – snow. With the average global surface temperature rising by 1.5 degrees Fahrenheit between 1880 and 2015 , average annual snowfall has been on the decline, as shown in Figure 1. 
The reality of these statistics affect Vail’s snow supply in several ways:
- Increased reliance on artificial snowmaking technology – Natural snowfall, especially during early season, is extremely variable. Vail needs to rely on snowmaking to guarantee a snow source throughout the season.
- Increased reliance on a consistent water source – Vail’s ability to procure artificial snow is dependent on its access to a water supply. Vail is subject to water regulations and restrictions enforced by federal, state, and local governments. 
- Lower snow base quality – Vail relies on cold temperatures and natural precipitation throughout the season to maintain a consistent, quality snow base.
If Vail is unable to maintain its snow supply, it will face critical operational implications. Being fully operational in time for the Christmas and New Year holidays is critical for a profitable year. Today, about 70% of resorts can achieve an opening day by December 15. In modeled climate scenarios, this percentage decreases to 35% in 2050 and less than 23% in 2090.  Vail also faces the risk of closing prior to spring break holiday, another massive revenue generating period.
Even when the resorts are open, if snow conditions are poor, customers may become dissatisfied which leads to lower overall traffic and thus, less profitable operations. Figure 2 illustrates less than ideal conditions at Beaver Creek Resort in late March this year.
Taking Action Today
Vail is acutely aware of these challenges and has taken action to mitigate risks. In the short-term, the company is focusing on:
- Investing in robust snowmaking systems – Vail continues to invest in advanced machinery to maximize artificial snow production. Its newest machines include low-energy technology to reduce carbon emissions.
- Enhancing off-mountain guest experience – Vail is developing attractive lodging, dining, shopping, and leisure options to create a comprehensive guest experience. This will help visitors to have a positive, memorable experience, regardless of snow conditions.
- Developing summer programming – Vail has spent $41 million to build out its Epic Discovery program which focuses on off-season activities including zip lines, climbing walls, and outdoor playgrounds. 
Investing in the Future
In addition to short-term tactics, Vail recognizes the gravity of this situation on its resorts’ long-term viability and has made notable long-term plays:
- Commitment to zero footprint by 2030 – Vail recently publicized its commitment to striving for zero net emissions, waste to landfill, and net operating impact to habitat by 2030. It has begun to reduce emissions through investments in efficient grooming equipment, green building design, renewable energy sources, and carbon offset programs. 
- Partnerships with climate and energy policy organizations –Vail is a member of both Ceres Business for Innovative Climate and Energy Policy and RE100. These relationships help to Vail to tackle climate change on a larger scale. 
- Diversification of resort locations – Vail is acquiring resorts in varied geographies to diversify risk resulting from weather patterns. Figure 3 highlights its U.S. footprint.  Vail has acquired resorts in Canada and Australia and is currently focusing on opportunities in the Japanese and European markets. 
While it’s evident that Vail is taking action to address climate change, I have several additional recommendations for Katz and his team:
- Maximize mid-season attendance through targeted events – The probability of ideal snow conditions in highest during mid-season. Vail should develop new events to attract a large volume of visitors during non-holiday, mid-season weekends.
- Embed customers in the Vail ecosystem – Vail should continue to look for ways to engage and retain customers through attractive membership programs, superior customer service, and unique product offerings.
- Partner with U.S. Ski and Snowboard and the International Ski Federation – These governing bodies have a close pulse on how the ski industry is affected by climate change on a global scale. Through this partnership, Vail can identify related risks and opportunities at a quicker pace.
A few other elements to reflect on:
- What will happen if the water supply for snowmaking is threatened? Are there non-water alternatives being explored?
- As Vail diversifies internationally, should they continue to acquire resorts or consider new development? What environmental restrictions do they face abroad for new development?
Despite the ever-present risks surrounding snow supply, I am optimistic that Vail will aggressively and creatively confront these challenges.
(Word Count: 788)
 Miller, Scott, “Next snow in Vail is expected this Friday, but how much is unclear,” Vail Daily, November 13, 2017, http://www.vaildaily.com/news/next-snow-at-vail-is-expected-on-friday-nov-17-the-resorts-opening-day/, accessed November 2017.
 Henderson, R. M., et al, Climate Change in 2017: Implications for Business (HBS No. 317-032)
 Donna Bebb, “Climate Exposure Impact on Equity Valuation: Case Study of Vail Resorts, Inc,” Steyer-Taylor Center for Energy Policy and Finance. http://media.law.stanford.edu/organizations/programs-and-centers/steyer-taylor/Vail_Final.pdf, accessed November 2017.
 Vail Resorts, 2017 Annual Report, p.87.
 Wobus, Cameron, et. al, “Projected climate change impacts on skiing and snowmobiling: A case study of the United States,” Global Environmental Change 45 (2017): 3, https://ac.els-cdn.com/S0959378016302849/1-s2.0-S0959378016302849-main.pdf?_tid=c931fe5c-ca5f-11e7-b3e8-00000aab0f02&acdnat=1510790020_f36d9995b9db94a57ece768af388c3a6, accessed November 2017.
 Vail Resorts, “2017 Investors Conference,” PowerPoint presentation, March 14, 2017.
 Vail Resorts, “Epic Promise,” https://www.vail.com/the-mountain/more-options/sustainability.aspx, accessed November 2017.
 King, Danny, “Melting snow: The consolidation of the ski resort industry,” Travel Weekly, November 8, 2017, http://www.travelweekly.com/Travel-News/Hotel-News/Melding-snow-consolidation-ski-resort-industry, accessed November 2017.