Ski-nomics: The Business of Ski Resorts in a Future with Less Snow

While some resorts are struggling, Vail group is expanding and insulating itself

On a recent winter weekend, Kirkwood's slopes had bare patches.

What a difference a season makes at one laid-back California ski area known for deep powder, sweeping bowls and short lift lines.

Kirkwood Mountain Resort, located 35 miles southwest of the glittering mega resorts of Lake Tahoe, is well off its average of 500 inches of snow per year (and a far cry from last year’s record-setting 748 inches). This weekend’s North Face Masters big mountain snowboard competition has been postponed because of lack of snow on the area’s high cirques. And last Wednesday, the resort was bought for $18 million by Colorado-based Vail Resorts.

Kirkwood’s purchase by Vail, a company whose aggressive expansion and intensive development at its other ski areas (including Tahoe resorts Heavenly and Northstar) may portend multi-million dollar ski chalets, luxury boutiques and high-speed gondolas — all things the remote Kirkwood has eschewed in its 40 years of operation.

But according to some industry watchers, Vail’s business model may offer economic insulation from a changing climate, as California’s mountain snowpack is projected to decline by as much as 25% by mid-century.

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Tahoe Forecast: Shrinking Snow, Longer Walk to the Water

Lake Tahoe's water level could drop within the century. (Photo: Lauren Sommer)

The average snowpack in the Tahoe Basin could decline 40 to 60% by 2100 and some years could see all rain and no snow. That’s according to climate change forecasts released this week by the UC Davis Tahoe Environmental Research Center.

The decrease in snowpack would be driven by two processes, according to study author Geoffrey Schladow. With warmer temperatures, more precipitation will fall as rain during the winter, instead of snow. And as any skier knows, when rain falls on snow, it melts the snowpack in what scientists call “rain-on-snow” events.

These findings are a concern since the Sierra Nevada snowpack is often called California’s “frozen reservoir.”  That reservoir is critical to the state’s water supply — and it’s free. “What the snowpack affords us is a way to very economically store water,” said Schladow. “If the water is falling as rain, rather than snow, then we have to build more dams and reservoirs to catch it, which is expensive.” Continue reading