(Bloomberg) -- The world’s largest ski resort operator is looking to snap up more Alpine stations in Europe, in an expansion partly driven by the need to hedge against climate change.
Since Kirsten Lynch took the helm almost three years ago, Vail Resorts Inc. has acquired two Swiss resorts — Andermatt Sedrun and Crans-Montana. Now the chief executive officer wants to replicate the company’s strategy in North America, where it has more than 30 resorts stretching from Canada’s Whistler Blackcomb to Stowe in Vermont, in western Europe’s highest mountains.
Its current portfolio includes feted peaks and back bowls in the Rockies, along with less storied Midwest slopes, such as Wilmot Mountain, the Wisconsin resort where Lynch first skied as a six-year old. For the CEO, that geographic spread provides balance in the face of global warming, which is shutting down low-altitude resorts and forcing others to rely on artificial snow.
“When one geography is really having a tough season, inevitably we have other geographies that are having a big season and so we can balance it out,” Lynch said in a recent Zoom interview from the company’s Bloomfield, Colorado headquarters. “Geographic diversity helps with stability in the face of climate change.”
Big dumps of snow in Vail and Breckenridge in Colorado can help compensate for a lack of powder in the Lake Tahoe resorts of Heavenly and Northstar, while Whistler in British Columbia contrasts with Wildcat Mountain in New England. The company’s Epic pass offers access to all those resorts, plus three in Australia from 2025, and the two in Switzerland.
So far, Vail’s Alpine portfolio is focused on Andermatt Sedrun — a former Swiss army winter training base developed by Egyptian billionaire Samih Sawiris — and Crans-Montana, acquired from Czech billionaire Radovan Vitek. Lynch, who previously held senior marketing roles at Kraft Foods Group Inc. and Pepsico Inc., is clear that this is just the start.
“We absolutely want to consider more in the future,” the CEO said, while declining to comment on Swiss media reports that Vail is targeting resorts such as Verbier or Laax. “We’ve been very public about seeing an opportunity for expansion.”
The push into Europe was almost inevitable for both Vail and its US rival Alterra Mountain Co., said Paul Golding, an analyst at Macquarie Capital in Dallas. The pipeline of available mountains for acquisition in North America “has run its course,” he said.
Vail, which has a market value of almost $7 billion, has a track record of doing big deals, according to Chris Woronka, an analyst at Deutsche Bank AG in New York.
“Vail is no stranger to transformational acquisitions, they’ve done Whistler, they’ve done Park City,” said Woronka. “It’s all about what’s available, what’s for sale and then does it make strategic and financial sense.”
For now, Lynch and her team are focused on integrating Andermatt and Crans-Montana. Vail has committed 110 million francs ($130 million) to upgrades to snowmaking, lifts and restaurants and a further 39 million francs for real estate development in Andermatt. At Crans-Montana, the company is adding about 40 snow cannons to shore up the lower slopes, as part of a 30 million-franc upgrade.
“We’re not really collecting assets,” said Lynch, underlining that Vail is focused on a business model that counters the uncertainty created by climate change. “We can’t completely mitigate it necessarily, but there are things that we can do to offset that.”
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