July 20, 2016

Skiing will continue despite the speculated weather volatility

Andy Wirth has been working in the mountain resort and hotel industry for long. Currently, he is operating as the President and Chief Executive Officer of Squaw Valley Ski Holdings, which emerged from the combination of Alpine Meadows and Squaw Valley Ski Resort in Olympic Valley, California.

I was listening to a popular program, Press Play with Madeleine Brand, hosted on California radio station KCRW. Madeleine Brand wanted to know the effects of the drought on the California ski resort. According to Madeleine, people in California had reduced their water consumption by 27% compared to two years ago.

The new poll found out that people were more concerned about the drought than any other issue. In 2015, ski resorts in California suffered the driest winter in recorded history. Most of them were forced to end the ski season early since there was less snow in February. Learn more about Andy Wirth: https://about.me/andywirth and www.kcrw.com/people/andy-wirth

Andy confessed that the previous winter was tough for everybody in the Western United States, particularly in California. The ridiculously resilient winter made the winter tough since it prevented Squaw Valley’s pressure systems from getting into the mountain. Despite the toughness of the winter, Squaw Valley survived.

The ski was not as profitable as it was several years ago. There was a 20% drop in profits as compared to the previous year. Andy Wirth said that with a solid capital structure the firm could survive an infinite number of similar winters. The firm was able to make profits since it positioned itself and took advantage of the available opportunities such as increased snow and cold.

As stated by Andy Wirth, Squaw Valley has 6000 acres. The firm can survive with 4000 acres of skiing when there is less snow. The resort uses science to make snow and manages the snow to ensure that skiing is taking place even when snow levels are below average. With the speculated El Nino winter, Andy was quite prepared. He engaged with professionals from Colorado State University, and together they looked at the positive side of the El Nino. The El Nino would mean an absence of the ridiculously resilient weather. In  addition, there would be ambient temperatures, which would be a favorable condition.

Most people speculated an increased volatility of weather, with warmer winters. Unlike other ski businesses in Colorado who thought that there would be no skiing in the next 20 years, Andy is positive and believes that he can survive the volatile weather. In the interview, Andy said that he was more focused on making adjustments in the business to ensure that skiing continues. Should the condition prevail in the subsequent years, he would invest more in the snowmaking technology and make other major modifications in the business model to ensure it survives the weather volatility.

By running Squaw Valley, Andy sees himself as a resource manager and takes his job very seriously since the results would be part of his legacy. Andrew went to Colorado State University and University of Edinburgh, Scotland.