Climate change is currently making snow scarcer in regions where snow sports have traditionally thrived. While snowfall is increasing on a few of the highest mountain peaks in the world and over Antarctica, it is vastly declining in regions with winter sports tourism.¹

What could that mean for the resorts, local economies and real estate in these regions? That will depend, in part, on how resorts respond to the resulting challenges and opportunities.

Snow insurance

The history of the Olympics highlights this climate concern. Snow-making machines were first developed in the 1930s but weren’t used in the Olympics until 1980 in Lake Placid. Recent Olympics, however, have increasingly depended on snow-making machines as insurance when holding events in previously snowy regions that no longer have reliable snowfall due to warming (Sochi) or in cold regions that support snow-making but do not typically have snowfall (Beijing).

Snow on the ground requires two conditions: below-freezing temperatures and water in the atmosphere to form snowstorms. As global warming continues, the total number of snowy days around the world can be expected to decrease. For example, in the U.S. the snow sports season could be one week to several months shorter by 2050, depending on the location and emissions scenario.²

Warming and changes in storminess have also increased variability in snowy days and snowy years, with higher likelihoods for “snow droughts,” months to years in which snow does not fall. In the western U.S. broadly, every year there is a 7% chance of a two-year snow drought and a 0.25% chance of a four-year drought. Around 2060, however, assuming a higher emissions scenario, the risks go up to 42% and 25%, respectively.³

Lost revenues from a “shortfall” in snow

Snow sports enthusiasts may be forced to chase snowfall around the globe (Exhibit 1). They may only visit favorite but susceptible locations when snowfall has been confirmed, or prioritize visiting locations with the most snow in the world, like Japan. An extreme response may see them forgo snow sports altogether.

Changing snow conditions could shift regional popularity 

Exhibit 1: Pre-COVID-19 skier visits by country (2018–19) and projected climate suitability ratings for 2050 Winter Olympic Games, for prior Winter Olympics locations* 

*Average ratings (colors) applied to countries with multiple prior locations.

Declining lift ticket sales and equipment rentals would not be the only potential sources of lost revenues. Transportation, hotels, shopping and entertainment would also likely suffer losses. This would affect resort profitability, the local economies and real estate prices unless tourism from snow sports was replaced. The snow resort industry is forming partnerships or consolidating into entities large enough to diversify snow risk by offering all-access passes to far-flung properties in numerous countries and continents.

Resort towns have developed facilities for warm-weather outdoor sports like mountain biking and hiking, and are hosting art festivals to make use of their room and board capacity. With COVID-19 and the rise in remote work, people moving from urban areas to the mountains have also recently lifted these locations’ year-round populations; this will support ski towns’ economies if the trend continues.  

The impact of climate change on winter sports—disappearing snow and its follow-on effects—has mobilized several groups to work on solutions, research and communications to raise awareness. Please visit the websites for Climate Central, Snowriders International and Protect Our Winters for more information.

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Climate change may present a wide spectrum of potential opportunities for investment portfolios. Contact your J.P. Morgan representative to learn more.

¹Sarah B. Kapnick and Thomas L. Delworth, “Controls of Global Snow under a Changed Climate,” Journal of Climate 26, no. 15 (August 2013): 5537–5562.

²Cameron Wobus et al., “Projected climate change impacts on skiing and snowmobiling: A case study of the United States,” Global Environmental Change 45 (July 2017): 1–14.

³ Adrienne Marshall, John T. Abatzoglou, Timothy E. Link and Christopher J. Tennant, “Projected Changes in Interannual Variability of Peak Snowpack Amount and Timing in the Western United States,” Geophysical Research Letters 46, no. 15 (August 2019): 8882–8892.

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