Is Snowmaking Growth (F)Utile? A Dynamic Panel Data Analysis of Ski Resorts’ Profitability Under Climate Change

Climate change is threatening the future of ski resorts, as the increasing frequency of low snow seasons is expected to reduce the profitability of ski resorts. The growth of snowmaking is often seen as a way to adapt to this threat. While the literature highlights its environmental impacts, its economic benefits remain unclear. We seek to fill this gap by analysing the profitability of 56 ski lift operators over a 15-year period, from the 2004/05 season to 2018/19, using a dynamic panel data modelling approach. We find no evidence that increased investment in snowmaking improves the profitability of ski lift operators, even in the worst snow seasons. In the latter, profitability is supported by the size and altitude of the resort. These results strongly question the role of snowmaking growth as an adaptation to climate change