Mountain Resort Vail Is Taking Its Sustainability Efforts to New Heights

One of the largest names in the ski world is taking steps to make the industry more sustainable.

“The outdoors is our business,” says Kate Wilson, vice president of environmental and social responsibility at Vail Resorts.

Vail Resorts, a mountain resort company with a network of 41 ski resorts across four countries, set out to make a major commitment to their sustainability efforts in 2017. The intent was to achieve a net-zero operating footprint by 2030. This “Commitment to Zero” includes the ambitious goal of zero net emissions, zero waste to landfill, and zero net operating impact on forests and habitat.

“On day one, we didn’t have the road maps and plans on how we were going to get there, but we’ve since built those,” Wilson says. “And we’ve brought others in the industry with us.”

Just six years later, Vail Resorts is ahead of schedule to reach its emissions goals and on track to achieve the zero net operating footprint by 2030. The company reached 100% renewable electricity for the second year and hit its 2030 energy-efficiency target early.

Offsets are another way Vail Resorts is supporting sustainability. They have reforested over 200 acres of land since 2017 and support wind farms across the country. Plum Creek is a large-scale wind farm enabled by Vail Resorts. In its 2023 fiscal year, it produced 350,177 megawatt hours of renewable electricity, equivalent to the electricity needed to power 48,286 homes for one year.

“Sustainability and the way it is integrated into our business and operationalised with every decision that we make is something I’m really proud of,” Wilson says. “We’re not just thinking about how we, as a resort, can make an impact on climate change but how we can use our voice across our resorts, our industry, and beyond.”

Commitment to Zero gives the Vail Resorts properties one central sustainability focus. With one common goal, the company can lean into and take advantage of their enterprise network.

“At every resort we’re sharing lessons learned: ‘We did this thing in Whistler, we should do it in Park City,’” Wilson says. “That’s the power of the network and coming together to say, ‘what can we do that’s bigger than each of our resorts?’”

To further that goal of sharing lessons and ideas, Vail Resorts spearheaded The Mountain Collaborative for Climate Action in 2019. Now with over 76 resorts in the collaborative, the group works together on innovative solutions to help spread sustainability across the ski industry. Vail Resorts also partners with the National Ski Areas Association on quarterly meetings to discuss items related to green initiatives and share its experiences with an even larger group.

“There are smaller resorts that don’t have sustainability resources. We can share lessons learned, come up with solutions where we tell them, for example, how we recycle our nitrile gloves and turn them into pellets that become playgrounds,” explains Wilson. “We don’t need to own these things we want to share with others so they can take action, too.”

Developing innovative solutions for recycling and reducing landfill waste is a key part of this sustainability strategy. Initiatives to collect and upcycle waste can be easily replicated at multiple resorts. A project to collect and recycle soft plastics into decking is being piloted at various properties across the Vail Resorts mountains.

Other innovative solutions Vail Resorts has implemented include the ski industry’s only gondola-based waste removal system, a custom-designed recycling center at Vail Mountain, and a resource-efficient snowmaking system.

Vail Resorts also leans on strategic partners to assist with their green efforts. The company worked with PepsiCo, their on-mountain beverage partner, to develop a program to upcycle candy and snack wrappers into furniture and terrain park features. There’s now a Mountain Dew wallride in the terrain park at Breckenridge crafted from recycled bottles and snack packaging materials.

The company also joined together with Helly Hansen to turn old ski resort work uniforms into tote bags and ski patrol backpacks. The products were sold on behalf of their EpicPromise Employee Foundation, which provides hardship and education grants to teammates.

The employee foundation is one way Vail Resorts is expanding its efforts beyond environmental initiatives. The company has a large youth access program and hosted more than 11,000 youths across 32 properties in the 2022-23 season, according to the resort.

“We really believe the future of the sport is inclusion. We care deeply about removing some of those barriers to have people try the sport for the first time,” Wilson says.

AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.

Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

Mountain Resort Vail Is Taking Its Sustainability Efforts to New Heights

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.