News & Insights

5 climate change challenges to tourism and hospitality

Published 17 July 2018

Tourism, including hospitality and food service, plays a vital role in the Australian economy, but rising temperatures and unpredictable weather threaten the future of the industry. The United Nations has identified Australia and New Zealand as one of five global tourism regions vulnerable to climate change.

Australia’s top five attractions for international visitors are already being affected:

  • beaches
  • wildlife
  • the Great Barrier Reef
  • wilderness areas
  • national parks.

Source: Climate Council

Here at Gallagher, we are alert to the escalating risk climate change presents to our clients and the future of their businesses, as Taylor King explains.

 

The impacts of climate change for the future of the industry cover 5 key areas:

1. Economic effects

  • In 2015‒16 Great Barrier Reef Tourism was valued at $5.7 billion. A survey conducted by The Australia Institute after the 2016 bleaching found that if coral depredation continues, the reduction in visitor numbers to tourism areas adjacent to the Great Barrier Reef could result in a loss of more than $1 billion.

2. Weather events

  • Cyclone Yasi (2011) is estimated to have cost the tourism industry $600 million.
  • Flooding in the New South Wales Hunter Valley region in 2015 resulted in local tourism industry losses of $110 million.

Source: Icons at Risk: Climate Change Threatening Australian Tourism, Climate Council of Australia

3. Food chain impacts

Findings by the University of Melbourne for Earth Hour 2015 show that:

  • January‒April temperatures of 35⁰C = detrimental effect on produce quality
  • By 2050 70% of wine growing regions <suitable for grapes
  • 20% reduction in rainfall = livestock weight gain reduced by 12%
  • Rising sea levels and salt tables threaten sugar cane crops

4. Carbon emissions

5. Cost of insurance

Want to know more about how climate change is affecting the tourism and hospitality in Australia, and some suggested strategies for managing these impacts? Download Gallagher’s report in detail to access the latest insights.


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