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Humanity’s Faustian Climate Bargain Comes Due

Skift Take

Traditional travel seasons are changing faster than a melting snowcap, and tour operators are leading the way in adapting to extreme weather.

Extreme weather patterns – heat waves, wildfires, floods – are reshaping how people travel. This is clear from changing booking windows, evolving off-season travel itinerary choices, and how popular destinations adapt to the ongoing changes in the weather.

Change is already happening – albeit slowly. We think it’s going to accelerate.

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Travel businesses will have to further respond to vacationers’ decisions to tilt toward destinations that are less-impacted by wildfires or a frenzy of airline cancellations. Airlines will be forced to speed development of more sustainable fuels if passengers opt for trains or staycations in response to existential fears over global sizzling.

If there are still any climate change doubters in the executive ranks of travel firms, they will find religion as nature’s wrath impacts their bottom lines.

Tour Operators Are Already Seeing Change

In 2023, Europe became the extreme weather epicenter for multi-day tour companies like TUI, Intrepid Travel, and G Adventures.

Extended shoulder season travel, when holiday weather is warm but not unbearable, has seen these companies extend tour packages to accommodate later bookings beyond the traditional peak summer travel period.

All these companies have reported a demand for flexibility in tour packages and travel experiences in response to this changing seasonality trend.

Europe-based tour operator TUI extended its 2023 tourist season in Turkey and Greece. Wildfires in Rhodes forced it to cancel its tours to the Greek island, with emergency operations costing $27 million.

“With warmer shoulder and winter seasons caused by climate change and demand by guests, we might see more of these extensions in the future,” said TUI CEO Sebastian Ebel.

The company is also designing tours to new destinations with moderate climates, such as Cape Verde, the Canary Islands, Belgium, and cooler parts of Portugal.

All these will likely grow in popularity, according to Ebel.

The tour operator confirmed in its 2023 Annual Financial Report that it was seeing demand for holidays far beyond the traditional summer travel season. It increased capacity for its UK market to Antalya in Turkey, a traditional summer destination, for the current winter season.

“The destinations around the Mediterranean are very popular for holidaymakers in the main summer season as well as all year round and will remain so. However, in future, we may also see more and additional demand for holidays in spring and autumn,” the TUI report stated.

“This holds true for many destinations in the Western and Eastern Mediterranean and customers demanding more flexibility are also keen to take their holidays in spring, autumn or winter. With our integrated business model, our own aircraft and hotels, we as TUI can react swiftly to such changes in demand and offer holidays all year round.”

Intrepid Travel also increased its shoulder season in Greece, Italy, and Spain. The Australia-headquartered company saw 76 tours disrupted due to extreme weather between January 2022 and April 2023.

These climate patterns now shape its seasonal planning with a more extended off-peak season.

G Adventures said extreme weather was consistent in 2023 compared to previous years. However, the small group adventure tour operator is considering itinerary changes in Europe, as the “weather gets too hot to operate in mid-July in southern Spain,” said founder Bruce Poon Tip.

“We will look to expand our season in southern Europe to take advantage of the better off-season weather,” said Poon Tip. “We’ve [already] moved active outdoor activities to early morning and have free time during the day’s heat. We’re paying attention to these patterns.”

Marriott, the world’s largest hotel group, has also noted an impact. Marriott said in it CDP (Carbon Disclosure Project) 2022/23 Climate Impact report that it had seen a decline in travel and reduced demand for lodging in certain locations due to severe storms, hurricanes, earthquakes, tsunamis, floods, wildfires, and other natural disasters. 

“If guests are unable to travel, our business can be adversely impacted,” Marriott said.

Change Won’t Happen Overnight

Admittedly, change could come slowly. Expedia Group CEO Peter Kern, appearing at the Skift Global Forum in New York City in September, has yet to see travelers changing their trip patterns for the most part despite their stated interest in sustainable choices.

Kern said the summer of 2023 had particularly hot temperatures in Europe, and many American travelers there complained about a lack of air-conditioning. “Are they going to go north?” he asked. “I think it’s not obvious yet. It’s a reasonable conclusion, but mostly, behavior hasn’t changed too much.”

Henrik Kjellberg, Group CEO of vacation-rental property manager Awaze, sees minor changes in how people travel. However, it was hard to gauge in 2023, he said, because the post-pandemic “revenge travel” impulse, replete with longer trips, was still an impactful trend.

But Kjellberg believes that staycations closer to home will be a significant 2024 phenomenon.

Awaze is seeing “marginal increases” in people booking trips closer to home (3%) and taking domestic trips (81% in 2023 versus 79% in 2022).

“Now, whether this is due to cost or people being more eco-friendly is hard to pick,” Kjellberg said.

One more change he’s seeing is a 30% increase in guests selecting eco-homes, one of the property manager’s search categories.

Aviation Industry Will Keep Pushing for Fuel-Efficiency

Regarding airlines, many are pursuing carbon mitigation strategies and are “seeking SAF (Sustainable Aviation Fuel) as a major solution,” said Jay Sorensen, who publishes reports on airline ancillary revenue.

But many of the things they are doing to reduce their carbon footprints they would be doing anyway for cost reasons, he said.

“As a matter of business, airlines continue to replace their fleet. And when they do that, they’re going after newer aircraft. And that’s creating more efficiencies,” said Sorensen.

“There are also operational things that they are doing, such as trying to decrease taxi times. They are trying to reduce the weight of components and the takeoff weight of aircraft. But in terms of airlines operationally changing their business beyond SAF specifically to address carbon mitigation, no, I don’t see anything. I mean, they’re making changes to become more efficient. But these would happen anyway because efficiency lowers their expenses,” said Sorensen.

Moody’s Climate Risk Framework

Moody’s Environmental Social and Governance (MESG) analysis states that climate change could alter tourism patterns, affect agricultural output, and decrease workforce productivity – affecting the socio-economic stability and infrastructure of countries worldwide. There are implications for destinations heavily reliant on tourism’s contribution to its GDP.

The impact on tourism would vary, according to Moody’s climate scoring; some destinations might become more attractive, while others could lose appeal due to adverse climate conditions like extreme heat or increased natural disasters.

Moody’s considered six critical climate hazards in its white paper released in April 2022 to define its MESG framework: floods, heat stress, hurricanes/typhoons, sea-level rise, water stress, and wildfires in its Climate Change Scenarios and Scores.

The financial services and ratings agency further defined its ESG with three scores: a percent score, an absolute score, and a final score.

Moody’s percent and absolute scores looked at how much of a country’s population, economic output, and agricultural areas, for example, are exposed to its six identified climate hazards – as detailed in Chart 1.

Combining a country’s percent and absolute scores determines Moody’s final MESG Sovereign Climate Risk score, as detailed in Chart 2.

The U.S., for example, has a lower risk score when looking at its economy size (49.2 – chart 1) but a much higher final score (98.4 – chart 2) because of its large population and economic activities affected by climate risks.

Belize has a high-risk score (94.7 – chart 1) due to many climate hazards, but its final score is lower (46.5- chart 2) because it has a small population and economy.

Discover all of the Skift Megatrends 2024, as well as listen to related podcasts and view sessions from our New York City event.

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