Half of Australia's tourism assets are in an elevated risk category, facing considerable climate and natural peril risk, according to the "Climate Risk Index - The impact of climate change on the Australian tourism industry", the first comprehensive, quantitative climate assessment of its kind for Australian tourism.
The proportion is set to rise to 55% by 2050 under the intermediate SSP2-4.5 scenario, assuming 2 degrees Celsius of warming by 2041-2060. Under a more extreme (3 degrees) scenario, 80% of tourism sites will experience an increase in risk between 2025 and 2050.
The Zurich-Mandala Climate Risk Index has been used to analyse the risk of climate change to 178 tourism assets, including major airports. The index uses IPCC climate modelling along with proprietary climate impact assessments to understand the unique risks faced by individual sites. The assets include major airports, national parks, beaches and museums.
Australia’s tourism industry plays an important role in the nation’s economy, contributing more than A$170bn ($113bn) in annual expenditure and over 620,000 jobs, noted the analysis by Zurich Financial Services Australia (Zurich) and Mandala Partners (Mandala).
In terms of economic impact, around 30% (up to 176,000) of these jobs nationally could be jeopardised – 65% of which are outside Australia’s capital cities – in the event of a disaster scenario similar to that experienced following the bushfires of 2019-20.
The report serves to highlight the critical importance of improving resilience across our tourism assets, both to ensure the sustainability and longevity of these sites and to minimise downstream economic impacts– particularly in regional areas– on employment, business formation, consumption, and investment. More broadly, it also serves to highlight the quantum of data and insights that are available to understand the prevailing risk environment to shape and prepare our collective response.
Regional risk
The analysis also reveals that climate risk varies significantly by geography and site type (natural or man-made).
Queensland has both the highest number of sites facing elevated risks (79%) and the most sites in the highest risk category (52%) compared to any other jurisdiction. After Queensland, Western Australia and the Northern Territory have 69% and 63% of sites in the highest risk categories, respectively. Across the southern states, the risks were relatively lower.
By site category, the Index finds that all 31 of the busiest airports in Australia fall into the highest climate risk categories, including 94% in the most extreme category, due to their geographic location and susceptibility to perils such as wind and storms.
Similarly, all of the analysed wine-growing regions, botanic gardens, scenic roads and rail and rainforests and national parks were found to be in the highest climate risk categories. Natural geological formations, museums, galleries and stadia face relatively lower risk.
Zurich Australia and New Zealand CEO Justin Delaney said that the analysis served to highlight the critical importance of improving resilience across tourism assets, both to ensure the sustainability and longevity of these sites and to minimise downstream economic impacts – particularly in regional areas – on employment, business formation, consumption, and investment.”
Mandala Partners partner Adam Triggs said, “A key reason for Australia’s more limited focus on the physical impacts of climate change is a lack of data, and this is exactly the gap that our partnership with Zurich seeks to fill.”
Mandala is a research firm, combining data and analytical techniques to generate insights and perspectives on the challenges facing businesses and government.
A full version of the report is available here.