Hotels face growing climate risk beyond seasonal demand shifts

Why climate change is becoming a core operational and commercial issue for accommodation providers

Climate change is increasingly a structural business risk for hotels, not just a sustainability or marketing concern, according to insights shared at Travel Weekly’s Sustainability Summit. Industry experts warned that focusing on marginal adaptations, such as adjusting seasons or activities, overlooks deeper impacts on hotel assets, operating costs, and long-term demand. Rising temperatures, water scarcity, insurance availability, and workforce pressures are expected to reshape where tourism flows and which properties remain commercially viable. Hotels that delay a strategic response may face higher costs, reduced competitiveness, or exclusion from key distribution channels.

Key takeaways

• Climate change as an operational risk: For hotels, the primary business case for sustainability comes from managing operational risk, not guest demand or branding.
• Shifting demand will affect location value: As temperatures rise, demand is likely to move toward cooler regions, altering the long-term attractiveness of certain hotel markets.
• Insurance and asset viability under pressure: Higher premiums or lack of insurance coverage could make some hotel assets too expensive to operate or invest in.
• Costs will outweigh comfort concerns: Factors such as water supply, energy use, and maintenance costs may matter more than whether destinations become uncomfortably hot for guests.
• Distribution access may be at risk: Destinations facing severe climate risk could be deprioritized or delisted by tour operators, OTAs, airlines, or other distribution partners.
• Workforce and supply chain impacts: Climate stress may affect staff availability and supply chains, adding further operational complexity for hotels.
• Early action improves resilience: Hotels that invest early in climate resilience and long-term adaptation strategies are more likely to remain competitive, regardless of location.

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