Investing.com – Climate change is expected to significantly reshape the travel industry, impacting destinations, costs and demand patterns, UBS said.
UBS highlighted the growing challenges facing suppliers, such as airlines and hotels, and consumers, as rising temperatures and efforts to combat emissions reshape global tourism.
Key impacts include rising travel costs as companies strive to achieve net-zero emissions amid increasing regulatory pressure. UBS estimates that Ryanair may need to raise ticket prices by more than 10% by 2030 to offset environmental costs. Capital expenditures, such as investments in sustainable aviation fuel facilities, could exceed $8 trillion globally by 2050, UBS said.
Rising temperatures are also changing travel preferences. In Europe, warmer summers could reduce tourism in southern countries such as Spain, where a 1% rise in temperature is already affecting visitor numbers. UBS has warned that Spanish tourism could shrink by 11% a year by the end of the century. Conversely, cooler regions, such as the United Kingdom, may see a modest increase in tourism revenues.
While opportunities exist for larger players and less affected regions, climate change represents a net negative impact on the travel industry, UBS said. The report emphasized the risks of industry consolidation, higher risk premiums, and increased operating costs for companies in climate-vulnerable regions.
UBS suggested focusing on companies with strong balance sheets and the ability to adapt to climate impacts, while cautioning companies in regions that rely heavily on weather-sensitive tourism.
