From the Adriatic to the Maldives and Jakarta, environmental change is forcing destinations to reconsider assumptions about investment, insurance and competitiveness. For tourism professionals, climate risk is becoming less about predicting a distant future and more about understanding the value of an asset today.
Tourism has always invested in geography.
We build hotels beside beaches because the beach is there. Ski resorts because there is snow. Restaurants around local products because those products belong to the territory. Entire destinations exist because of a particular relationship between land, water, climate and people.
Behind those investments sits an assumption rarely written into the business plan: the fundamental characteristics of the destination will remain sufficiently stable for the investment to make sense.
What happens when that assumption becomes less reliable?
This is where climate becomes a tourism economics question, involving asset values, insurance, financing, infrastructure, operating costs and destination competitiveness.
And in Europe, that conversation has already started.
Venice is not only about Venice
Venice gives us the spectacular images: water in Piazza San Marco, raised walkways, MOSE barriers emerging from the lagoon.
But look beyond Venice and consider the Adriatic itself.
Its northern waters receive freshwater from the Po and other rivers crossing agricultural and industrial territories. Fisheries depend on the resulting ecosystem, coastal communities on fisheries and tourism, restaurants on products intimately connected with the territory.
Now change some of the variables.
Drought reduces river flows. Water temperatures rise. Salinity and nutrient conditions change. Agricultural pollution entering a reduced volume of water becomes more concentrated. Species respond, while others arrive.
The Atlantic blue crab is one visible example. It may eventually become something interesting on a restaurant menu, but its arrival has also disrupted established fisheries and ecosystems.
Nothing here requires a destination to disappear. Hotels remain open, beaches crowded, restaurants busy.
And yet something underneath the tourism product has moved.
A destination can change economically before it changes physically.
For tourism professionals, the question is therefore broader than whether Venice will flood. What happens when the ecosystem supporting a destination’s identity and economic value begins to change?
Imagine you are the investor
Consider a substantial investment in a coastal hotel.
The building might operate for fifty years. Financing may extend for decades. Municipal infrastructure is planned over similarly long periods.
Your insurer, however, may reconsider the risk every year.
Naturally, your feasibility study considers occupancy, room rates, labour costs, connectivity and competitors. But should it also consider recurrent drought, cooling costs, beach erosion, flood exposure, insurance availability or the ability of public infrastructure to withstand extreme events?
For destinations strongly identified with their gastronomy and environment, changes in agriculture and fisheries may matter too.
Suddenly, subjects routinely placed under headings such as climate, sustainability or ESG look remarkably familiar.
They look like due diligence.
The Maldives: when geography is the product
The Maldives has created one of the world’s most recognisable tourism products around an extraordinary relationship between land and ocean.
The beach is not an amenity attached to the product.
The reef, lagoon, beach, island and ocean are the product.
Tourism and fisheries together account for roughly half of GDP and employment, according to the World Bank, while around 80% of the islands sit less than one metre above sea level. Current World Bank projections indicate sea-level rise of approximately 0.5 to 0.9 metres by 2100.
This does not mean declaring that the Maldives will disappear on a particular date. Reality is more complicated.
It means adaptation becomes fundamental.
Infrastructure can be redesigned, land raised and coastlines defended. But reefs themselves are infrastructure of a kind: they help create beaches, protect islands from waves and sustain the marine ecosystems on which tourism and fisheries depend.
That creates an uncomfortable question:
How much can we change a destination to preserve it before we begin changing the very thing visitors travelled there to experience?
Someone investing today in a resort expected to operate for decades cannot reasonably avoid asking it.
Jakarta: when defending yesterday becomes a choice
Jakarta tells a different story.
Rising seas interact there with land subsidence, groundwater extraction, urban development, flooding and an enormous concentration of people and infrastructure.
Indonesia’s development of a new capital at Nusantara has many political, economic and demographic causes, and describing it merely as an escape from climate change would be simplistic.
But Jakarta introduces a difficult idea.
Adaptation usually means defending what we already built: stronger infrastructure, better drainage, barriers, redesigned buildings.
At some point another question becomes legitimate:
Should the geography of yesterday automatically determine the investment geography of tomorrow?
A hotel built today may still operate in 2070. Resorts, airports, marinas and cruise terminals are expected to survive multiple investment cycles.
Adaptation does not necessarily mean abandoning places. It may simply mean questioning whether the next major investment belongs exactly where the previous one did.
That is not environmental philosophy.
It is capital allocation.
When risk acquires a price
Insurance brings this discussion firmly back to economics.
The European Insurance and Occupational Pensions Authority estimates that only around one quarter of losses from extreme natural events in Europe between 1980 and 2024 were insured.
As physical risks increase, EIOPA warns of higher premiums and, in particularly exposed areas, exclusions or withdrawal of coverage, potentially affecting financing and mortgage availability as well.
So perhaps we do not need to begin a climate discussion with a tourism investor by asking:
What do you believe about climate change?
There is a more immediate question:
What does your insurance premium know that your business plan doesn’t?
An insurer eventually has to translate uncertainty into probability, exposure, expected loss, premium and sometimes a decision not to accept the risk.
That makes insurance one of the places where environmental change becomes economically visible long before a destination becomes physically unviable.
European regulators are consequently considering adaptation part of the equation. Measures reducing physical exposure can reduce losses and help preserve the availability and affordability of insurance.
Resilience can acquire a financial value.
A destination doesn’t need to disappear to lose
This may be the most important point for tourism.
The dramatic question is whether a destination will physically exist fifty years from now.
The business question is simpler:
Will it still be competitive?
Imagine two destinations offering broadly comparable experiences. One faces progressively more expensive insurance, greater resilience requirements, difficult water management, higher cooling costs and recurring adaptation investments. The other faces fewer of those pressures.
Nothing has to disappear beneath the sea.
Capital can begin preferring the alternative. Residents, retirees and businesses can do the same. Eventually, visitors may follow.
Climate change does not have to destroy a destination to change its competitive position.
Venice, the Maldives and Jakarta are radically different places. That is precisely why comparing them is useful.
Venice asks how much society will invest to protect something effectively irreplaceable. The Adriatic asks what happens when environmental change alters fisheries, gastronomy and coastal ecosystems. The Maldives asks what happens when the geography creating the tourism product is itself vulnerable. Jakarta asks whether adaptation can eventually change where future investment goes.
Behind them sits the same investment question:
Which assumptions about the next thirty or fifty years are embedded in the price we are willing to pay for a tourism asset today?
Tourism professionals elsewhere in the world may recognise elements of this conversation from their own experience.
We do not need to tell them what that experience means.
It may be more interesting simply to compare notes.
When sustainability changes direction
For years, much of the sustainability conversation has asked:
What does tourism do to the environment?
Energy, water, waste, emissions, biodiversity and communities all belong to that question.
Adaptation reverses the direction:
What happens when the changing environment begins acting on tourism?
Can the hotel recover? Can infrastructure cope? Can the asset remain insurable? Does the traditional season remain attractive? Can the community continue living there? Does the investment still make sense?
Sustainability tries to reduce our impact.
Resilience asks whether we can absorb change.
Regenerative tourism pushes the question further: what does the destination itself need in order to remain viable?
Once we ask that, familiar environmental assets look different.
A wetland may also be flood infrastructure. A dune may protect everything behind it. A coral reef is simultaneously biodiversity, tourism attraction and coastal defence. A healthy river hundreds of kilometres upstream can influence a coastal destination downstream.
Nature is no longer simply something tourism should protect.
It becomes part of the infrastructure on which tourism depends.
Regenerative tourism, at its most useful, is therefore not a fashionable replacement for sustainability. It asks us to examine the systems that make a destination viable and consider how tourism can strengthen rather than progressively consume them.
Nobody has the whole picture
The hotelier understands the asset and the guest. The insurer understands risk. The banker understands finance. The fisherman sees changes in the sea. Scientists understand ecosystems, engineers physical adaptation, destination managers infrastructure and visitor flows, local authorities what can realistically be built and protected.
Each sees part of the same reality.
That is where a professional network can become valuable.
Not because everyone needs to agree about every aspect of climate policy. And not because tourism needs another forum where people tell one another that sustainability is important.
The opportunity is more practical:
Can we connect enough fragmented knowledge to make better professional decisions?
This is one of the ideas behind the developing Skål Europe Sustainability Champions Network.
Across Skål, tourism professionals already possess enormous practical knowledge about destinations, hospitality, transport, food, finance, nature, communities, infrastructure and investment.
Much of it remains local.
The challenge is to make that knowledge travel.
Because somewhere, a tourism professional is already dealing with a problem another destination has not encountered yet.
What the first learns today may become extremely valuable to the second tomorrow.
