Investing.com -- Climate change is poised to significantly reshape the travel industry, affecting destinations, costs, and demand patterns, UBS said.
UBS highlighted the growing challenges for both suppliers, such as airlines and hotels, and consumers as rising temperatures and efforts to combat emissions reshape global tourism.
Key impacts include higher travel costs as companies strive for net-zero emissions amid increasing regulatory pressure. UBS estimates Ryanair may need to raise ticket prices by over 10% by 2030 to offset environmental costs. Capital expenditures, such as investments in sustainable aviation fuel (SAF) facilities, could exceed $8 trillion globally by 2050, UBS said.
Rising temperatures are also altering travel preferences. In Europe, warmer summers could reduce tourism in Southern countries like Spain, where a 1% temperature rise already impacts visitor volumes. UBS warned that Spanish tourism could shrink by 11% annually by century's end. Conversely, cooler regions, such as the UK, might see a modest boost in tourism revenues.
While opportunities exist for larger players and less-affected regions, climate change as a net negative for the travel industry, UBS said. The report underscored risks of industry consolidation, higher risk premiums, and increased operating costs for companies in climate-vulnerable areas.
UBS suggested focusing on firms with strong balance sheets and resilience to climate impacts, while cautioning on businesses in regions heavily reliant on weather-sensitive tourism.