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UNWTO, 9 July 2008 Impacts and Adaptation at Tourism Destinations As an adaptive strategy, insurance against extreme weather events is critical for tourism, just as “[…] weather and climate are ‘core businesses’ for the insurance industry”. 426, 427 From the perspective of tourist destinations, insurance enables the industry to spread the burdens of those climate-related risks which cannot be avoided by other adaptation measures. In turn, the insurance industry faces the prospect of a growth in the number and size of claims from the tourism industry and tourists, as a consequence of increases in extreme events and climate variability. 19 out of the 20 most costly natural disasters (in terms of property insurance losses) in Australia have been weather related. Hailstorms in Sydney in 1999 proved to be the most costly (AU$ 2.2 billion). Changes to the expected frequency of such weather events are of considerable importance to the insurance industry. 428 Insurance claims relating to climate and tourism, including mortality and sickness while travelling, increased accidents between home and destination or at the tourist destination, structural damage to tourist facilities and hotels, service interruptions, and large-scale bush or forest fires. Events like these drive up insurance premiums potentially making them unaffordable for many (especially smaller) tourism operators. However, it is possible to reduce premiums by proactive adaptation. Premiums for cyclone insurance in Fiji, for example, can be reduced substantially if the insured party introduces measures such as improving building structures, having emergency plans in place, conducting staff training (e.g., for evacuation procedures), and making sufficient provisions for water, food and fuel storage. 429 Information exchange between insurance companies, the tourism sector and those at risk from climate change is essential in order to shape adaptation measures and premiums, and also to reduce uncertainty associated with future risks. The Association of British Insurers 430 estimates that even small increases in the intensity of hurricanes in the Gulf of Mexico-Caribbean, typhoons in Japan, and windstorms in Europe could increase annual damage costs in these major insurance markets by two-thirds by the end of the 21st century. To reflect the changed risk, regional insurance premiums would need to increase an estimated 20 to 80% in the Gulf of Mexico-Caribbean, 20 to 80% in Japan, and 0 to 15% in Western Europe. Adaptation by the insurance sector is already occurring in the Caribbean and Gulf of Mexico. The move of some insurers in the USA to reduce coverage in Florida and the Gulf of Mexico is an example of a risk reduction strategy by the insurance industry. 431 One regional insurer in the Caribbean recently dropped coverage of 48 beach front properties across the region and increased premiums an average of 16%. 432 Such changes in insurability will have major implications for future tourism reinvestment and development in high hurricane risk regions like the Caribbean. The extension of the regions with major tourism destinations that will be primary affected by extreme climatic events highlights the need for awareness and preparedness for natural hazards at the local level through systematic capacity building and strategies for disaster risk management. Box 9 Adaptation to extreme events in Fiji 433, 434 Tourism destination and situation: Coastal tourist resorts, Fiji. Climate change impact: Extreme wind events (cyclones) and storm surges leading to structural damage and shoreline erosion. Adaptation strategies: To prevent damage from storm surges and sea level rise, resorts are now built at least 2.6 m above mean sea level and 30 m off the high tide mark (these standards might be reviewed in the future). The building code prescribes that structures need to withstand wind speeds of 60 km per hour. Again, the building code is under review. Individual businesses (at least the larger resorts) have evacuation plans, insurance cover and procedures before the start of the cyclone season, such as staff training, water and food storage, first aid kits, trimming of trees and a direct line to the Meteorological Service for early warnings. Organization implementing the adaptation strategy: A range of Government Departments (e.g., Town and Country Planning, Ministry of Health, Fiji Meteorological Service) and tourism businesses themselves. 85
86 Climate Change and Tourism – Responding to Global Challenges Figure 9.11 Small island chains of Yasawa and Mamanuca with small-scale tourism facilities are particularly vulnerable to climate change impacts and extreme events UNWTO, 9 July 2008 Photo credit: Vereczi, G. 9.2.3 Adaptation to Changes in Environmental Resources: Conservation of Natural Ecosystems to Enhance their Resilience and the Rational and Efficient Use of Scarce Resources Conservation of biodiversity and maintenance of ecosystem structure and function are important climate change adaptation strategies in relation to tourism’s natural resource base. Establishing and enforcing protected areas is generally considered to be one of the most appropriate strategies for ensuring that terrestrial, freshwater and marine ecosystems are resilient to the additional pressures arising from climate change. The impact of climate change on protected areas is also an important issue, with changes influencing species drift and altering ecosystems. 435 The resilience of coral reefs is of particular concern, as most of the effects of climate change are stressful rather than beneficial. 436 Reef systems that are jointly affected by global climatic and local human stresses will be the most vulnerable. Coral reefs are a critical component of coastal protection in tropical areas, in addition to shaping wider ecosystems, harbouring high levels of biodiversity and providing significant fisheries and tourism income. 437, 438 Maintaining natural coastal defences provided by the coral reefs or mangroves offers protection for coasts and island from storm and wave damage. 439 In one study assessing the links between sea level rises, biodiversity and economic activity 440 it was demonstrated that approximately one third of the beaches on some Caribbean islands may be lost through coastal squeeze, hurricanes could reduce coral cover by 17%, and that this loss of beaches and coral cover could have a significant impact on tourism within the region. Local conservation measures include education and awareness programmes, tertiary treatment of sewage and disposal via a long offshore pipeline; monitoring systems that show the relative efficacy of adaptation measures; enforcement of fishing quotas and designation of exclusion zones and seasons. In addition, it is now common to ban destructive fishing practices as well as removal of reef resources for the aquarium trade, construction materials, navigation improvements, and medicinal and pharmaceutical applications. There has been also a range of reef rehabilitation and restoration techniques and projects developed, although the slow growth of corals makes the process lengthy and whether these strategies will be sufficient to secure the future of corals remains to be seen. Alleviating water shortages requires substantial investments in storage facilities or desalinisation plants. This will be especially the case for resorts some distance from plentiful sources of surface or ground
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