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British tourists were among thousands evacuated from the Spanish island of La Palma this week as wildfires raged. Heatwaves triggered by climate change are making summer trips to the Mediterranean fraught for northern Europeans. The holiday industry shows few signs of adaptation. That will surely change.
Favourite Mediterranean tourist destinations are in the grip of scorching temperatures. When the thermometer hits the mid to high 40s centigrade, most of us experience discomfort and heat stroke becomes a danger.
The stocks of big tour operators remain buoyant. Shares in Jet2 have edged up in recent days. At its last update in May, Tui said Greece, Spain and Turkey remained popular destinations.
But extreme temperatures are starting to influence a minority of holidaymakers, according to the European Travel Commission, a trade body. Some higher-end travel agencies report booming interest in cooler destinations such as Iceland and Norway.
The problem for the tourism industry is that it has heavy fixed investments in places afflicted by heatwaves. These include hotels, which have 1.5mn beds in Spain against 10,700 rooms in Iceland. Owners may be local businesses or giants such as Tui which owns 38 per cent of its hotels directly.
The solution is to encourage more travel in what were previously “shoulder” months of the annual demand curve. The number of Europeans planning to travel in August-September this year decreased 3 per cent compared with 2022, according to an ETC survey. Those planning to get away in October or November rose 5 per cent.
The constraint is that most families can only get away during school summer holidays. If heatwaves keep recurring in the Mediterranean, travel businesses may take hefty writedowns on fixed assets there. They may need to expand cruise fleets, which have the virtue of mobility.
Travel industry stocks have rallied on the post-coronavirus bounce in demand. But with Europe warming at a faster rate than the global average, travel companies will not be able to shrug off future heatwaves so easily.
The Lex team is interested in hearing more from readers. Please tell us how you think climate change will affect the holiday industry in the comments section below.