The rising cost of climate change for tourism: a risk assessment

Tourism faces rising costs from climate change, yet a comprehensive understanding of current and emerging economic risks remains limited. This paper conducts a scoping review of how climate change imposes economic burdens on global tourism. Drawing on n = 41 academic studies and n = 25 industry and media reports (2018–2026), it finds that costs stem from physical climate risks and low-carbon transition pressures and propagate through four pathways: operating expenses, capital expenditures, revenue volatility and financing/risk transfer. Research is heavily concentrated on revenue volatility, typically proxied by visitation, with far fewer studies quantifying operating, capital, or financing costs. Empirical evidence links extreme events and environmental degradation to declines in arrivals and significant revenue losses, alongside rising costs such as clean-up, insurance and regulatory compliance. Sector-wide costs already reach hundreds of billions of US$ annually and are likely to rise non-linearly. Capital and financing impacts remain underexplored but include major adaptation investments and rising insurance premiums. Overall, climate change increases cost uncertainty, reduces financial predictability and shifts costs to tourists, with uneven spatial and temporal impacts and impacts on destination and firm competitiveness. Key research gaps must be addressed to better understand tourism’s exposure to climate-related business risks and inform adaptation.