Industry takes notice of global warming issues


Colleen Stephens says it is hard to know whether the changes she sees daily in and around Alaskas Prince William Sound are good, bad or just different.

For more than 30 years her family has been taking tourists through the sound on day cruises of glacier and wildlife destinations -- some 17,000 took their tours last year. While that qualifies her as a frontline observer of shifting temperature patterns in the far-north Pacific, she says that despite the growing debate over climate change, global warming is not a subject that seems to worry her customers. Questions about the subject, she says, are relatively rare.

We get a few visitors who ask if the receding glaciers they see are the result of climate change, she says, but we tell them there are as many glaciers advancing as there are receding. That isnt to say that were not seeing some changes, but are they related to global warming? Who knows?

The fact is that no one knows with any certainty what are the causes or ramifications of global warming. What is known is that the phenomenon is real and that it is causing significant changes in weather patterns worldwide. Those changes, in turn, are beginning to have a profound impact on travel and tourism.

In recent weeks, as the worlds attention has been focused on the devastation wrought by hurricanes Katrina and Rita, meteorologists have widely attributed the increasing frequency and ferocity of tropical storms to warmer-than-normal waters in the Gulf of Mexico.

Following a rapid rise in extreme weather around the world in recent years, the Gulf storms have fueled the debate over climate change.

Scientists, politicians and energy industry executives continue to argue about what is causing global warming, with some citing increasing levels of greenhouse gases, while others point to geological records suggesting that climate change is part of a natural cycle on Earth.

Signs everywhere

While that debate rages, however, the results of climate change are creating a sense of urgency in the tourism industry and in capital markets around the globe. Ominous signs are everywhere.

" In August, rain and melting snow from warming mountain tops caused lowland flooding that killed more than 60 people in Germany, Austria and Switzerland in two weeks time. Simultaneously, severe drought this past summer in southern Europe produced conditions that resulted in devastating forest fires in Portugal, Spain and elsewhere in the region.

" In the Caribbean, the increasing frequency of violent storms has left tourism-related businesses facing skyrocketing insurance rates -- and in some cases they are having great difficulty obtaining any risk coverage at all. As a result, tourism and travel-related businesses are finding it increasingly difficult to get the financing they need to rebuild or to develop new facilities in storm-ravaged areas.

" Perhaps the greatest impact of weather-related devastation was the crippling of North Americas oil industry after the one-two punch of Katrina and Rita. Pipelines were cut, refineries and oil-service company facilities were destroyed or severely damaged and several drilling platforms sunk. The result was soaring prices for diesel, gasoline and jet fuel.

Damage by hurricanes Katrina and Rita to the nations petroleum production capacity, and the corresponding surge in gasoline prices, came into sharper relief late last week when President Bush asked motorists to cut back on nonessential driving and urged his own staff and the federal government to lead the way.

Whatever the merits of those directives, they are bound to have a significant negative impact on the travel industry, especially on tourist destinations, which account for much of the nations nonessential leisure travel.

The Presidents remarks brought swift reaction from recovering tourism communities across the country. In Maine, where fall color tours are now luring motorists and tour companies from throughout the northeast, the Kennebeck Journal quoted the states tourism director, Dann Louis, as saying, The tourism industry across the country will probably be ruing the day he said that. I think its an unfortunate statement for him to make when the country is in a recovery effort.

Dangers real and imagined

Of course, at some point it becomes tempting to assign blame for all manner of natural disasters to global warming, even if the link is at best tenuous. Even so, a report released in mid-September by atmospheric scientists at the University of Colorado and the University of Georgia, published in the journal Science, linked warmer ocean temperatures to increased volatility in the weather and to climate changes that researchers suggested may be resulting from human activities.

Not all scientists agree that such a link exists. Some, including Roger Pielke, a political and environmental scientist at the University of Colorado, say the data are insufficient to make a definitive causal connection between global warming and greenhouse gases.

Confusing matters further is that global warming manifests itself in a number of different -- sometimes seemingly contradictory -- ways.

In Colleen Stephens corner of the far north, it is generally ice, not wind, that churns the debate. But just as in the Gulf of Mexico, warmer water is an empirical fact in Alaska, and its impact is only beginning to be apparent.

Most definitely we are having higher water temperatures in the Gulf of Alaska, Stephens said last week as she worked dockside at Stan Stephens Cruises in Valdez. But the impact on us is that we have wildlife adapting differently. We see some species we dont normally see in the region. Fish patterns and migration are different. The salmon returns are different.

But beyond simple observation, little is known for sure about what is causing all these changes. Even the fish hatcheries themselves are trying to find out why, she said.

Severe forest fires in Alaska last year, she noted, chased tourists from some areas of the state to relatively unaffected cruise operations along Alaskas coasts earlier in the season, causing a rush of business in June and less tourist traffic later in the season.

It balanced out, Stephens said. We have become like the wildlife -- we adapt.

A few hundred miles away, Alaskas Wood-Tikchik State Park, the largest park in the nation, draws thousands of hunters and fishermen annually. Park ranger Johnny Evans -- Ranger Johnny to locals -- says visitors worry more about water levels in lakes and streams than about glacial melting or rising temperatures.

Last year, we had low water levels, and that was bad for fishing and hunting, he said. This year the levels are more normal. So, can I say that global warming is affecting us here at the park? I cant.

A growing business concern

Far from Alaskas diverse, pristine environs, in board rooms across the U.S., travel industry leaders remain uncertain about how to plan for, or respond to, climate change -- and about whether changes in policies or operations are needed to accommodate shifting climates.

Most express deep concern about the potential impact of global warming on their bottom lines, yet admit that their concern has not yet had much impact on their business plans. What few changes they have made recently have mostly been reactive.

Vail Resorts, the Colorado-based operator of ski resorts and other tourism facilities in the western U.S., is as familiar with the economic impact of weather changes as any company in the travel industry.

Severe and prolonged drought could affect our otherwise adequate snowmaking water supplies, the company noted in a U.S. Securities and Exchange Commission disclosure last year. Unfavorable weather conditions such as drought, hurricanes, tropical storms and tornadoes can adversely affect our other resorts and lodging properties as vacationers tend to delay or postpone vacations if weather conditions differ from [normal].

Weather patterns are impossible to predict, as are the economic impact of those patterns, the company noted.

Vail already thinking green

Kelly Ladaga, head of corporate communications for Vail Resorts, said that while the company remains attuned to advances in meteorological research, concerns over global warming and its potential impact on ski operations havent yet become a major driver in corporate decision making.

I would say no, at this point, said Ladaga, whose company has made environmental awareness, fuel conservation and green issues part of its operating mantra, going so far as to use bio-diesel fuels in mountain resort vehicles and equipment.

But, then, we have already begun diversifying our business, going more toward hospitality and lodging, golf courses and such, she said.

That effort has reduced the companys dependence on ski resorts -- and its exposure to the whims of weather -- at a time when many scientists are warning that steadily rising global temperatures could reduce snow levels at ski resorts around the world.

Another very real possibility, these scientists say, is that warming could create more severe winter storms that would adversely affect transportation and the costs of trail and lift operations.

At Carlson Cos., the Minnesota-based operators of hotels, resorts, travel services and cruise operations, company officials say global warming and climate changes have not yet made their way into long-term, high-level planning. But Bill Sipple, vice president of development for Carlsons full-service hotels division, said weather patterns now figure into decisions at various levels.

We would certainly consider hurricane risk in considering a particular location and have done so in recent transactions, Sipple said. Generally speaking, we may or may not elect to pass on a deal we think has some limited hurricane risk, but we may also consider building in the additional cost of other items, such as physical plant improvements and insurance and risk-rate the transaction from there.

Meanwhile, risk management related to climate change has attracted more attention over the past year as global reinsurance companies have taken multi-billion dollar hits around the world from storms, fires and other climate-related issues.



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