Water is one of our most precious resources, not just for everyday life but for businesses across the economy as well. Recent water crises in Cape Town and Sao Paolo have highlighted the problems that can arise and water scarcity is well recognised as an issue in sectors such as power generation, heavy industry, agriculture and food and beverages.
It is not such a high-profile issue in the tourism industry, but it is starting to be recognised as an important business risk.
Demand for fresh water is likely to outstrip supply by 40% by 2030 and a third of the world’s population will be living in areas of severe water stress by this time, according to industry body the International Tourism Partnership (ITP). “In most countries, water consumption per guest in hotels vastly exceeds that of the local population. Island nations and tourism destinations can be those most prone to water shortage, particularly where the tourism season coincides with the driest months.”
In response to the growing challenge, the International Tourism Partnership (ITP) has released a new Destination Water Risk Index as part of World Water Week in Stockholm. Destinations in densely-populated Asian countries have the highest exposure.
The Index highlights the twelve most water-scarce priority tourism destinations in the world. The markets with the highest risk water-scarce destinations are located in Indonesia (Bali, Jakarta and Surabaya), India (Mumbai and Delhi), Thailand (Bangkok), China (Beijing, Qingdao, Hangzhou and Xian), United Arab Emirates (Dubai) and the Philippines (Manila) out of almost 70 priority destinations analysed overall.
With five of the top 12 water-stressed destinations in India and Indonesia, it is clear “that any hotel company operating in these countries faces acute water risks and related costs, and will do so increasingly in the future,” the ITP says.
The group hopes the Index, which looks at water stress, future water cost increase risk, water usage intensity per occupied room, hotel supply, and hotel pipeline growth, will “help hotel developers, companies, their properties and wider tourism stakeholders to better understand and address their local water risk and its financial implications in the largest hotel markets in the world”.
One way it does this is by revealing the destinations where water is currently undervalued and costs could dramatically increase in the face of shortages. In some locations the Index demonstrates that the cost of water is likely to increase by more than 60 times its current price.
Launching the Index at World Water Week in Stockholm, ITP Director Madhu Rajesh said: “The hotel sector recognises its responsibility to better manage water. Realising that island nations and tourism destinations can be those most prone to water shortage, particularly where the tourism season overlaps with the driest months, we have captured this critical data for our members and the wider tourism industry.
“Large-scale tourism growth is forecast in future years. Increased resource use will mean water shortage becomes a challenge for tourism businesses, leading to operational issues, cost increases and reputational risks.
“Solutions exist to prevent those risks by adopting a water stewardship approach. ITP’s members have shown – for example in Cape Town – that by working collaboratively and employing a range of measures water scarcity can be mitigated. This Index, with a first-of-its kind dataset, will help developers, Corporate Responsibility (CR) teams and property managers evaluate risks and take action in other high-risk destinations, to help prevent the next Cape Town and work towards sustainable growth of the hotel industry in water stressed destinations.”
The launch was supported by ITP members including Hilton, Hyatt, InterContinental Hotel Group (IHG) and Radisson Hotel Group.
The Chair of ITP’s Board of leading hotel group members, Wolfgang Neumann said, “Water is a critical issue for the hotel sector to address. It is imperative we do all we can to protect this vital resource for generations to come. We must examine our supply chains and embed water stewardship at all levels to ensure water-use efficiency, sustainable withdrawals and a consistent supply of freshwater thereby helping to reduce the number of people affected by water scarcity around the world.”