
The Zurich-Mandala Climate Risk Index: The impact of climate change on the Australian tourism industry
09.09.2024 - 06:47
Mandala Partners (Mandala) in conjunction with Zurich Financial Services Australia (Zurich) has produced Australia’s first Climate Risk Index for the Australian tourism sector. This report analyses the impact of climate change on Australia’s top tourism sites – including major airports, national parks, beaches and museums – under different Intergovernmental Panel on Climate Change (IPCC) scenarios.
The tourism industry plays an important role in Australia’s economy
Australia’s tourism industry has long played an important role in the nation’s economy and this will continue into the future.
Domestic travel remains the most economically significant form of tourism. Of the $173 billion in tourism spend in the year ending March 2024, 82 per cent was from domestic day and overnight travel.
However, the tourism industry – particularly in regional areas – is undergoing a period of significant change in the face of more frequent and severe weather events and other conditions driven by climate change.
Travel demand has already reached (and across some measures, exceeded) pre-pandemic levels, adding to the growing pressure on many tourism sites that are already facing increasingly complex conditions.
Governments have invested significantly in supporting the visitor economy. In parallel, but sometimes not in conjunction, funds have also been dedicated to protecting many natural and heritage sites across the country.
Climate change is significantly altering many of Australia’s tourism destinations
Climate change is already impacting many of Australia's tourism sites. Even under modest climate scenarios, this impact is expected to worsen. The Zurich-Mandala Climate Risk Index has been used to analyse the risk of climate change to 178 tourism assets, including major airports. The index uses IPCC climate modelling along with proprietary climate impact assessments to understand the unique risks faced by individual sites.
The analysis found that half of Australia’s tourism sites and airports currently fall into the highest three climate risk categories. Under the intermediate SSP2-4.5 scenario, assuming 2 degrees Celsius of warming by 2041-2060, this is set to rise to 55% of sites by 2050. Under a more extreme (3 degrees) scenario, 80% of tourism sites will experience an increase in risk between 2025 and 2050.
Analysis also found that risks varied significantly by site type (natural or man-made) and category (for example, beaches versus vineyards or rainforests). The index found that Queensland has both the highest number of sites facing risk overall (79%) and the most sites in the highest risk category compared to any other jurisdictions.
In terms of economic impact, similar revenue reductions experienced following the bushfires of 2019/20 could jeopardise up to 176,000 jobs nationally, 65 per cent of which are outside capital cities.
More must be done to ensure tourism is resilient to the reality of climate change
In the face of a changing climate, governments should consider the significant impact of natural perils – such as drought, flood and fire – on Australia’s tourism economy.
Investments should be made to improve the resilience of these assets against these various risks.
For natural sites, this requires a balance between retaining natural beauty and ecosystem balance, whilst using man-made interventions to mitigate and diversify risk.
More emphasis should also be placed on site planning for man-made sites, such as airports, railways, roads and museums. This includes location and material diversification to adapt structures to a complex mix of natural perils they may face.
Governments should also ensure climate resilience is a key pillar of its tourism strategies. Likewise, the tourism economy should be considered as part of government climate, environmental and heritage strategies.
Read the full report here.
Read our latest posts

Reducing out-of-pocket costs for Australian healthcare consumers
In partnership with Private Healthcare Australia (PHA), our latest report reveals the increasing strain of out-of-pocket healthcare costs on Australian consumers. Without urgent action, these costs could reach $1.6 billion by 2030, driven by limited competition, lack of price transparency, and weak consumer protections. Costs have already surged 12% in the past year, and 330,000 Australians are expected to delay care due to affordability concerns. Transparent pricing and stronger protections could save consumers millions. Read our full analysis to understand the challenges—and the solutions—that could make healthcare more accessible for all.
27 Mar, 2025

The Social Dividend: An Actuarial Case for Higher Income Support
Our new report explores the full impact of increasing JobSeeker—not just the economic benefits, but also the significant social returns and efficiency savings. Using actuarial techniques, micro-data analysis, and leading econometric research, we quantify the broader benefits of raising JobSeeker to 90% of the Age Pension. Our findings show that every $100 invested delivers a $24 social return, improving health outcomes, reducing justice system interactions, and lowering long-term welfare dependence. Importantly, the efficiency savings outweigh any potential reduction in job search intensity. This report provides new insights into why increasing JobSeeker is both a smart investment and a necessary reform.
27 Mar, 2025

20-years of Fitted for Work driving employment success
To mark 20 years of Fitted for Work, Mandala Partners conducted an economic analysis to quantify the organisation’s impact. Our findings show that for every $1 invested, Fitted for Work delivers $2.19 in immediate economic benefits, unlocking $86 million in value over two decades by supporting 45,000 clients. The analysis highlights that Fitted for Work reduces job search duration by half compared to the national average, significantly improving employment outcomes. Notably, the organisation has expanded its support for older women, addressing a critical and growing need in the community.
27 Mar, 2025

The value of shifting to four-year parliamentary terms
This research quantifies significant benefits of extending Commonwealth House of Representatives' terms from three to four years. While Australia's states and territories have adopted four-year terms, the Commonwealth remains among only eight countries globally with three-year or shorter terms.Our analysis shows potential gains of $59-71 billion over 20 years through reducing election frequency. Benefits include $4.6 billion in avoided direct costs, $40.7 billion in enhanced business investment from reduced electoral uncertainty, and $14-26 billion through improved government policy.
17 Mar, 2025