A Disappearing Great Barrier Reef: Rebranding As We Lose a Global Treasure

The Great Barrier Reef has been rated as one of the Seven Natural Wonders of the World [1]. It’s a World Heritage Site and a symbol for Australia.

Unfortunately, it’s in danger of disappearing altogether because of climate change. The reef has already lost half of its size since 1985 [2], and recent coral bleaching presents an existential threat to one of the most beautiful places on earth.

That prospect is a tragedy in and of itself. But there are wide-ranging impacts to this that go far beyond that loss.

Tourism is a hugely important part of the economy is Queensland, the Australian state where the Great Barrier Reef is located, representing 4.5 percent of the state’s economy [3]. But even that doesn’t tell the full story.

In places like Cairns, where the Great Barrier Reef is the primary tourist draw, tourism represents over 15 percent of the local economy [4]. And on Hamilton Island, the economy is so dependent on the Great Barrier Reef that the airport is called the Great Barrier Reef Airport.

This post looks at the Beach Club Hotel, rated by TripAdvisor as the #1 property on Hamilton Island [5].

It’s a luxurious spot. For a room the weekend of January 13, 2017—peak season during the Australian summer—rooms start at $800 AUD per night, or about $615 USD as of Nov. 3, 2016 [6]. Other amenities of the resort include a restaurant that has a pre-fixe menu for $275 AUD per person [7].

They charge a lot because they have a tremendous product: a great, beach-front property in one of the world’s unique locations on the Great Barrier Reef.

But as that changes, and if the Reef continues to shrink, that will force the hotel to change their business somewhat substantially, because it takes away their primary value proposition.

Yes, they’ll continue to have a luxury resort, but travelling to Hamilton Island from elsewhere in Australia—let alone the rest of the world—is expensive and time-consuming. If and when the Reef continues to disappear, the island loses its distinguishing characteristic. International customers will be less likely to go to Hamilton Island, and therefore to the Beach Club, and will instead be drawn to other luxurious beach-front get-aways that are more easily accessible: Hawaii, Bali, etc.

Even for Australian customers, there are plenty of cheaper and more easily accessible resorts.

What that means for the Beach Club Hotel is that they will have to rebrand, and that almost certainly means dropping their prices to make themselves more appealing. As they drop their prices, it will necessarily become less of a luxury resort and more of a mainstream hotel.

That has implications in terms of how much they can pay their staff, how they can and choose to maintain rooms, training for employees, customer service, and continued investment in the property.

Strategically, it leaves Beach Club Hotel management with a few different options. They can accept that go-forward path and allow themselves to move with market and natural forces that will ultimately draw them into a more mainstream market. They can also try something more drastic.

There was a time, for example, that Myrtle Beach, S.C., wasn’t the spring break haven that it’s become today. But at some point, they decided to stop being a classy town and to start being one of America’s capitals of collegiate Bacchanalia and inebriation. Hotel management could try a more aggressive strategy that changes their image altogether—focus on a specific demographic, change what they offer, etc.—to try to thwart the changes that will come from a shrinking Great Barrier Reef.

But that’s a risky strategy. Even if it were advisable, it just seems unlikely.

This doesn’t even begin to touch on the operational issues associated with rising water levels caused by climate change, but that’s another major issue for a two-square-mile island that sits not too high above sea level. But unlike this core business issue, that one will likely have to be solved as these theoretical possibilities start to materialize.

The Beach Club Hotel may be able to sustain business for a while. There’s an argument to be made that as people become aware of the shrinking Reef, it will drive up demand from people who want to see it before it disappears.

But if the Great Barrier Reef is in the mortal peril people think it is, then business like the Beach Club Hotel will have to change their value proposition to be relevant and competitive. And that calls for aggressive changes.

Word Count: 750

 

[1] “Great Barrier Reef teems with life off Australian coast,” CNN, https://web.archive.org/web/20060721011803/http://www.cnn.com/TRAVEL/DESTINATIONS/9711/natural.wonders/, 1997, accessed 2016.

[2] Juliet Eilperin, “Great Barrier Reef has lost half its corals since 1985, new study says,” Washington Post, October 1, 2012, https://www.washingtonpost.com/national/health-science/great-barrier-reef-has-lost-half-its-corals-since-1985-new-study-says/2012/10/01/c733025c-0bda-11e2-bb5e-492c0d30bff6_story.html, accessed 2016.

[3] Tourism Queensland, “About TQ,” https://web.archive.org/web/20090914225016/http://www.tq.com.au/about-tq/profile/profile_home.cfm, accessed 2016.

[4] Cairns Regional Council, “Cairns: Tourism and Hospitality Value,” http://economy.id.com.au/cairns/tourism-value, accessed 2016.

[5] TripAdvisor.com, “Hamilton Island Hotels,” https://www.tripadvisor.com/Hotels-g255085-Hamilton_Island_Whitsunday_Islands_Queensland-Hotels.html, accessed 2016.

[6] https://www.tripadvisor.com/Hotels-g255085-Hamilton_Island_Whitsunday_Islands_Queensland-Hotels.html

[7] http://www.hamiltonisland.com.au/restaurants/beach-club#fG4urrRKe2GcqFzU.97