We’re Going to Build a (Sea)Wall: Cognitive Dissonance in The Trump Organization
How does Donald Trump—an outspoken skeptic of climate change—plan to succeed in the hospitality industry, where the effects of climate change are so damaging?
“It is with great pleasure that I welcome you to the Mar-a-Lago Club, one of the most highly regarded private clubs in the world,” proclaims Donald Trump on the website for his opulent beachfront property in Palm Beach, Florida. Unfortunately for Mr. Trump, Mar-a-Lago is only about six feet above sea level, and will likely become mostly submerged underwater within several decades. How does Trump—an outspoken skeptic of climate change—plan to succeed in an industry where the effects of climate change are so damaging?
Context: Climate Change Challenges in Hospitality
Research indicates that Global Mean Sea Level (GMSL) could rise by six feet or more by the end of the century due to Antarctic melting caused by Greenhouse gas emissions [1]. Absent preventative action, hotels and other attractions close to these elevations will experience significant flooding, incurring large infrastructure costs and driving down consumer demand, or even become submerged entirely, effectively rendering the property valueless. Experts believe that Mar-a-Lago may be flooded 210 days per year within the next 30 years, and the outlook is not much better for many of The Trump Organization’s other properties.
Chart 1: Projected Flood Days per Year on Trump-branded properties [2]
Climate issues affecting The Trump Organization and the broader hospitality industry extend beyond increases in sea level, however. For instance, several consequences of climate change impact consumer demand for tourism. As regulations become tighter on oil & gas production, fuel prices may increase, causing a decrease in demand for travel as air and land transportation become more expensive. Demand for tourism in developing countries may be further hampered by climate-induced food and water shortages that lead to political and social instability. In addition to overall demand reduction, tourism demand is likely to shift as global warming causes some regions to become too hot while others become more comfortable.
Commodity price increases and volatility have implications on the cost side of hospitality P&Ls as well. The US hotel industry consumes roughly 150 billion liters of water and 240 million kWh of electricity per year [3][4]. As key cost drivers, any increases or volatility in these commodity prices will pressure the margins of hospitality businesses.
What Is Donald Trump Doing About It?
In the case of Trump’s south Florida properties, his best hope may be the local government. The nearby city of Miami, for example, is spending $500 million to build seawalls, raise roads, and install pumps to drain water from the streets [5]. While temporary measures, the city hopes these efforts will buy time to develop more radical technological breakthroughs.
Across the Atlantic, however, Trump has taken a more hands-on approach to counteract the effects climate change on his business. Trump applied for a permit to build a seawall himself on the golf course at the Trump International Hotel in Ireland to prevent erosion caused by higher sea levels and more turbulent tides. Despite publically referring to global warming as a “hoax,” the permit application specifically mentions the seawall’s purpose as combatting “global warming and its effects” [6].
What Else Should He Do?
To further combat the effects of climate change, hospitality businesses such as The Trump Organization can pursue several options:
- Resource Efficiency. Retrofitting existing buildings with resource-efficient technologies such as energy management systems, LED lights, or plumbing hardware can reduce carbon footprint and operating costs. Hotels can also encourage guests to consume less water and electricity with similar effect. These initiatives have helped chains such as Marriott and Starwood improve their resource efficiency by 10-20% since the late 2000s [7][8].
- Conservative CAPEX. Particularly for hotels dependent on local beauty or biodiversity to attract guests, investing to protect these local resources can help buoy consumer demand (in addition to benefiting the environment). Further, developers should consider investing in on-site generators and desalination plants to combat volatility in energy and commodity prices.
- Plan for Change. When selecting locations for new properties, hospitality developers should choose locations with minimal risk of climate disruption, most specifically those at higher elevations.
While not reflective of all climate-related challenges plaguing the hospitality industry, The Trump Organization is a notable microcosm that particularly illustrates the criticality of acknowledgement. Trump needs to accept that his business is facing a real problem before he can lead it down the path to recovery.
713 Words.
[1] Robert DeConto & David Pollard, “Contribution of Antarctica to past and future sea-level rise,” Nature (March 2016), accessed November 2016.
[2] Suzanne Goldenberg, “Water world: rising tides close in on Trump, the climate change denier,” The Guardian (July 2016), https://www.theguardian.com/us-news/2016/jul/06/donald-trump-climate-change-florida-resort, accessed November 2016.
[3] Russ Homer, “Water Benchmarking: Is it Important to Your Hotel?” Hotel Business Review http://hotelexecutive.com/business_review/3282/water-benchmarking-is-it-important-to-your-hotel, accessed November 2016.
[4] Cornell Hotel Sustainability Benchmarking Index 2016: Energy, Water, Carbon (2014 Data Set).
[5] Joey Flechas & Jenny Staletovich, “Miami Beach’s Battle to Stem Rising Tides,” Miami Herald (October 2015), http://www.miamiherald.com/news/local/community/miami-dade/miami-beach/article41141856.html, accessed November 2016.
[6] Maya Rhodan, “Donald Trump Calls Climate Change a Hoax, but Worries It Could Hurt His Golf Course,” Time (May 2016), http://time.com/4345367/donald-trump-climate-change-golf-course/, accessed November 2016.
[7] “Global Citizenship at Starwood 2014 Update,” https://www.starwoodhotels.com/Media/PDF/Corporate/GCT15009_GC_Report.pdf, accessed November 2014.
[8] Marriott Environmental Intensity Reductions, http://www.marriott.com/corporate-social-responsibility/corporate-environmental-responsibility.mi, accessed November 2016.
Great point of view and original artwork photo! Interesting that the man who doesn’t acknowledge climate change is happening, has hotels that will be directly impacted from climate change!
A few other thoughts on what Trump Hotels can do to minimize environmental impact:
1) Use types of grass that require less water around Trump hotel properties as well as golf courses.
2) Install low flow shower heads which can cut down on water usage by 25-60% http://www.energy.gov/energysaver/reduce-hot-water-use-energy-savings
What a great perspective, I love this post. I am surprised this hasn’t come up in the media as an example of Trump’s hypocrisy, but I suppose they were preoccupied with other matters.
There’s another post in Section H about eco-tourism. Perhaps this is something that hospitality companies, including Trump, can invest in to mitigate the impact of climate change on current properties. However, your points about the indirect impact of climate change, like political instability, will remain regardless. And I think for now, we’re going to need to rely on hospitality companies other than Trump Inc to set the example here, regardless of what happens on Tuesday.
This article sums up a growing problem for all communities that are along the coastline and illustrates how communities, businesses, and government will need to come together to solve this issue. The Donald is actually effectively illustrating how individuals will need to form a collective to work together to solve these issues; whether it is conserving energy or investing in preventative flood measures, people will need to work together to implement short term and long term solutions. Another option that Donald Trump could investigate doing is using his organizations size to lobby the government to institute tax credit for business that invest in infrastructure that protects at-risk communities from the immediate threat of climate change.
What worries me about climate change is misaligned incentives and people generally being misinformed. Donald Trump, alongside many others, may not care about the impact of the climate on their business 30 years down the road. Certain industries and people seem okay with maximizing their lifetime net worth at the expense of future generations. Secondly, too many voters in the United States do not think climate change is real. If we can not agree that is even happening I am concerned about our ability to figure out how to fix the issue.
Fascinating. There’s an incredible amount of hypocrisy in politics, especially when it comes to global warming. But this is an especially dangerous form of hypocrisy: while the private sector has a major role to play in developing clean technology, harnessing efficient, sustainable fuel sources, and leading competitors by example, the buck ultimately stops with the government. The city of Miami, as you mentioned, will sink — or survive — depending on the actions of its government.
When political expediency begins to “trump” meaningful action against climate change, the effects aren’t just felt on Capitol Hill; they manifest themselves in our educational system, in our private sector, and in the choices we make at home.
This seems to be an illustration of where differences of opinion create different investment decisions. Because Trump doesn’t agree with climate change he is more willing to make an investment in something that proponents of climate change would call a risk. Or perhaps his time scale desires money now rather than years down the road. He may sell the properties when they are closer to being at risk and just using the time now when they are great properties to pad his wallet. Also, because he doesn’t consider the climate changes to be real, then he will not be worried about taking any action to prepare for them. For him to take action, he would probably need to be convinced first.