{"id":9864,"date":"2016-11-03T23:01:34","date_gmt":"2016-11-04T03:01:34","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/were-going-to-build-a-seawall-cognitive-dissonance-in-the-trump-organization\/"},"modified":"2016-11-03T23:01:34","modified_gmt":"2016-11-04T03:01:34","slug":"were-going-to-build-a-seawall-cognitive-dissonance-in-the-trump-organization","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/were-going-to-build-a-seawall-cognitive-dissonance-in-the-trump-organization\/","title":{"rendered":"We\u2019re Going to Build a (Sea)Wall: Cognitive Dissonance in The Trump Organization"},"content":{"rendered":"

\u201cIt 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,\u201d proclaims Donald Trump on the website for his opulent beachfront property in Palm Beach, Florida.\u00a0 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.\u00a0 How does Trump\u2014an outspoken skeptic of climate change\u2014plan to succeed in an industry where the effects of climate change are so damaging?<\/p>\n

Context: Climate Change Challenges in Hospitality<\/u><\/em><\/strong><\/p>\n

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].\u00a0 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.\u00a0 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\u2019s other properties.<\/p>\n

Chart 1: Projected Flood Days per Year on Trump-branded properties [2]<\/em><\/p>\n

\"projected-flood-days\"<\/a><\/p>\n

Climate issues affecting The Trump Organization and the broader hospitality industry extend beyond increases in sea level, however.\u00a0 For instance, several consequences of climate change impact consumer demand for tourism.\u00a0 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.\u00a0 Demand for tourism in developing countries may be further hampered by climate-induced food and water shortages that lead to political and social instability.\u00a0 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.<\/p>\n

Commodity price increases and volatility have implications on the cost side of hospitality P&Ls as well.\u00a0 The US hotel industry consumes roughly 150 billion liters of water and 240 million kWh of electricity per year [3][4].\u00a0 As key cost drivers, any increases or volatility in these commodity prices will pressure the margins of hospitality businesses.<\/p>\n

What Is Donald Trump Doing About It?<\/u><\/em><\/strong><\/p>\n

In the case of Trump\u2019s south Florida properties, his best hope may be the local government.\u00a0 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].\u00a0 While temporary measures, the city hopes these efforts will buy time to develop more radical technological breakthroughs.<\/p>\n

Across the Atlantic, however, Trump has taken a more hands-on approach to counteract the effects climate change on his business.\u00a0 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.\u00a0 Despite publically referring to global warming as a \u201choax,\u201d the permit application specifically mentions the seawall\u2019s purpose as combatting \u201cglobal warming and its effects\u201d [6].<\/p>\n

What Else Should He Do?<\/u><\/em><\/strong><\/p>\n

To further combat the effects of climate change, hospitality businesses such as The Trump Organization can pursue several options:<\/p>\n