In a word, yes. The closer the subject's temperature is to the ambient temperature, the lower the contrast between the two.
We found this in our 2010 Axis thermal test we did in Hawaii - see results.
Even here in PA, in the midst of our thermal testing, it can be difficult to see warm subjects against sun-soaked background areas, on days when the temperature is nowhere even close to body temperature. Some manufacturers are better than others with this, and it depends greatly on range and FOV. At least one manufacturer explained that this is why visible/thermal combo units are as commonly available as they are, because "crossover" temperature conditions are the hardest to deal with for thermal, but may be much less so for visible cameras.
I would venture to say that "HOT" environmnts a large market for Thermal cameras i.e. boarder patrol and desert military applications.