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Fire takes no vacation: impact of fires on tourism

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  • Otrachshenko, Vladimir
  • Nunes, Luis C.

Abstract

Many Mediterranean-type climates around the world will face increased risks of wildfires as a consequence of climate change. In this study we consider the case of Portugal and estimate the impact of the increasing risk of forest fires on tourism. Using data for 278 municipalities for the 2000–2016 period, we find a considerable negative impact of burned areas on the number of tourist arrivals, both domestic and inbound. We go beyond the traditional impact analysis and provide predictions for 2030 and 2050. The estimated annual costs to the Portuguese economy due to the impact of burned areas in 2030 range between €17.03 and 24.18 million for domestic tourist arrivals and between €18.26 and 38.08 million for inbound ones. In 2050, those costs will increase at least fourfold. These findings underscore the importance of taking the forest fire risks into account when planning local investments.

Suggested Citation

  • Otrachshenko, Vladimir & Nunes, Luis C., 2022. "Fire takes no vacation: impact of fires on tourism," Environment and Development Economics, Cambridge University Press, vol. 27(1), pages 86-101, February.
    • Handle: RePEc:cup:endeec:v:27:y:2022:i:1:p:86-101_5
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    Cited by:

    1. Yen E. Lam-González & Carmelo J. León & Javier de León & Chaitanya Suárez-Rojas, 2022. "The Impact of Degradation of Islands’ Land Ecosystems Due to Climate Change on Tourists’ Travel Decisions," Land, MDPI, vol. 11(10), pages 1-16, September.
    2. Raphaelle G. Coulombe & Akhil Rao, 2023. "Fires and Local Labor Markets," Papers 2308.02739, arXiv.org.
    3. Robert Steiger & O. Cenk Demiroglu & Marc Pons & Emmanuel Salim, 2023. "Climate and carbon risk of tourism in Europe," Post-Print halshs-03932019, HAL.
    4. Meier, Sarah & Elliott, Robert J.R. & Strobl, Eric, 2023. "The regional economic impact of wildfires: Evidence from Southern Europe," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).

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    More about this item

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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