Time is of the Essence: Adaptation of Tourism Demand to Climate Change in Europe

48 Pages Posted: 3 Mar 2014

See all articles by Salvador Barrios

Salvador Barrios

European Commission, JRC - IPTS

J. Nicolás Ibañez

European Commission

Date Written: March 3, 2014

Abstract

This study analyses the potential impact of climate change on EU tourism demand and provides long-term (2100) scenarios accounting for adaptation in terms of holiday duration. Our long-term projections for tourism demand are based on hedonic valuation of climatic conditions combining hotel price information and travel cost estimations. This approach allows us to analyse together the climatic aspect of recreational demand and its travel cost dimension and thus to draw alternative hypotheses regarding the time dimension of tourism demand. We derive alternative scenarios for adaptation of holiday in terms of holiday frequency and duration. We find that the climate dimension plays a significant (economically and statistically) role in explaining hedonic valuations of tourism services and, as a consequence, its variation in the long-term are likely to affect the relative attractiveness of EU regions for recreational demand. In certain cases, most notably the Southern EU Mediterranean countries climate condition in 2100 could under current economic conditions, lower tourism revenues for up to -0.45% of GDP per year. On the contrary, other areas of the EU, most notably Northern European countries would gain from altered climate conditions, although these gains would be relatively more modest, reaching up to 0.32% of GDP on an annual basis. Overall our results suggest that the change in holiday duration appears to be more beneficial than the change in the frequency of holidays in view of mitigating the cost of climate change for the tourism sector. These two time dimensions of adaptation are likely to be conditioned by broader societal and institutional factors, however.

Keywords: Tourism demand, Climate change

JEL Classification: L8, Q5

Suggested Citation

Barrios, Salvador and Ibañez, J. Nicolás, Time is of the Essence: Adaptation of Tourism Demand to Climate Change in Europe (March 3, 2014). FEEM Working Paper No. 19.2014, Available at SSRN: https://ssrn.com/abstract=2403725 or http://dx.doi.org/10.2139/ssrn.2403725

Salvador Barrios (Contact Author)

European Commission, JRC - IPTS ( email )

Edificio Expo
C/ Inca Garcilaso s/n
Seville, 41092
Spain
34 954 48 82 08 (Phone)
34 954 48 82 08 (Fax)

J. Nicolás Ibañez

European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

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