1. Tourism Industry at Risk: The Economic Impact of Climate Change
Mr. Damani Thomas

2. Tourism Industry at Risk: The Economic Impact of Climate Change
Climate Change Conference: Impacts on the Caribbean
June 15-17, University of the West Indies, Mona
Damani Thomas
M.Sc. Economics Student, UWI, Mona

3. Outline of Presentation
The economic value of Jamaica’s tourism industry
The climate’s contribution to tourism
Expected impacts of climate change
Climate change impacts on demand for tourism
Projected costs of climate change to the tourism industry
Mitigation and Adaptation
Recommendations

4. The economic value of Jamaica’s tourism industry
Tourism has been the largest foreign exchange earning sector over the past decade, generating over US$1 billion per annum
Tourism industry accounts for approximately 7% of GDP
Tourism industry accounts for approximately 10% of the employed labour force
Tourism industry provides an important impetus for growth in other sectors
Each $1 spent in the tourism industry generates another $1 of output in the other sectors
Source: McCatty and Serju, 2006

5. Multiplier Effect per $1 spent in the Tourism Industry on Other Sectors
Change in output ($)
Additional Employment
Transport
1.01
890
Hotel
0.89
2178
Manufacturing
1.27
479
Agriculture 4
2471
Construction
0.39
619
Electricity
0.08 41
Distributive Trade
0.14
415
Other Sectors
0.29
232
Source:McCatty and Serju, 2006

6. Climate’s contribution to tourism
Climate is an important component of the island’s tourism resource base
Jamaica’s tourism product is based primarily on its tropical climate and coastal resources
Tourism industry is therefore highly susceptible to the direct and indirect impacts of climate change

7. Expected impacts of climate change
- Sea level rise
Saline intrusion into freshwater
aquifers
Coastal flooding and erosion
- Increased temperatures
Heat stress
Coral bleaching
Biodiversity loss
Increased emergence of vector borne
diseases

8. Expected impacts of climate change (cont’d)
Changes in rainfall patterns
Droughts or floods
Decreased fresh water availability
Increased intensity of storm activity
Direct damage of infrastructure
Loss of lives

9. How climate change impacts will affect tourism
Direct damage to tourism plant and natural resources
Hotels
Coral reefs
Beaches
Loss of attractiveness of the region as a
destination
Impacts on health – emergence of dengue, malaria, etc.
Reduced dive tourism if coral reefs are damaged
Loss of employment in the industry
Increased insurance costs for properties in
vulnerable areas

10. Climate change impacts on tourism demand
Promotion of tourism based on sun, sea and
sand
Climate change will lead to a deterioration of these
resources
Visitors will be less attracted to island as a tourist
destination
Climate change therefore puts a downward pressure on
the island's tourism demand

11. Climate change impacts on tourism demand
Jamaica’s major tourist market is north America
North America accounted for approximately 80% of tourist
arrivals over the past 5 years
Rising temperatures as a result of ongoing climate change
will lead to milder winters in north America
This in turn, will remove the need for some visitors to visit
the island

12. Projected costs of climate change to the tourism industry
Without the necessary mitigation and adaptation strategies, expected losses for the Jamaican tourism industry are:-
Low Probability scenario up to 2050
reduced tourism – US$44.2
loss of beaches – US$23
replacement – US$1.5
lost dive-,eco-tourism – US$2.2
Total expected losses – US$70.9
Figures: 1999 US millions
Source: King, 2003

13. Projected costs of climate change to the tourism industry
High Probability scenario up to 2050
reduced tourism – US$134.4
loss of beaches – US$199.7
replacement – US$12.9
lost dive-,eco-tourism – US$6.7
Total expected losses – US$353.7
Figures: 1999 US millions
Source: King, 2003

14. Mitigation and Adaptation
Firstly, we must recognise that tourism is a major contributor to GHG emissions.
Mitigation srategies must therefore include reducing the industry’s emissions.
Sea level Rise
seawalls
preservation of natural sea defences (e.g. coral reefs)
prohibition of sand mining
Water
de-salinization
water harvesting
drip irrigation
Tourism Demand
diversification of tourism offerings (e.g. green and heritage
tourism

15. Physical Infrastructure
energy efficient building designs
facilities that incorporate future climate
change
increased insurance costs should be
factored into future profitability
Government Policy
fiscal incentives for compliance
land use planning
coastal defence
Adaptation and Mitigation will require significant capital outlay and political will, however the long run benefits far outweigh the short run costs.

16. Recommendations
A urgent need exists for sustainable tourism development
that incorporates climate change mitigation strategies
Regional petition of the governments of developed
countries to reduce GHG emissions
Promotion of green tourism
Energy savings by industry
Private and public partnership to formulate and implement
tourism plan that takes climate change into
consideration
Future promotions should be based primarily on increasing
tourist’s spending and their average length of stay

17. Thank you