Measuring risks and vulnerability of tourism to the COVID-19 crisis in the context of extreme uncertainty: The case of the Balearic Islands

Abstract

The COVID-19 crisis is dramatically affecting the world economy and, particularly, the tourism sector. In the context of extreme uncertainty, the use of probabilistic forecasting models is especially suitable. We use Monte Carlo simulations to evaluate the outcomes of four possible tourism demand recovery scenarios in the Balearic Islands, which are further used to measure the risks and vulnerability of Balearic economy to the COVID-19 crisis. Our results show that fear of contagion and loss of income in tourism emitting countries will result in a maximum 89% drop in arrivals in the Balearic Islands in 2020.Given that most tourism-related occupations are not highly skilled and are characterized by lower salaries, there are greater risks of loss of welfare, especially for women, who are a major share of the tourism labour force.The model shows important differences among minimum, average and maximum estimates for tourism sector production in 2021, reflecting considerable uncertainty regarding the speed of the sector's recovery. The results serve as a basis to prepare a range of policies to reduce destination vulnerability under different crisis outcomes.

Tourism, job vulnerability and income inequality during the COVID-19 pandemic: A global perspective

“…Among the cohort of tourism workers, women, youth and low-income workers are more likely to endure high employment vulnerability when tourism is in a crisis. This also holds true for the COVID-19 pandemic as these groups tend to be subject to more economic hardships, with higher unemployment rates and higher income losses ( Arbulú, Razumova, Rey-Maquieira, & Sastre, 2021 ; ILO, 2020 , ILO, 2021a ; Sun, Sie, Faturay, Auwalin, & Wang, 2021 ). Three fundamental characteristics can be used to describe their vulnerability to high-risk job contexts: exposure , risk , and coping capacity ( Fig.…”

Effects of COVID-19 on Variations of Taxpayers in Tourism-Reliant Regions: The Case of the Mexican Caribbean

“…Other studies were conducted to describe and/or forecast the impacts of COVID-19 on specific destinations and business sectors (e.g., lodging, commercial airlines, or casinos) using data from such varied sources as tourist arrivals, hotel reservations, employment, Google searches, and gross domestic product (GDP), among others. These investigations were conducted by Arbulú et al (2021) on the Balearic Islands in Spain, by Huang et al (2020) and Khan et al (2021) in the United States, by Kido-Cruz and Kido-Cruz (2021) in Mexico, by Lim and To (forthcoming) and McCartney (2021) on the Special Administrative Region (SAR) of Macao in China, by Wickramasinghe and Ratnasiri (2021) on the case of Sri Lanka, by Pham et al (2021b) on Australia, and by Foo et al (forthcoming) on the case of Malaysia.…”

Uncertainty analysis of tourism components in Tabriz

“…The model shows important differences among minimum, average and maximum estimates for tourism sector production in 2021, reflecting considerable uncertainty regarding the speed of the sector's recovery. The results serve as a basis to prepare a range of policies to reduce destination vulnerability under different crisis outcomes [5]. Tourism destinations are dynamically complex systems in which behavior is controlled by many interacting components and feedback loops.…”