The impact of climate change on Caribbean tourism demand

Climate change can either positively or negatively impact on the attractiveness of a destination. To evaluate the potential effects of these changes for Caribbean destinations, a cross-country tourism demand model is augmented with relative tourism climatic indices to examine the importance of an island's climatic features. The model is estimated using a dynamic panel approach and monthly observations over the period 1977-2006. Combining the scenarios for future climatic conditions as well as the coefficient estimates obtained, anticipated scenarios of the direct effects of climate change on tourist arrivals to the region are provided. In addition, merging this data with estimates of average visitor expenditure gives a dollar estimate of the impact on the tourism industry and the overall economy.