Economic Effects of Red Tide, Karenia brevis, on the Tourism Industry Along the Gulf of Mexico Coast of Central Florida

Abstract

This study examines the impacts of red tide, Karenia brevis, cell intensity on collected tourism tax revenues by municipality along the central Gulf of Mexico coast of Florida. The study area consists of 27 municipalities within 3 separate Florida counties that rely heavily on tourism dollars to maintain the quality and profitability of tourist amenities. Descriptive and spatial-temporal statistical methods are used to identify the economic impacts created by K. brevis between 2000 and 2015.

Analysis of tourism tax revenue for these coastal municipalities indicated that increased cell intensities of K. brevis decrease these revenues significantly. Only red tide samplings that were within range of affecting the selected coastal municipalities were analyzed for this study. Although the economic impacts resulting from K. brevis exposure was minimal, it was statistically significant throughout the study period. Previous studies used smaller areas and shorter time frames, where this study expanded the study area across three counties and throughout 15 years of recorded tax revenues. Control variables used, the presence of tropical storms or hurricanes and the total lodging facilities by municipality, resulted in a statistically significant decrease and increase in tourism tax revenue, respectively. The significant decrease in tourism tax revenue resulting from the presence of a tropical storm or hurricane would be a more accurate variable to address economic impacts from these coastal communities. The use of a cross-sectional time-series regression model was used for this study to ensure that the spatial and temporal scales of measurement were optimized.