This study investigates the direct and spillover effects of hurricane strikes on tourist arrivals in the Caribbean. We utilize a physically based index of hurricane destruction and develop a measure of indirect hurricane exposure on nearby islands to identify spillovers. After accounting for variation in location, time, and location-specific seasonality, we find that hurricanes significantly decrease the number of tourist arrivals on the islands hit, but increase the number of arrivals on nearby islands. This tourism spillover effect is more pronounced for cruise ship arrivals than air arrivals and generally disappears after 1 year. This is likely due to cruise ships changing their routes to non-affected destinations in reaction to a hurricane, resulting in a significantly larger spillover. Our results suggest that policymakers could coordinate with the tourism industry to encourage the diversion of tourism by air to reduce the negative economic consequences of hurricanes in the region.
Collalti et al. (Thu,) studied this question.