Harmful algal blooms and coastal business: Economic consequences in Florida

The impacts of harmful algal blooms (HABs) on coastal businesses in the Ft. Walton Beach and Destin areas of northwest Florida were estimated for 1995 1999. Separate time-series models for the restaurant and lodging sectors revealed that HABs reduced restaurant and lodging revenues in the localized study area by $2.8 million and $3.7 million per month, respectively, which represents a 29% to 35% decline in average monthly revenues for each sector during months of red tide incidence. By comparison, a tropical storm was found to reduce monthly restaurant revenues by $0.5 million, and each inch of rainfall reduced revenues an additional $41,000. Adverse weather was not found to affect the lodging sector. While the estimates are conservative given the resolution of data, the magnitude of effects indicate that coastal communities have suffered significant revenue losses due to HABs and that these losses are larger than caused by other environmental events.