The economic impact of the inoperability of the airport at a small-island tourism destination: The case of Madeira

Climate change means that tourism on small islands is increasingly vulnerable to the disruptive effects of adverse weather conditions. Many small islands rely upon a single airport, so when weather conditions cause inbound flights to be delayed, diverted, or even cancelled, this will tend to reduce tourists' length of stay. There may also be longer-term damage to the destination's image in terms of transport reliability. This paper sets out to estimate the economic impact of weather-related flight delays and cancellations at a small-island tourism destination. Using Madeira as an example, a two-stage estimation approach was developed using both primary and secondary data. Based on the premise that around 1% of tourists are affected by delays that result in shorter stays, several scenarios were developed and estimates of their economic impacts computed. The results suggest that while the short-term economic impact may be relatively small, the longer-term effects may be more substantial. • Small-island air transport is increasingly vulnerable to disruptive weather events. • Inbound flight delays reduce tourist time-in-destination and thus their spending. • Demand may also fall if the destination gains a reputation for flight disruption. • A strong financial case exists for the authorities to introduce mitigation measures.