Impact of SLR on Beach-Tourism Resort Revenue at Sahl Hasheesh and Makadi Bay, Red Sea, Egypt; A Hedonic Pricing Approach

Abstract

Coastal erosion and inundation represent the main impacts of climate change and the consequential sea level rise (SLR) on beaches. The resultant deterioration of coastal habitats and decline in beach tourism revenue has been a primary concern for coastal managers and researchers. Nevertheless, the extent of SLR on beach tourism in Egypt remains relatively unknown. Therefore, this study investigates the relationship between beach width shrinkage due to SLR and the loss in tourist resort revenue. We use the hedonic pricing approach, which combines economic and environmental variables, to determine the environmental impact on beach tourism along 14 km of the coast of Sahl Hasheesh and Makadi Bay, Hurghada, Egypt. The resort revenue depends on the cumulative benefits from the market price of the resort rooms, which is a function of morphological variables and tourism variables. Three regression models (semi-log, double-log, and custom-log) were used to select the most appropriate functional hedonic model. Three coastal slopes were considered (0.03, 0.06, and 0.12) to address the uncertainty in beach width. When 0.06 coastal slope is used, the expected losses in revenue are 84,000, 220,000, and 546,000 USD/day period (representing 3%, 7%, and 18%) for 2030, 2050, and 2100, respectively, considering the lowest scenario representative concentration pathway (RCP2.6); for the worst case (RCP8.5 SLR), the expected losses are 142,000, 369,000, and 897,000 USD/day period (representing 5%, 12%, and 30%) for 2030, 2050, and 2100, respectively.