Assessing the impact of explosive eruptions of Fogo volcano (São Miguel, Azores) on the tourism economy

Abstract

Abstract. The Azores are an active volcanic region that offers exceptional conditions for nature-based tourism, one of the main axes of economic growth in the archipelago. A future volcanic eruption may have long-term consequences to this economic sector. Therefore, it is fundamental to assess its vulnerability to volcanic hazards in order to try to mitigate the associated risk. This study proposes a new approach to assessing the economic impact of explosive eruptions on the tourism sector. We considered two eruptive scenarios for Fogo volcano (São Miguel Island), the most probable (Volcanic Explosivity Index, VEI, 4 sub-Plinian eruption) and the worst-case (VEI 5 Plinian eruption), both producing tephra fallout and pyroclastic density currents. The results of numerical simulations were overlaid with tourism-related buildings and infrastructure of Vila Franca do Campo municipality to identify the elements at risk. The loss present value method was used to estimate the benefits generated by the accommodation units over 30 years for different economic scenarios. The assessment of the economic impact using 2018 indicators reveals that in a near-total-destruction scenario, the economic loss is approximately EUR 145 million (considering a 2 % discount rate). This approach can also be applied to other volcanic regions, geologic hazards and economic sectors.