Risk management of climate impact for tourism operators: An empirical analysis on ski resorts

Laura Ballotta; Gianluca Fusai; Ioannis Kyriakou; Nikos C. Papapostolou; Panos K. Pouliasis

doi:10.1016/j.tourman.2019.104011

Risk management of climate impact for tourism operators: An empirical analysis on ski resorts

Laura Ballotta, Gianluca Fusai, Ioannis Kyriakou, Nikos C. Papapostolou, Panos K. Pouliasis

Department of Economics and Business Studies

Research output: Contribution to journal › Article › peer-review

Abstract

The aim of this paper is to analyze the performance of hedging strategies based on snow and temperature options developed by ski operators to protect their profitability under adverse changes in climatic conditions. The setup is based on a joint non-parametric model for snow and temperature aimed at providing a modelling support for the assessment of the impact of these weather variables on the number of visitors at the ski resort. The analysis is carried out considering the case of Austrian Alps, and examines: i) the ability of the proposed approach to provide a realistic representation of the true data-generating process; ii) the variability reduction in the Profit and Loss of the ski operator offered by the suggested strategies; and iii) the tradeoff between the budget earmarked for hedging and profitability protection.

Original language	English
Article number	104011
Journal	Tourism Management
Volume	77
DOIs	https://doi.org/10.1016/j.tourman.2019.104011
Publication status	Published - Apr 2020

Keywords

Block bootstrap
Climate change
Options
Profitability
Risk management
Ski tourism
Weather variables

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.tourman.2019.104011

Cite this

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title = "Risk management of climate impact for tourism operators: An empirical analysis on ski resorts",

abstract = "The aim of this paper is to analyze the performance of hedging strategies based on snow and temperature options developed by ski operators to protect their profitability under adverse changes in climatic conditions. The setup is based on a joint non-parametric model for snow and temperature aimed at providing a modelling support for the assessment of the impact of these weather variables on the number of visitors at the ski resort. The analysis is carried out considering the case of Austrian Alps, and examines: i) the ability of the proposed approach to provide a realistic representation of the true data-generating process; ii) the variability reduction in the Profit and Loss of the ski operator offered by the suggested strategies; and iii) the tradeoff between the budget earmarked for hedging and profitability protection.",

keywords = "Block bootstrap, Climate change, Options, Profitability, Risk management, Ski tourism, Weather variables",

author = "Laura Ballotta and Gianluca Fusai and Ioannis Kyriakou and Papapostolou, {Nikos C.} and Pouliasis, {Panos K.}",

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doi = "10.1016/j.tourman.2019.104011",

language = "English",

volume = "77",

journal = "Tourism Management",

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TY - JOUR

T1 - Risk management of climate impact for tourism operators

T2 - An empirical analysis on ski resorts

AU - Ballotta, Laura

AU - Fusai, Gianluca

AU - Kyriakou, Ioannis

AU - Papapostolou, Nikos C.

AU - Pouliasis, Panos K.

PY - 2020/4

Y1 - 2020/4

N2 - The aim of this paper is to analyze the performance of hedging strategies based on snow and temperature options developed by ski operators to protect their profitability under adverse changes in climatic conditions. The setup is based on a joint non-parametric model for snow and temperature aimed at providing a modelling support for the assessment of the impact of these weather variables on the number of visitors at the ski resort. The analysis is carried out considering the case of Austrian Alps, and examines: i) the ability of the proposed approach to provide a realistic representation of the true data-generating process; ii) the variability reduction in the Profit and Loss of the ski operator offered by the suggested strategies; and iii) the tradeoff between the budget earmarked for hedging and profitability protection.

AB - The aim of this paper is to analyze the performance of hedging strategies based on snow and temperature options developed by ski operators to protect their profitability under adverse changes in climatic conditions. The setup is based on a joint non-parametric model for snow and temperature aimed at providing a modelling support for the assessment of the impact of these weather variables on the number of visitors at the ski resort. The analysis is carried out considering the case of Austrian Alps, and examines: i) the ability of the proposed approach to provide a realistic representation of the true data-generating process; ii) the variability reduction in the Profit and Loss of the ski operator offered by the suggested strategies; and iii) the tradeoff between the budget earmarked for hedging and profitability protection.

KW - Block bootstrap

KW - Climate change

KW - Options

KW - Profitability

KW - Risk management

KW - Ski tourism

KW - Weather variables

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DO - 10.1016/j.tourman.2019.104011

M3 - Article

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VL - 77

JO - Tourism Management

JF - Tourism Management

M1 - 104011

ER -

Risk management of climate impact for tourism operators: An empirical analysis on ski resorts

Abstract

Keywords

UN SDGs

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