Bermuda׳s balancing act: The economic dependence of cruise and air tourism on healthy coral reefs

• Coral reefs provide the most important attraction for visitors to Bermuda.
• Accommodating mega cruise ships in Bermuda is likely to reduce the economic value of the tourism industry on the island.
• Tourist that assign high importance to coral reefs prefer a mandatory system to collect user fees.

Although Bermuda has to date managed to achieve equilibrium between tourism and coral reef conservation, this delicate balance may be threatened by the growth and changing face of the tourism industry. This may result in negative impacts on the coral reefs and services provided by this valuable ecosystem. The reef-associated value to Bermuda׳s tourism industry was determined, distinguishing between the added value of cruise and air tourism. Economic valuation techniques used were the travel cost method, the net factor income method, and the contingent valuation method. Results show that coral reef value to tourism in Bermuda provides an average annual benefit of US$406 million. Although, cruise ship tourism has been responsible for more than half of the total number of visitors in Bermuda, cruise ship tourist expenditures directly benefiting the island׳s economy amount to only 9% of air passenger expenditures. Moreover, the producer surplus for air visitors is twofold that of cruise ship passengers. Despite this low added value of cruise ship tourism in Bermuda, there is a strong drive to accommodate the ever-larger ships built by the cruise industry. Several options have been proposed for the upgrading and re-aligning of existing shipping channels to enable safe and smooth passage; these may lead to environmental impacts, which may in turn affect reef-associated tourism revenue to the island. This study recommends the integration of Bermuda׳s coral reef value into Cost Benefit Analyses of proposed channel upgrades compared to the “business as usual” scenario.