A counterfactual analysis to measure the impact of the COVID-19 on the Economics of Tourism in the Balearic Islands

Abstract

[eng] The aim of the study is to examine the impact of the COVID-19 on the Economics of Tourism in the Balearic Islands. To do so, a counterfactual analysis was adopted, using official data from the Statistics Institute of the Balearic Islands. The analysis covers mainly the effect of the COVID-19 outbreak in two important variables for the tourism industry which are the arrivals and the expenditure and their observed effects to the unemployment and in to the evolution of the GDP of the Islands. This study develops a counterfactual framework which with this approach is possible to estimate and highlight the real impact of the COVID-19 in the economics of tourism in the Balearic Islands which was an 81% drop in the total arrivals and a loss of production through tourism expenditure of approximately 13.716 millions of euros, or in percentage terms, a drop of an 84% respect to the constructed counterfactual scenario for the 2020 season.