Impact of Climate Change on the Direct Economic Costs of Coastal Hazards to Hospitality: a Meter-Scale Experiment in the Adriatic Basin

Sea-level rise and intensifying storm surges pose escalating threats to coastal hospitality sectors, yet quantification of the impact of climate change on the direct economic costs remains limited by the too low resolution of the available climate projections. This study systematically assesses storm surge-related economic damages to the hospitality sector in the Adriatic Basin, with a focus on the Veneto and Emilia-Romagna regions in Italy, using high-resolution outputs from the Adriatic Sea and Coast (AdriSC) climate modeling suite. The analysis utilizes two 31-year AdriSC simulations (1987-2017 evaluation and 2070-2100 RCP 8.5 scenario), which provide unprecedented meter-scale spatial resolution along the Adriatic coastline, enabling detailed assessment of local-scale inundation patterns.

The economic assessment methodology integrates multiple analytical frameworks: digital terrain modelling for topographic precision, machine learning techniques for hospitality sector asset classification, and depth-damage functions calibrated specifically to land-use classifications within the tourism infrastructure. By processing AdriSC's high-resolution inundation projections through a monetized grid-cell framework, this study identifies critical vulnerability hotspots within hospitality clusters while accounting for complex coastal geomorphology. The analysis examines direct damages to hotels, restaurants, and recreational facilities, quantifying potential losses through a damage model that incorporates both flood height and economic exposure.

Results demonstrate significant spatial heterogeneity in economic vulnerability, with certain understudied regions showing greater exposure to storm surge hazards than previously documented areas. Under the RCP 8.5 scenario, projected damages indicate substantial direct economic losses, particularly in high-density tourism zones where the interaction between coastal morphology and infrastructure density amplifies potential impacts. The study reveals that when sea level rise is incorporated into the assessment, the occurrences of moderate to extreme events increase by orders of magnitude.

This research establishes a replicable framework for translating high-resolution climate model outputs into actionable economic damage assessments, while introducing innovative methodologies for asset valuation and vulnerability assessment in the hospitality sector. The findings provide quantitative evidence to support targeted adaptation strategies for protecting vital coastal hospitality infrastructure, particularly in regions where complex coastline geometries influence local surge dynamics. Furthermore, the methodology demonstrates the value of integrating advanced climate modelling with systematic economic analysis to enhance understanding of sectoral climate risks and support evidence-based policy decisions.