Tourism and COVID-19: Regional Economic Impacts of Cancelling Carnival Celebrations in Brazil

Abstract

This paper estimates the economic impacts of no Carnival in Brazil in 2021. Its contribution is twofold: it explores the interplay between COVID-19 and event tourism in Brazil from a crisis management perspective and quantifies the magnitude of the effects using the input-output approach. Results show that the cancellation of Carnival for sanitary purposes led to economic losses for the hosting states, given the drop in the number of tourists, the loss of R$650 million in tax, and the loss of 200 thousand employment opportunities. Furthermore, tourism activities were directly affected and incurred the largest impacts, especially the “Accommodation and food services” sector. Among the hosting states, Pernambuco experienced the greatest negative economic impacts, highlighting the importance of Carnival for its local economy.