Resiliency of the Coastal Recreational For-Hire Fishing Industry to Natural Disasters

Abstract

The financial condition of US Gulf of Mexico recreational-for-hire (RFH) fishing firms post-hurricane damage was examined within the context of the industry’s contribution to the resiliency of coastal socio-ecological systems (SES). Three key financial ratios—return-on-assets, assets turnover ratio, and debt-to-assets ratio—were calculated for 2009 from balance sheets and cash flow statements constructed from surveys of 247 RFH firms operating in the five Gulf states. The ratios were then recalculated using reported damage and operational losses from at least one named storm in the 2004–2008 period and combined with the results of a logistic regression model of profitability loss to assess the resiliency of the RFH industry. Results suggest that RFH firm resiliency was a function of operating class (head, charter, and guide boats), homeport, and the way in which the business was structured. Firms appeared to be the most resilient when they employed smaller vessels in intensively managed operations, perhaps due to their ability to move a vessel out of the path of storms and because their profitability and efficiency advantages allowed for self-insurance against losses. As a result, community contributions to, and benefits from, resiliency in the RFH industry may hinge on the development of more modern port facilities and well-functioning insurance markets.