The Lasting Financial Impact of Hurricanes Harvey and Irma — and How We Recover

30. October 2017.

Across the country, Americans have felt the weight of devastation brought on by Hurricanes Harvey and Irma. The two record-setting hurricanes’ impact on Texas and Florida has far surpassed pre-storm estimates, as damages caused by the storm continue to grow in billions of dollars. Analyst firm IHS Markit estimated that the damage from Hurricane Harvey will total somewhere between $60 billion to $100 billion, and Hurricane Irma about $30 billion. The firm estimates that the hit to third-quarter GDP growth from these two storms will be about 1.2%, but recovery and rebuilding will boost growth in subsequent quarters.

On a local level, consumer spending prior, during, and immediately following the storm was significantly impacted in the affected and surrounding areas. An analysis of transaction data from more than 100,000 brick-and-mortar and eCommerce merchants in Texas and Florida conducted by First Data revealed the hurricanes’ overall impact to consumer spending.

The data shows that consumer spending in both impacted regions followed a similar trend. In the week leading up to the storms, spending on key items like gasoline and groceries increased, but as soon as the storms made landfall, consumer spending fell dramatically. The analysis also illustrated that the hurricanes similarly impacted both brick-and-mortar and eCommerce retail—spending in the weeks leading up to storms, increased for essentials, supplies, and in some cases, hotels, and significantly dropped during the storms. These findings are incredibly valuable for merchants, financial institutions, and government agencies as they measure the ultimate impact of the storms and better prepare for future disasters.

Spending Plummets: Brick-and-Mortar, eCommerce Retail

Once the hurricanes touched down, whole areas lost power and experienced massive flooding, causing many businesses unable to conduct business as usual. The retail industry, in particular, did not fare well as sales took a large hit due to the hurricanes.

For Hurricane Harvey, First Data found that retail spending plummeted 58.7% week-over-week (43.7% year-over-year) in Houston and its surrounding areas at the peak of the hurricane. Ecommerce spending specifically dropped an incredible 41.4% during this timeframe. Post-storm, Houston eCommerce sales continued to drag while national eCommerce sales rebounded.

The pattern was similar for Hurricane Irma. Across the state of Florida, spending dropped 55.7% week-over-week (or 39.1% year-over-year) at the apex of the hurricane. In Miami specifically, eCommerce activity started dropping the week before Irma, declining significantly by 39.3% during the week of the hurricane.

Spending Upticks: Essentials, Supplies and Hotels

While retail spending declined during the storms, other industries saw increases in spending as people began preparing in the week prior to the storms’ landfall. For both regions, consumer spending on essentials such as food and gas skyrocketed in the week leading up to the storms. In the Miami area during the week of September 1, 2017, building materials were up about 66.4% from the same week in 2016, and up 55% from the previous week. Gas stations in the area saw similar results, achieving about 63.2% growth compared to last year, and about 50.8% growth from the week prior.

In the Houston area, spending at gas stations and grocery stores also spiked ahead of Harvey (between August 18, 2017 and August 24, 2017), with a year-over-year spending increase of 14.6% at grocery stores and 13.4% at gas stations.

Throughout Houston, there was an uptick of hotel sales starting August 31, 2017, as consumers rushed to book hotel rooms once the storm began causing damage to their homes. As a result, average ticket sizes for hotels were as high as $367 and on average about $50 more than they were pre-storm.

Spending on hotels across Florida also increased, but much of the increase was observed during the week leading up to the storm, as residents looked to evacuate. Spending on hotel stays during the week leading up to Irma increased in Tallahassee (49.2%), Jacksonville (48.7%) and Destin (34.3%) compared to the previous year. The data also provided insight into the path of evacuees across Florida. In the week leading up to Hurricane Irma, Orlando saw a 6.4% spending increase in Miami-based credit and debit cards. Cardholders from Tampa were more dispersed across Florida, with the number one destination being Tallahassee.

Next Steps for Affected Regions: Getting Back to Business

While the situations in Texas and Florida seem overwhelming, cities in general are working toward recovery. Local businesses can start by employing the use of mobile technology, like portable mobile card readers, as they work to resume normal operations. With this technology, businesses impacted by the hurricanes can accept secure payments anywhere—whether that is a temporary shop or their permanent location—allowing them to re-open their doors and provide goods and services as usual. With the help of temporary solutions, in addition to new construction, businesses can begin to see the light at the end of the tunnel.


In Texas, the analysis spanned between August 13, 2017 and September 4, 2017. Hurricane Harvey made landfall starting August 25, 2017 and the storm lasted until August 27, 2017. In Florida, the analysis spanned between August 25, 2017 and September 18, 2017. Hurricane Irma made landfall from September 8, 2017 to September 10, 2017.

About the Author

Rishi Chhabra is Vice President of Information and Analytics Solutions at First Data. In this role, he is responsible for building, commercializing & launching the next era of Big-Data and data-driven solutions powering multi-channel commerce and customer engagement for Merchants, Retailers, Financial Institutions and third party institutions. Rishi joined First Data in January 2013.

Rishi has spent over twelve years in the financial institutions and payments industry building analytical solutions to optimize the use of payments data and enable cross channel commerce at multiple pioneering and leading companies. Prior to joining First Data, Rishi was Group Manager at PayPal, a leading payments technology company with availability in more than 150 countries. In this role, Rishi was responsible for making use of advanced business analytics to help promote the right set of marketing offers during a customer’s interaction with PayPal. Prior to that role, he was the Director of Small Business Analytics and Consulting at Visa Inc., a leading global payments network. He has more than 10 years of experience in analytics and software applications and has helped support several multi-million dollar product businesses over his career.

Rishi Chhabra holds a Masters in Industrial Engineering with minor in Finance from The Ohio State University, and Bachelors in Mechanical Engineering from University of Mumbai.

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