Measuring Impact and Recovery of California Wildfires

The impact of wildfires simply cannot be understated.

According to the U.S. Forest Service, the average size of a wildfire before 2005 was under 100 acres. By 2015, it was slightly above 140 acres and by 2017, it was almost 175 acres. California suffered a record $400 billion in damages in 2018, according to Accuweather. The bill in coming years will probably be larger because the fires are getting bigger.

As the humanitarian crises become tragically more frequent and extreme, more residents, businesses, and entrepreneurs are affected due to the proximity and interconnected relationships with affected areas.

In the immediate days and weeks after the fire, the challenge is figuring out how quickly economic activity will return to the affected area, or whether options will have to be pursued with other suppliers/customers.

A study of the Woolsey forest fire in Malibu on Orbital’s GO platform showed a dive in foot-traffic in the affected area right after the Southern California blaze on Nov 8, 2018. The fire, which killed three civilians and injured three firefighters, destroyed 1,643 structures, damaged 364 others and charred 96,949 acres.

Within three months of the Woolsey wildfire, tourism activity in the affected area, however, began to recover.

By the 4th of July week, foot-traffic in the area captured by GO was back to levels seen before the blaze, indicating full recovery within seven months.

Prior to the recovery, property tracker CoreLogic estimated that the Woolsey Fire destroyed or damaged as much as $6 billion in real estate.

CoreLogic said the estimate included cost of buildings, their content and additional expenses incurred by the property owner, noting that insurers would pick up much of the tab.

Separately, Mercury Insurance, one of the insurers for Woolsey, said its own losses from the blaze came up to around $46 million.

In a blaze such as Woolsey’s, understanding the impacted area and how well it is recovering — or isn’t — is crucial to valuing the properties within. Future business plans can sometimes be reversed, depending on such valuations. For example, if all businesses in the affected area were destroyed, then having a restaurant in the location will not make sense.

Likewise, those sourcing supplies from the affected area will need to understand the downtime involved and how that will play into their own scheduled delivery of raw/intermediate materials to various auto, machinery and other industrial products makers. Often, there are multiple suppliers in most situations; so knowing how long a certain part of a supply chain will be choked-off allows for quick sourcing of alternatives.

GO’s foot-traffic data and other geospatial-driven analytics help businesses track the impact of wildfires and the recovery of the affected area(s) in real-time, enabling them to make informed decisions and intelligent engagements in the aftermath of a blaze.

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