Does tuning reduce fuel economy?

Not on its own. Tuning inherently improves the efficiency of your engine, allowing the same setup to produce more torque. This means that you will be given the opportunity to use more fuel (more torque/power = more fuel), but daily driving/cruising situations will actually use less fuel. Your engine is able to perform the same tasks as before, with less exertion.

Do I have to run premium octane?

No you certainly do not NEED to run a higher octane on non turbo setups. Improvements can be made with 89 or even 87 octane, though they will be severely limited in comparison to premium. Higher octane will allow the ignition timing to be advanced further, which equates to more torque.

Turbo setups will require the use of premium gas to reduce the chance of knock/detonation.

Isn't premium octane gas expensive to run?

Is it more expensive than regular? Yes.

Is it as expensive as you think? Probably not.

Switching to 91 octane will cost an additional $200-$300 per year on average in the Vancouver area. (10L/100km and 10k km per year)

Is tuning my car safe?

Will I damage anything long term?

There are always risks involved in modify a vehicle. It is up to you to properly maintain your vehicle and reduce that risk as much as possible.

Factory tunes are designed to reduce emissions and to suit every vehicle coming out of the plant, and this typically leaves a very large 'safety margin'.

Tuning the engine will put potentially additional strain on your engine, which will require diligent oil changes, spark plug changes etc to keep it running 100%.

Driving habits may also need to change to reflect the increase in performance (improper shifting, lugging the engine, smooth acceleration etc).