The Gulf Coast After the Spill

It's been six months since BP's Deepwater Horizon well exploded in the Gulf of Mexico, causing the largest offshore spill in U.S. history, and more than two months since the leak was capped. By mid-September, all remnants of surface oil slicks, which at one point covered 2,500 square miles of the Gulf, were gone; fishing, an industry that netted $4 billion in 2008, had been declared safe by the federal government in nearly the entire region; and beaches affected by the spill were open and declared safe by their respective state health departments.

Coupled with a $70 million emergency tourism marketing grant BP gave this summer to the four states affected by the spill -- Alabama, Florida, Louisiana and Mississippi -- the Gulf Coast tourism industry is positioned for a comeback.

But are these positive signs enough to make the public forget the televised images of oil-coated birds, out-of-work fisherman and eerily deserted beaches, and lure visitors back to the region?

A U.S. Travel Association study (bit.ly/aspmC0) projects tourism losses in the area could reach a staggering $22.7 billion. The report, conducted by Oxford Economics, considered how the spill had already impacted the behavior of tourists and visitors; it also assessed the duration and magnitude of the disaster on the Gulf's image and travel prospects in a comparison with similar data from earlier disasters, such as the 1989 Exxon Valdez oil spill and Hurricane Katrina.

Among the keys to tourism recovery, according to the study, will be to alter travelers' perceptions. As Richard Forester, executive director of the Mississippi Gulf Coast Convention & Visitors Bureau, says, "The single greatest problem we have is perception; we had oil on the beach once, and we got calls from people who wanted to know if they had to wear gas masks or if the finish on their cars would be safe."

However outsiders view the oil spill,  "This has been a different type of crisis; it's affected each of the four states in different ways," says Chris Thompson, president and CEO of Visit Florida, that state's official tourism marketing body. Following is a look at the challenges the spill presents to the affected states, and how they've responded to date.

Alabama:
Picking up the pieces The beach resorts of Gulf Shores/Orange Beach in Baldwin County, Ala., took the brunt of the spill. In 2009, the area, which accounts for 25 percent of the state's tourism revenues, had 4.6 million visitors who spent $2.3 billion and sustained 40,000 tourism-related jobs. Beginning May 1, less than two weeks after the Deepwater Horizon well exploded, group cancellations started rolling into the Alabama Gulf Shores Convention & Visitors Bureau. By Aug. 6, a total of 37 meetings and events -- representing 2,300 group room nights, an estimated $410,000 in room revenues and $460,000 in additional spending -- were lost.

And it wasn't just meetings that were affected; lodging revenue was down 53 percent in July from 2009 figures, according to Beth Gendler, the Gulf Shores CVB's director of sales. Based on the bureau's projections through 2012, the destination stands to lose some 9,400 group room nights.

To quickly counteract tourism losses, the CVB used funds from the initial BP Gulf grant for tools to help planners boost attendance, including electronic postcards and giveaways for free stays. The bureau also launched daily video beach updates and information about attractions in the region.

In Mobile, a spokesperson for the Alabama Tourism Department says the city was a command center for BP clean-up operations, so "hotels were booked, but not with tourists." What did suffer losses, she says, were tourist attractions like the Mobile Mardi Gras Museum.

Florida:
Facing statewide losses "With 825 miles of beach and 1,260 miles of coast, we had the most at stake," says Visit Florida's Chris Thompson. "Even the experts couldn't know what the impact would be when the leak started. We saw models that showed the current bringing the spill around the peninsula -- it could have affected our entire coast."

While that didn't come to pass, the spill did reach seven northwest coastal counties in the Florida Panhandle. "We didn't have the first oil impact until June 4," Thompson says. "Immediately, we had challenges with tourist cancellations. And then the phones stopped ringing altogether."

For the month of July, hotel tax revenues in key Panhandle destinations were down: Panama City Beach had a drop of 15 percent from July 2009 numbers; Fort Walton Beach's numbers were down 20 percent, and Ocaloosa's and Pensacola's were off 30 percent.

Thompson says there are no statewide figures yet to determine the loss of tourism (or meetings) dollars due to the spill, but, he adds, "Tourism is a $60 billion industry in Florida; even 1 percent down is a loss of $6 million." He also notes that in polls the state conducted after the spill, 4 to 6 percent of travelers canceled plans to vacation in the state in July and August, mainly due to the spill.

In describing how Florida will move forward from the crisis, Thompson says, "Our goal now is to gain back the market share we've lost by correcting misperceptions and influencing intent to travel."

Among steps Visit Florida has taken is to create a real-time website at visitflorida.com; locals and visitors are encouraged to upload photos to help counter false impressions. The site also offers beach advisories, daily fishing reports, an interactive map with links to live web cams around the state and more.

On a more local level, Dan Rowe, president and CEO of the Panama City Beach Convention & Visitors Bureau, says one way he plans to move forward is to diversify the destination's tourism economy. "We are focusing on golf for the first time, and not just beaches." He adds that the area will attempt to capitalize on the opening of Northwest Florida Beaches Airport with daily nonstop service from six gateway cities, which will boost the lure for corporate meetings and incentives.

Fighting the Perception Battle

Last month, M&C spoke with Jim Hutchinson, assistant secretary of the Louisiana Office of Tourism, shortly after the five-year anniversary of Hurricane Katrina. Following are his thoughts on the state's most recent disaster.

• How was the state affected by the spill?
Louisiana has more than 7,000 miles of tidal coastline. The oil only reached about 400 miles of coastline, so a relativity small area in the southeast region has been directly affected by the oil spill.

Rather than beaches, our shores mostly consist of picturesque wetlands and swamps. Though most of these areas were unaffected by the spill, we recognize there were some isolated portions of the southeast coast that have been directly affected.

Travelers can put their minds at ease knowing that we are open for business. Our outdoors are ready to be enjoyed, from swamp tours and bike trails to bird-watching and fishing. In fact, 100 percent of Louisiana's coast is now open to fishing.

• What was the most damaging aspect of the oil spill for the state?
Most damaging is that the spill has created a number of false perceptions. Tourism is a perception-driven industry, and perception is key to decisions about where people choose to hold conventions and meetings. Lingering fear and misinformation kept travelers away for years in the aftermath of Hurricane Katrina. We don't want that to happen again.

• What about perceptions of the safety of eating Gulf seafood?
The misperception surrounding seafood it is a significant threat to our tourism industry. More than 27,000 tests have been conducted on our seafood, and each one has shown it to be safe. Currently, Gulf seafood is the most heavily scrutinized and tested food available.

• How much of the state's revenue typically is derived from tourism, and how much has the spill cost that sector?
Each year, the state hosts 24.1 million visitors who create a $9.4 billion tourism industry. Louisiana generates $864 million in tax revenues and directly or indirectly employs 200,000 Louisianians. Our most current research shows that 29 percent of visitors nationally have canceled or postponed trips to Louisiana because of the oil spill. The effects may be worse, because it is difficult to calculate missed opportunity.

• What efforts to recoup business has the state launched so far?
We have launched an advertising campaign in key drive-in markets. We have brought journalists down to experience our incredible food, music and scenery. We have overhauled elements of our website, LouisianaTravel.com, to provide a one-stop shop to journalists covering the issue, and we created an update page to keep potential visitors aware of the recovery conditions across the state.

We also have implemented social media campaigns, and we are developing an online site called MyReports that will collect user-generated videos and photographs to quickly illustrate Louisiana's recovery.

Louisiana:
Surviving another disaster Unlike the other three affected Gulf states, Louisiana's coast does not feature white, sandy beaches. The areas affected by the spill are on the state's far southeastern coast, encompassing 400 miles of mostly marshland. The most high-profile damage here was to the wildlife, as news reports presented hard-to-watch views of pelicans and other coastal birds covered by oil, as well as to the fishing and seafood industries.

As it turns out, the damage to wildlife isn't as bad as feared; the Audubon Louisiana Coastal Initiative estimates the total number of bird casualties will be in the thousands, but that is a small fraction of the 250,000 birds estimated to have perished from the Exxon Valdez spill. Fishing has resumed and seafood, at press time, continues to pass federal safety tests. Yet the battle to convince visitors that all is well is just beginning.

"People come here for the music, the culture and food. We need to overcome how they look at our seafood; right now, it goes through five stages of testing -- more than seafood imported from overseas," notes Marion Fox, executive director of Jefferson Davis Parish.

Adding to Louisiana's woes is the perception that the state, which was the closest geographically to the Deepwater Well, was ground zero for the disaster.

"Every time you turned on TV for 100 days, you would see nothing but the story of oil in the Gulf, with all the reporting done from our state," says Jim Hutchinson, assistant secretary at the Louisiana Office of Tourism. "It soon became not the Gulf oil spill, but the Louisiana oil spill."

To determine the scope of the damage to tourism and other businesses, the state has conducted several studies. According to the most recent survey, 29 percent of would-be visitors canceled or postponed a trip to all of Louisiana, not just the Gulf,  because of the spill.

As for meetings, Hutchinson says he has not heard to date of any sizeable cancellations, but he stresses that the state's meetings industry still is on the rebound from Katrina, which struck in late August 2005. "Our convention business in New Orleans is still not what it should be," he says, noting that post-Katrina, some 4.6 million cumulative room nights were canceled, extending to 2025. (For Hutchinson's and the state's efforts to bring back visitors, see "Fighting the Perception Battle", left)

Mississippi:
Getting the word out While the Mississippi Gulf Coast has just 26 miles of beaches, and they were indeed affected by the oil spill, "they are not the region's main attraction," according to Rip Daniels, vice president of the Harrison County Tourism Commission. The top draw for tourists and groups, he says, is the area's seafood, which, like neighboring Louisiana, suffers from a bad rap despite being found to be uncontaminated by oil.

"Seafood restaurants had problems because the perception was that the seafood wasn't safe and we had to get it from someplace else," says Richard Forester of the Mississippi Gulf Coast Convention & Visitors Bureau. But the problem, he adds, "will take care of itself if government testing continues to be positive."

Three of the state's coastal counties were impacted by the spill: Baldwin, Jackson and Harrison, which includes the city of Biloxi, a major tourism destination thanks to its casinos. According to Forester, occupancy rates are strong at the 11 gaming properties in the region, averaging 85 percent during the summer. "But the beachfront properties  had problems, as did water-based attractions, like charter fishing boats," he says.

The Mississippi Division of Tourism has used some of the BP marketing grant to create videos touting the state's Gulf Coast tourism attractions that were up and running during the summer, such as gaming and golf, and post them on the web at visitmscoast.org and on social media sites such as YouTube and Facebook.

For his part, Daniels says Harrison County has had very few cancellations of meeting and convention business (exact figures were unavailable). "But we had a tremendous drop-off in inquiries, by as much 40 percent," he notes. "This is hard to quantify. We need to compare those numbers with past inquiries that resulted in business in a banner year, in order to get a real dollar value."

Going forward The $70 million marketing grant that BP gave to the four affected states -- Florida received $25 million; the other three got $15 million each -- is nearly gone, spent mostly on marketing efforts to salvage the summer season. Plus, the grant stipulates that the remainder has to be used by year's end.

Yet, as tourism officials repeatedly stressed to M&C, the effects of this crisis will last far longer than 2010.

"We know from our research that the oil spill will have long-term effects on businesses and jobs in the Gulf Coast region unless we counteract the usual course of events with an unprecedented response," says Roger Dow, president and CEO of the U.S. Travel Association (ustravel.org).

The "unprecedented response" U.S. Travel is calling for is the creation of a new $500 million marketing program, funded by BP, to share accurate information on the oil spill and attract visitors to the region. The measure is one of the key elements of the association's Roadmap to Recovery (bit.ly/ahWnvE), a 10-point plan for government to help communities in crisis by implementing specific action steps that inform public perceptions, incentivize travel to an affected area and make impacted businesses whole.

According to Dow, the $500 million in marketing would generate $7.5 billion in tourism spending in the regions affected by the spill, which would offset about a third of projected losses. "If BP steps forward, business will come back faster," Dow says.

Among other initiatives the Roadmap to Recovery calls for is the development of a "one-stop shop" online portal where consumers can obtain up-to-the-minute information about which areas are safe and open for travel and business during a spill-like disaster. A prototype of sorts is the site Gulftravelupdate.org, launched by the U.S. Travel this past summer.

Meanwhile, Roger Dow and tourism officials from the region are working with attorney Kenneth Feinberg, administrator of the Gulf Coast Claims Facility, and members of the U.S. Congress (most notably Rep. Bobby Rush, chairman of the Energy and Commerce Committee Subcommittee on Commerce, Trade and Consumer Protection) to raise awareness of the Gulf's tourism losses. They also intend to spearhead a movement to pressure BP to consider the $500 million proposal, in addition to other tourism claims.

At press time, a spokesperson for Rush told M&C the congressman had drafted a resolution backing U.S. Travel's plan but still needed to get signatures from other congressional representatives before it could be introduced.

Not surprisingly, the most difficult aspect for government and BP to quantify is money lost due to perception. Says Dow, "Perception-related damage is damage. If it causes you to lose a customer for one Saturday night, it may cost you the rest of Saturday nights." At press time, he was still trying to set a date with BP CEO Bob Dudley for a face-to-face meeting.

The Mississippi Gulf Coast's Rip Daniels, in stating what he hopes will come from these talks, doesn't mince words: "BP is spending far more money advertising themselves, trying to rectify their image, than they are giving us to do the same. We hope they get our message."