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Biz Q&A: Tourism industry will feel effects of gulf oil spill for years

Keith Overton, executive of TradeWinds Island Resorts and chairman of Florida’s restaurant and hotel group, walks with Gov. Charlie Crist on St. Pete Beach in June to assure potential visitors the beaches are oil free and open for business.

SCOTT KEELER | Times

Keith Overton, executive of TradeWinds Island Resorts and chairman of Florida’s restaurant and hotel group, walks with Gov. Charlie Crist on St. Pete Beach in June to assure potential visitors the beaches are oil free and open for business.

A lot of lives were turned upside down after BP's Deepwater Horizon rig exploded, spewing oil into the gulf. Keith Overton of the TradeWinds Island Resorts in St. Pete Beach found himself in a new role: point man for Florida's $65 billion tourism industry.

As chairman of the Florida Restaurant & Lodging Association, he testified on Capitol Hill about fallout from the spill before a presidential commission investigating the disaster. He speaks regularly with Kenneth Feinberg, the attorney named by President Barack Obama to oversee payouts from the $20 billion BP victim compensation fund.

In a recent interview with the Times, Overton talked about early friction over the fund, why he's convinced the oil spill caused last summer's tourism slump and problems for the industry that linger long after BP capped the Deepwater Horizon well.

How did you get to know Feinberg?

I first met him when we were testifying before the House Subcommittee on Energy. Everything he said initially, he didn't deliver on. Like he could deliver emergency payments in seven days. He really didn't understand the complexity of our business model. But he's a good listener and did a great job learning our business.

You were still criticizing him until a couple of weeks ago, right?

He took that position on proximity — that if you didn't have oil on the beach you weren't going to get paid. When he reversed it, that turned things around. Then he'd say, "Keith, you'll get paid. Just be patient." Six to eight weeks would go by and no one got paid.

I was inundated with calls to intervene from Florida representatives in Washington who said to either get this guy out or get him moving. It took him writing checks to get belief in the industry that everything would be okay.

How's the relationship now?

It's time our industry show him a little love. It's just fair that we take the politics out of it. I talk to him on the phone two or three times a week, and we e-mail all the time. I ask him about clearly compensable claims that are denied or administratively held up. And we've got to get (a formula for) long-term settlements taken care of.

A lot of people are skeptical that the downturn in local tourism resulted from the oil spill that never came here. How do you know it wasn't caused by the sluggish economy?

Once we got past the cold winter, things were looking up. There was pent-up demand for travel and such good deals, people were ready to release it. Things were supposed to be better and turned out not being better. BP is the only factor that caused that to happen.

Did the TradeWinds get stuck with empty rooms last summer when your customers went elsewhere?

Our occupancy didn't suffer. We had to react and did it by discounting. We shifted our focus from outside of Florida. There was a much broader misunderstanding of (where oil came ashore) in the Northeast and Midwest.

We targeted nearby travelers who knew things here were okay and could take advantage of the heavy discounts — in some cases 50 percent of what we'd normally charge. But it costs the same to service all those rooms (regardless of the room rate). It squeezed our profit in the five months when we (normally) make all our money.

Are there any feeder markets where the TradeWinds is still feeling effects of the spill?

We're down 30 percent in the U.K. market. Obviously, the (exchange rate) of the euro and the (British) pound to the dollar aren't what they used to be. But BP got more bad press there than in the U.S.

British travelers book package deals and for the most part they're two-week trips. So, they get a bill that reads the pound equivalent of $7,000 and say, "Am I going to risk that to go there?"

Will domestic travelers think twice about vacationing in Florida in the future?

One underlying thing people need to recognize is Florida has a brand that's the most powerful in all tourism: sunshine, beautiful beaches, blue water and seafood. That brand has been damaged, and the impacts will last many years.

Steve Huettel can be reached at huettel@sptimes.com or (727) 893-8128.

Biz Q&A: Tourism industry will feel effects of gulf oil spill for years 01/09/11 [Last modified: Monday, January 10, 2011 7:11am]
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