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Oil spill could cost gulf states $23 billion in lost tourism and travel spending

Cleanup crews work July 11 on Pensacola Beach. Travels surveys confirm that potential visitors are avoiding gulf beaches after the oil spill. 

Associated Press

Cleanup crews work July 11 on Pensacola Beach. Travels surveys confirm that potential visitors are avoiding gulf beaches after the oil spill. 

BP's massive oil spill could cost Gulf Coast states nearly $23 billion in travel and tourism spending over the next three years, with Florida taking the biggest hit, according to a study released Thursday by a travel industry trade group.

The U.S. Travel Association also called for a $500 million marketing campaign, funded by BP, to promote unsoiled gulf beaches as attractive destinations and protect the region's 400,000 travel-related jobs.

"The long-term impact of BP's oil spill is a largely predictable event and can be mitigated," said Roger Dow, the association's CEO. "Now is the time to shorten what could be a huge financial disaster over the long term."

Oxford Economics USA studied travel fallout from 25 major disasters worldwide, including Hurricane Katrina, the Exxon Valdez oil spill in Alaska and acts of terrorism. Visits for vacations and business dropped sharply for an average of 17 months.

The steady drumbeat of bad news since the Deepwater Horizon rig exploded in April soured potential travelers on the Gulf Coast, said Adam Sacks, managing director of Oxford Economics.

A survey by the huge online travel agency TripAdvisor.com found once-popular beach destinations dropped off the radar for people planning a vacation. In July, travelers interested in Pensacola fell 52 percent. Destin dropped 48 percent and Gulf Shores, Ala., plummeted 65 percent.

"History and current trends indicate a potential $22.7 billion economic loss to the travel economies of the Gulf Coast states over the next three years," Sacks said.

In that worst-case scenario, Florida would lose by far the most travel and tourism dollars of any state in that period: $18.6 billion. That would represent a 27 percent decline in the first year for the state's $60 billion-plus tourism industry.

Estimating the cost of an ongoing disaster is tricky business, said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

He ran two sets of numbers: a $2 billion annual loss if visitor spending dropped 10 percent and a $10.9 billion decline at 50 percent. "A year is as far as I'm willing to speculate," he said. "One thing I do know: It won't be a positive."

Echoing Tampa Bay area tourism officials, Dow blamed the perception that "multiple miles" of beaches are covered with oil. "The real wild card is the leisure traveler who can avoid the entire region if there's the slightest risk of oil," he said. "That's the biggest unknown."

To fight back, U.S. Travel is pushing a 10-point "Roadmap to Recovery." Its centerpiece would be the $500 million campaign of advertising and an online portal to give potential visitors up-to-the-minute information on places that are open and safe.

BP gave Florida $25 million in May to promote tourism. Pinellas received $1.15 million of it to bolster summer advertising in the Tampa Bay area and Central Florida. The oil giant rebuffed a followup request by Gov. Charlie Crist for $50 million more.

A BP representative wasn't aware of the U.S. Travel plan but told MarketWatch.com the company "would reserve judgment until we've actually received a request and had time to consider it."

Steve Huettel can be reached at [email protected] or (813) 226-3384.

$22.7 billion

Potential loss, over three years, in

travel and tourism spending for Gulf Coast states due to the oil spill

$18.6 billion

Potential loss, in those three years, for

Florida, a 27 percent decline in the state's $60 billion-plus tourism industry

$500 million

Amount sought by the U.S. Travel

Association from BP to finance a marketing campaign to promote clean beaches

Oil spill could cost gulf states $23 billion in lost tourism and travel spending 07/22/10 [Last modified: Thursday, July 22, 2010 10:41pm]
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