Friday, July 23, 2010

Orlando Sentinel: Florida may lose billions in tourism from oil spill

Florida may lose billions in tourism from oil spill
Travel industry makes case for $500 million emergency oil-spill fund

By Sara. K. Clarke, Orlando Sentinel

8:27 PM EDT, July 22, 2010

The nation's biggest travel trade group said Thursday the BP PLC oil spill will cost the Gulf region's tourism industry between $7.6 billion and $22.7 billion, with most of the economic damage falling on Florida's shoulders.

The U.S. Travel Association, in releasing a study it commissioned from Oxford Economics, asked for the federal government's help in securing $500 million for an "emergency" marketing campaign from BP, the British oil company whose blownout well is the source of the giant spill.

The industry trade group said the disaster, triggered by an explosion aboard the Deepwater Horizon drilling rig in April, could cost coastal-tourism interests and those that do business with them as little as $7.6 billion over 15 months or as much as $22.7 billion over three years.

Both sets of figures are based on historical data drawn from 25 natural and manmade disasters as well as National Oceanic and Atmospheric Administration forecasts on where the oil may eventually wind up. The upper-range figure assumes the oil will find its way around the Florida Peninsula to the Atlantic coast as well.

"In the wake of any disaster, facts often take a back seat to fears and to rumors," Roger Dow, president and chief executive officer of the travel association, said in calling for additional marketing and advertising. "The result is people moving elsewhere and canceling plans."

In the worst-case scenario, Florida's $60-billion-a-year tourism economy would sustain more than three-fourths of the region's financial losses, or $18.6 billion over the three years, according to the Oxford Economics study.

The study looked at previous disasters that have harmed tourism, such as Hurricane Katrina in 2005, the recent H1N1 outbreaks that tainted the industry in Mexico, the Asian tsunami in 2004, and other oil spills such as the Exxon Valdez in 1989 and the Ixtoc spill near the Yucatan peninsula in 1979.

The travel group, as part of a 10-point plan it calls "Roadmap to Recovery," hopes to convince the federal government and BP that spending $500 million now on an oil-response marketing fund could generate $7.5 billion in tourism spending that would offset the group's projected losses.

"It is more cost effective than dealing with the damages after the fact," said Adam Sacks, managing director of Oxford Economics USA.

In addition to marketing dollars from BP, the tourism industry is asking the government for help getting businesses access to loans and tax incentives that could help them remain open and for incentives that would promote travel to disaster-affected areas.

According to the study, tourism supports 400,000 jobs in the Gulf Coast region, where leisure-and-hospitality employment in counties along the shore accounts for 15 percent of all private-sector jobs, compared with 12 percent for the nation overall.

Even areas along the Gulf coast that have not received any oil from the spill are suffering economically, the study noted. For example, data from the tourism website shows that the share of searches for information about destinations such as Fort Myers Beach, which is still oil-free and, so far, nowhere near the spill, have fallen by almost 30 percent compared with a year ago.

Interest in areas where tar balls and matted crude have reached the beaches, such Pensacola and Destin, has fallen more sharply, by about 50 percent, according to TripAdvisor.

"The declines are clearly substantial," said Sacks. "It's really a dramatic effect on perceptions as well as current behavior."

BP gave the state of Florida $25 million in advertising money shortly after the spill to mount a quick-turnaround marketing campaign. But in recent weeks the oil company has given a chilly reception to overtures for more help. When Gov. Charlie Crist asked for another $50 million in late June, BP declined the request.

Raising the request for more tourism-marketing aid to a regional and a national level should reinforce the importance of the need, said Chris Thompson, president and chief executive officer of Visit Florida, the state's quasi-private tourism-marketing agency.

"We have the most at stake, and that's well recognized," he said.

Dow and others are expected to testify about the spill's effects on U.S. tourism before the House Energy and Commerce Committee in coming weeks.

He said the trade group hopes a multi-state request for financial help, backed by data, will be successful.

"I think it was disappointing that the governor's request was denied," Dow said. "We're just confident that, if we can build this request with the metrics, it's going to be very hard to deny the damages."

Sara K. Clarke can be reached at or 407-420-5664.

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