Oil spill impact on Tourism through 2013

Posted on: January 24 2011
Business travel expected to pick up...

Sunday, January 23, 2011
By Ed Anderson
Capital bureau

BATON ROUGE -- Leisure tourism in the state is expected to take a $691 million hit through 2013 because of the Deepwater Horizon rig explosion in April, but some of that loss will be offset by increased business travel to Louisiana by government officials and crews working on spill cleanup, according to an analysis conducted for the state's tourism agency.

The report, finished last month, said business travel to the state will increase by about $395 million through 2013, softening the loss of a downturn in leisure tourism. The net impact of the financial loss to the state from the oil spill through 2013 will be about $295 million, according to the report by Tourism Economics, commissioned by the Department of Culture, Recreation and Tourism.

Melody Alijani, director of research and development for the department's Office of Tourism, said the state will do a follow-up study in March to measure how the nation and region perceive the state's recovery from the oil spill. The December report was in the works from April to September, she said.

Lt. Gov. Jay Dardenne is expected to announce a new "brand campaign" for the state's tourism promotion efforts at the annual statewide travel and tourism promotion summit in Baton Rouge on Wednesday.

Dardenne said the numbers in the report did not surprise him. "It means we have a challenge," he said.

Most of the increase in business tourism dollars has been pumped into the economy, Dardenne said.

"It has softened the blow," he said. "It provided cash in the affected areas (near the spill) while the crisis was ongoing. ... The issue is now dealing with the perception that is still out there that oil is still washing ashore."

The report said the spill's "effects on visitor spending are expected to persist into (the first quarter of) 2013 before returning to the baseline forecast." The baseline is what tourism officials projected for the 2010-13 period before the Gulf of Mexico disaster.

Rehabbing state's rep

"There is no question Louisiana has been impacted," Alijani said. "We have to convince people that the environment is clean and healthy. It takes a while for people to absorb that it is OK to eat shrimp" and other Louisiana seafood. Previous studies conducted by the department indicated that visitors were concerned about the quality of Louisiana seafood, and many out-of-state restaurants refused to serve it. Repeated testing has shown that seafood harvested from state waters is safe.

The report said the "descent of the media, relief workers and government officials has offset some of the lost spending from leisure travel" and will continue to do so for the near future.

The report said that although 24.7 million visitors were originally projected to visit the state this year, the oil spill lowers that estimate by about 300,000 to 400,000 visitors.

However, the 6.4 million business visitors originally projected in 2011 is now expected to approach 6.8 million, but the 18.3 million leisure tourists originally expected will probably be about 17.6 million as a result of the Deepwater Horizon disaster.

In terms of spending, the original dollar projections for tourism this year were pegged at just less than $8.70 billion: about $2.37 billion from business visitors and $6.33 billion from leisure travelers.

As a result of the spill, the tourism revenue projections for this year have been revised to about $8.55 billion, including about $2.49 billion in the business sector -- an increase of about $123 million. Leisure tourism dollars this year are expected to be about $6.06 billion, a decline of $266 million, according to the study.

Plans scrapped after spill

The report said that "hotels fared very well at the beginning of this crisis," with the number of rooms booked in the April-June period up 15 percent from the same period in 2009.

About 5 percent fewer visitors passed through the state's welcome centers and the number of visitors to state parks was also down 5 percent in the second quarter of 2010, compared with the second quarter of 2009, according the study.

Based on the impact of oil spills in other areas, from Alaska to Mexico, Alijani said the "average range of impact" on tourism is 12 to 28 months. A month after the spill, 26 percent of the visitors who planned trips to the state canceled or postponed them because of the oil spill.

In a survey taken shortly after the April disaster, potential tourists from around the country said they felt it would take the state at least two years, and possibly five years, to recover.

"Visitor perceptions initially recover slowly," the report said. "Perceptions then rapidly improve after two (years) and then slow again as time progresses."

The report said visitor volumes "should return to the baseline forecast" in the October-December period of 2012, while overall visitor spending should return to original projections by early 2013, the report said.