BP Oil Spill Estimated to Cost Gulf Travel Industry $22.7 Billion

The Gulf oil spill was a disaster—for the environment, fishermen, oil workers, the economy and tourism, and its effects continue.

A report, “Potential Impact of the Gulf Oil Spill on Tourism,” conducted by Oxford Economics for the US Travel Association, projects that the effects of the BP oil spill on travel to the Gulf Coast will last up to three years and cost the region $22.7 billion.

The coastal region’s 400,000 travel industry jobs will be profoundly impacted.

“Travel is a perception business and the impact of disasters like the BP oil spill on the industry is actually predictable,” said Roger Dow, CEO of the US Travel Association. “We know from this 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.”

Several research studies back up his position.

TripAdvisor page views for the effected—and even threatened—Gulf Coast areas have shown steep declines for the three months since the oil spill.

In a survey of US households conducted in June, regarding travel intentions and changes, TNS found 10% of travelers to the Gulf region had changed their plans due to the oil spill, 22% decided not to go for “unspecified reasons” and only 68% planned to maintain their Gulf travel plans.

The “Oil Spill Survey Research Report,” released on June 30, 2010, and conducted by Market Dynamics Research Group (MDRG) for the Louisiana Office of Tourism, polled travelers who planned to visit the state prior to the oil spill and found that though 83% were still coming as scheduled, 17% had canceled or postponed their trips.

In addition, the survey showed that nearly two-thirds of potential travelers to the region felt the oil-spill disaster was worse (42.7 percent) or just as bad (19.5 percent) as the devastation caused to Louisiana by Hurricanes Katrina and Rita.

Perhaps most worrisome, the study found that negative views on travel to Louisiana were likely to last—with nearly 80% of national respondents believing the disaster would impact the state for at least two years.

Perceptions are critical to the recovery of tourism revenues in the Gulf region. As the Oxford report states: “In many instances, the impact of misperceptions on travel and tourism is greater than the effects of reactions to the real disaster.”

Data from surveys and TripAdvisor show that many vacationers are already avoiding the entire region, partly due to lack of information.

“One of the most cost-effective ways to mitigate these damages is to immediately fund strategic marketing to counter misperceptions and encourage travel to the region,” said Adam Sacks, managing director of Oxford, in a release.

The US Travel Association recommends a $500 million marketing effort to attract visitors to the Gulf Coast, and estimates the program would reduce the adverse economic impact to the region by $7.5 billion.

to see the costal areas that will most likely be directly impacted by the oil spill, see the Green Image of the Day: 7/6/10.