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BP Oil Leak Avoids Florida, as Do Tourists Who Think Otherwise

Last month, Erin Duggan received an e-mail from a man in Canada who said he was “devastated” that the beaches of Sarasota, Florida, were polluted with oil and its air full of toxins.

“I had to write him back saying that I’ve been taking my newborn down to the beach every night,” said Duggan, a spokeswoman for the Sarasota Convention & Visitors Bureau. “The perception has been horrible.”

The millions of gallons of crude that have poured into the Gulf of Mexico from BP Plc’s ruptured well have largely stayed away from Florida’s beaches, including Sarasota’s. The trouble, Florida officials say, is that tourists have been staying away too, scared off by television and newspaper images of oil- tainted waters in Louisiana and elsewhere along the coast.

“The oil is hundreds and hundreds of miles away,” U.S. Representative Kathy Castor, a Florida Democrat whose district includes Tampa, said this week at a Washington hearing on the spill’s impact. “Yet the word has gone out all across the globe” that “the Florida beaches are damaged.”

Only four counties have reported crude on their beaches, said Kathy Torian, a spokeswoman from Visit Florida, the state’s official marketing arm. All of the beaches touched by the oil are in the state’s northwestern Panhandle, and represent a fraction of the Florida’s 1,260 miles of coastline.

Obamas to Visit

First Lady Michelle Obama praised the “gorgeous” beaches of Pensacola, a Panhandle city, during a visit there two weeks ago, and the president and his family plan to spend a weekend on Florida’s Gulf coast next month.

Yet in a survey last month of 1,286 “active travelers,” 10 percent said the spill made it less likely they would visit the state, according to Visit Florida.

“Within 24 to 48 hours after the Deepwater Horizon spill our call volume basically dropped to nothing,” said Gregg Nicklaus, owner of Sirata Beach Resort and Conference Center, a 382-room hotel in St. Petersburg. Revenue at the hotel fell 25 percent in May from a year earlier and was down 10 percent last month, he said in an interview.

A drop in visitors is bad news in Florida, where tourism is the No. 1 industry, generating $60 billion in annual revenue, according to Visit Florida. One out of every 19 Floridians works in tourism, and about a fifth of the state’s sales taxes come from the industry, Torian said.

Most Claims

Florida’s claims for spill damage are surpassing those from other Gulf States that have suffered more direct physical damage, BP says. Florida filed 32,762 claims through last week, topping No. 2 Louisiana by more than two thousand, said Scott Dean, a spokesman for the company.

Because of Florida’s heavier dependence on beach tourism, it will take the biggest hit in dollars from the spill, a study commissioned by the U.S. Travel Association found.

The state will lose $7.6 billion, a 13 percent decline, if the accident’s impact lasts 15 months and $18.6 billion, a drop of 14 percent, if it lingers for 36 months, according to the study by Oxford Economics, a U.K. economics firm. The percentage declines will be greater for Louisiana, Mississippi and Alabama, Oxford Economics said.

Determining how much hotels or restaurants on undamaged beaches are suffering will fall to Kenneth Feinberg, the Washington attorney tapped by BP and the Obama administration to decide on private spill claims. He will draw on a $20 billion fund from BP, starting next month.

Help From BP

“You do not need oil on the beach to have a compensable claim,” Feinberg told the House panel.

To offset some of the damage, BP gave Florida a $25 million grant for an advertising campaign to entice wary vacationers to visit. BP also sent the state $50 million in block grants to pay for spill-mitigation efforts.

In a June 30 letter to BP, Governor Charlie Crist requested an additional $50 million to promote tourism, saying that state beaches were “open for business.”

Doug Suttles, chief operating officer for exploration and production at BP America, wrote back July 12 to deny the request.

“As you say, the majority of the Florida coast remains clean and open for business,” Suttles wrote.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net.

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