Perdido Chamber Initiatives Having Positive Impact on the Impact
This is a reprint of the Executive Summary of the report to the U.S. Travel Asssociation that was provided by Oxford Economics, a consulting firm from the U.K. Of particular note for Perdido Key is the last graphic that shows the economic impact durations, in months, to return to "normalcy". This report was prepared back in July 2010 but the Chamber's public relations campaigns, the gift card promotion this fall and the special events calendar have all combined to mitigate the damage. In November 2010 the picture is bright for Perdido Key as snow birds return, a robust condo market flourishes and preparations are made for a strong tourist economy in 2011. See the report for what might be expected without these extraordinary efforts.
Travel and tourism is critical to the economies of Gulf Coast states, responsible for $34 billion in direct traveler-generated spending along coastal communities’ Congressional districts in Alabama, Florida, Louisiana, Mississippi and Texas.
An independent analysis conducted by Oxford Economics measured the current and potential damage to the travel and tourism industry in the Gulf Coast region over a likely prolonged period of impact resulting from the Deepwater Horizon Oil Spill.
In its study, the global research firm monitored a range of indicators detailing how the disaster is already affecting traveler behavior and assessed the potential longer term impacts by examining 25 previous historic crises in the U.S. and abroad.
“Business as Usual” Not Expected for Two to Three Years
- The potential impact of the oil spill disaster in the Gulf of Mexico could adversely affect tourism arrivals in coastal communities for up to three years (36 months) at a cost of $22.7 billion in lost revenues. At minimum, Oxford estimates Gulf region travel would be impacted for 15 months at a cost of $7.6 billion in unrealized revenues, though it is expected that this event will trend to the higher end of impact estimates.
- The high profile of the spill has led to incredibly widespread economic impacts. Although the losses have been concentrated where oil has come ashore, visitors have shifted away from the entire region in significant numbers, creating a striking effect on travel to the Gulf region.
- Current indicators show double-digit declines in plans to travel to the region. A series of surveys, along with greatly reduced searches on the travel website TripAdvisor®, reveals that the oil spill has already affected perceptions and intentions to travel to affected areas.
- Expected losses fall heavily on Florida due to the larger area at risk on both the Gulf and Atlantic Coasts; however, coastal areas of Louisiana, Mississippi and Alabama are more directly exposed to the disaster and the proportional effects are projected to be larger. The impacts on Texas are minimal.
The Cost of Returning to “Normal” Travel
- The industry calls for a $500 million emergency marketing fund to counter misperceptions and encourage travel to the affected region. Oxford estimates this would generate $7.5 billion in tourism spending based on a return-on-investment of 15:1 (which is conservative in light of a documented ROI of 20:1 for post-SARS campaigns in 2004).
Perceptions Matter More Than Reality
- Available research affirms that travel intentions are down significantly for the Gulf, misperceptions abound regarding which areas are affected and that travelers believe the impacts of the oil spill disaster will be felt for a long time.
- A review of disasters affecting tourism destinations reveals that the impact endures beyond the resolution of the crisis itself, due to brand damage and ongoing traveler misperceptions.
Case Studies: Examining 25 Past Disasters Worldwide
There is a clear, but not linear, relationship between the length of the disruption and the overall scale of impact on tourism. In its review of a variety of previous events worldwide – including oil spills, hurricanes, pandemics and terrorism attacks – the combined average length for a return to baseline visitor spending following crises ranged from nine to 26 months. The range of initial impacts does differ somewhat across previous crises, and perceptions also affect the peak impact likely to be felt in 2010 in this case.




