Fears of Oil Soaked Beaches Drive Vacationers Away

Gulf coast property owners report major decline in summer rentals.

ByJohn Wetenhall and Scott Mayerowitz
June 14, 2010, 5:48 PM

June 15, 2010— -- Last summer, Joanna Elkins' phone never seemed to stop ringing with vacationers eager to stay in one of her three condos in Panama City and Okaloosa Island, Fla.

This summer, the phone has been almost silent.

"We're just not getting the calls," Elkins said.

Elkins attributes the decline to people's fears that Florida's beaches have been smeared with oil from the Deepwater Horizon oil spill in the Gulf. Panama City Beach has not been hit by the oil yet, but vacationers have already been scared away.

"Last year, I rented all three of the beachfront condos weekly," she said. "Every week, filled up completely."

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She has stopped renting two of her three condos altogether and the third property is only booked for two weeks out of the entire summer. When compared to her rental calendar from last year, Elkins described the contrast as "disturbing."

She has lowered the price of a one-week stay in her penthouse condominium from $1,500 a week to less than $900. Still, no one is calling.

Elkins and her husband face the prospect of losing tens of thousands of dollars of income if rentals don't pick up during what is normally the busiest rental period of the year.

"It's that income that carries us the rest of the year because we don't get enough in the off season," she said. "We don't know what we're going to do."

The BP oil spill is not only hurting property owners.

"It affects everybody, and it's devastating," Elkins said. "It affects people who make their money from tourism, from restaurants, the people who rent out jet skis and umbrellas."

Jack Norris, president of Mississippi's Gulf Coast Business Council, recently met with business owners from the region to try to understand the impact of the oil spill on the economy there. Oil has yet to wash ashore, but many potential visitors from outside the region have the impression that the beaches have been affected.

"While the perception of the general public outside of this region is that we have oil on our beaches, the reality is we don't right now," he said. "This perception alone is having a negative impact on our economy, particularly our tourism and seafood industries."

Even those who know that most beaches are unharmed question if that will still be the case a week or month from now, when they actually arrive for their vacation.

Travel review site TripAdvisor said that it has noticed web traffic to reviews of Gulf Coast resorts fall. The number of page views for Biloxi, Mississippi, is down 25 percent; Pensacola, Florida, 40 percent; and Fort Myers, Florida, 19 percent.

Emerald Coast RV Beach Resort, also in Panama City, said it has seen numerous cancelations because of the spill. Many vacationers are saying they just don't want to take a chance.

"Unfortunately, we are being impacted by the oil spill not because of oil on our beaches, but rather due to the impression many of our visitors have based on media coverage they are hearing," said Lyle Hartka, owner of the RV Park. "Panama City Beach still has white sugar sand beaches that are free from oil. Trying to convey that reality to potential guests is difficult when they are hearing the worst."

It's the same message over and over again from hotel owners, restaurateurs and local tourism agencies.

"It's a little scary positive," said Anne Banas, executive editor of travel Web site SmarterTravel, who notes that all of these people have a vested interest in tourists arriving regardless of the actual conditions. "A lot of the tourism offices are going to be very positive, but from the consumer perspective do your own research."

Banas advises travelers to check with state health departments, which are responsible for closing beaches, and to read local newspapers online.

In Alabama, which currently seems to be getting the brunt on the oil, the state Department of Public Health has a particularly detailed page, providing people with up-to-date information about beach closures. The Florida Department of Health has also has a special website dedicated to the response to the Deepwater Horizon spill.

Small vacation-rental owners are being hit particularly hard, Banas said.

"It's really telling that they're having trouble booking, even for the Fourth of July," she said. "A lot of people who were going to the beach along the coast are now having second thoughts."

For travelers who still pick a beach town along the Gulf of Mexico, Banas suggests investigating what museums, small towns and theme parks might be nearby, in case the beach is closed. Even ask if the hotel has a pool.

"If you're going for the sole purpose of a beach vacation, you have to at least have your ideas of the ideal beach vacation smashed a bit," she said. "It's going to be hard with kids to say: 'We're going to the beach but there might be tar balls.'"

Banas suggested that some families might even want to consider spending some time volunteering to clean up affected beaches.

"You might not be splashing in the ocean, but you would be helping out," she said.

Numerous hotels and resorts that normally have strict cancelation policies are allowing guests to cancel up to the day before as part of an effort to draw back wary tourists.

The Hilton Sandestin Beach Golf Resort in Destin, Florida, recently changed its cancelation policy, allowing a full refund to guests who cancel seven days or more in advance. If the beach in front of the hotel is closed by city, county, state or federal government authorities, guests can cancel within 24 hours.

Other hotels have a similar policy and travel-booking site Orbitz has even created a special booking section with hotels participating in its "Open Beach Guarantee," allowing refunds and cancelations if the government closes a beach within 20 miles.

Not everybody is hurting. For instance, Port Arthur, Texas, has been reporting many more inquires than usual about rental properties and its beaches, which so far have been largely unaffected by the spill. Beach communities along Florida's Atlantic coast have also reported an increase in tourist inquires.

Tourism-related lawsuits are also already starting to creep in. The Florida law firm Podhurst Orseck just filed two class actions on behalf of a Key West property rental company and a fishing charter blaming BP and others for destroying their businesses.

"Once it became clear that early oil spill containment efforts had failed, the tourism industry in Florida was immediately affected," one of the suits filed in federal court reads. "Businesses along the Florida panhandle and down the Florida west coast that cater to tourists began to experience an unusually high rate of cancelations of reservation bookings. Despite the fact that no oil had actually washed up on a Florida beach, the news reports were ominous and tourists, particularly those from out of state, were simply unwilling to take any chances that their vacation might be adversely impacted by the oil spill."

Ricardo Martinez-Cid, a partner in the firm, said that hotels are suffering as a result of the public's fear and uncertainty.

"A number of my clients are actually getting phone calls to see if they will be able to fish tomorrow or if the oil will be too thick," he said. "There will be a long-term effect on the Keys and other impacted regions for decades to come."

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