gulg coast
Gulf Shores, 2010. These beaches are now crowded with tourists. Image: southerntabitha/Flickr/CC BY

A year after the British Petroleum oil spill was capped, tourism is back up in the Gulf of Mexico. In light of this, BP has petitioned the court to lower its damages settlement. But some say reports of the tourism rebound are inflated or misleading.

The beaches were empty

Last year the tourism industry, which the Gulf of Mexico area depends on economically, was almost non-existent. The beaches were vacated in April, 2010, when an offshore oil drilling rig owned by British Petroleum exploded, killing 11 men. The oil flowed into the ocean for three months until it was successfully capped.

Tourism rebound

This year, reports say the area is enjoying a rebound in tourism. Over the July 4 weekend, vacation rental occupancies were at 100 percent. USA Today Travel reported “tourists are back digging their toes into white sand beaches and scarfing down fried shrimp at restaurants along the Gulf of Mexico.”

BP petitions court

BP sees this as evidence that the oil spill did not adversely affect the tourism industry to nearly the degree feared. Last Friday, the company filed a request for the court to lower its damages settlement. The court filing claimed that “there is no basis to assume that claimants, with very limited exceptions, will incur a future loss related to the spill.”

The company has long taken issue with the formula used to calculate the Gulf oil spill settlement. Under that formula, developed by Kenneth R. Feinberg of the Gulf Coast Claims Facility, settlements were calculated as double the estimated losses from 2010. BP maintains that the formula is too generous in estimating the “future factor.”

Some say reports exaggerated

Some business owners, however, say they aren’t feeling the tourism rebound. Many believe that business is still being adversely affected by the spill and that positive reports are often inflated by the travel industry and business owners who have a vested interest in luring tourists back.

BP helped create the rebound

Much of the rebound has to do with BP’s aggressive media campaign to promote tourism in the region. Investment site Seeking Alpha on Friday posited the question, “Did BP agree to spend tens of millions of dollars to aggressively advertise travel in the Gulf states in order to avoid even larger court settlements down the road?”

Rick Outzen of the Independent News summed up on his blog what may be on the minds of many in the Gulf region today:

“Our state and local leaders have been so quick to declare that the beaches, seafood and Gulf Coast are doing fine that we may have screwed up the chances of the remaining outstanding BP oil spill claims to be paid.”

Sources

USA Today Travel: http://travel.usatoday.com/destinations/dispatches/post/2010/10/six-months-after-bp-oil-spill-gulf-tourism-is-on-the-mend/128032/1
New York Times: http://www.nytimes.com/2011/07/16/us/16gulf.html?_r=1&hp
Seeking Alpha: http://seekingalpha.com/currents/post/82553

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