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STRATEGY

For Businesses in the Gulf, Still an Uncertain Survival Plan

Although the source of the ongoing oil spill seems to be contained, local businesses still foresee a long road ahead.

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By most accounts, the Deepwater Horizon oil spill, which began April 20 after a drilling rig exploded in the Gulf of Mexico, is already one of the largest oil spills in U.S. history. Al Sunseri disagrees.

"I wouldn't even call it a spill," says the president of P&J Oyster company, a family-owned oyster processor and distributor that has operated continuously in New Orleans since 1876. "This is a disaster. I don't think we have anything that can relate to what's happening now. At least, there was a limit to the Exxon Valdez spill, and it wasn't something that just kept coming with no end in sight."

As oil continues to spread throughout the Gulf, Sunseri's oyster farms have been subject to irregular closures that have cut his business by almost two-thirds. He says the last time he was able to shuck oysters was over a month ago.

"I've been doing this for 31 years, and I've not had an experience of anything close to this except for Hurricane Katrina, but this now exceeds that," he says. "We've never dealt with these openings and closings that can happen multiple times a week. Planning our future is significantly different from what I've ever known in my career."

BP, the owner of the oil well currently spewing up to an estimated 60,000 barrels of crude oil each day, said on July 14 that its latest attempt to cap the gushing well has succeeded. But for local businesses whose lifeblood literally swims in those waters, as well as those that rely on the tourists that come to swim at its beaches, the end is far from sight. Three months into the disaster, they are still scrambling to plan for how their business will overcome it.

For many of them, it's been nothing more than a waiting game. "What else can we do?" asks Daryl Carpenter, president of the Louisiana Charter Boat Association and owner of Reel Screamers Guide Service, based in Grand Isle, Louisiana. "We don't know what card we're being dealt next."

The businesses in the Louisiana Charter Boat Association rely almost entirely on fishing tourism, but with crude oil threatening the local fish supply, the local states and the NOAA, who regulate the fishing grounds, have ordered widespread closures. "Frankly, we're dead in the water—no pun intended," Carpenter says. "I have not run in a fishing trip in six or seven weeks."

Other Gulf Coast tourism businesses are facing another challenge: they're still open for business, but no one's coming. They must battle a widespread perception that the entire Gulf Coast has been impacted by oil, which has caused thousands of tourists to cancel vacations to places like Gulf Shores, Alabama, during the busy summer season.

The impact there varies widely on a day-to-day basis, but Kim Chapman, a spokesperson for the Alabama Gulf Coast Convention and Visitors Bureau, says the bureau is forecasting a 50 percent decline in business this summer. That will be a significant dent to the local economy—4.6 million people visited the county last year, spending an estimated $2.3 billion in travel-related expenditures.

In a concentrated effort to keep visitors flocking to the beaches, the bureau has created a website that lists daily updates for specific beaches, including a daily YouTube video. Chapman says much of the message has been about reinforcing the alternative attractions in the area. On July 9, the bureau organized a free Jimmy Buffett concert that drew a crowd of 35,000.

Local businesses are also employing a variety of their own contingency strategies. Emily Gonzales, a spokesperson for Kaiser Realty, which operates 600 condos and beach homes in Gulf Shores, said that her company introduced a guarantee to customers that they would be granted a full refund for any part of their stay in which the beaches were closed due to oil washing up on the shore.

Despite initially widespread cancellations, only about a third of existing reservations through the summer have been cancelled. "We're being as direct and honest with guests as possible," Gonzales says. "That's been our saving grace in terms of reservations already in place prior to the oil spill."

However, the challenge remains in attracting new customers. New reservations at Kaiser last month were down 34 percent, and are forecasted to be down 40 percent this month.

Gonzales says that social media is central to Kaiser's strategy. In the months following the explosion, traffic to the company's blog has tripled. Each day, they post pictures of the beaches to the company's blog, as well as to its Facebook page—even when the oil is there. "Everyday varies, and we want people to trust us when we say it's beautiful because we've showed you what it looks like when it wasn't," she says.

For the other businesses in the area, coping with the oil disaster's threat to local tourism comes down simply to a matter of attitude.

"When this whole thing first started, we realized it was going to be completely different," says Johnny Fisher, general manager of Lulu's Restaurant in Gulf Shores. "We asked ourselves how we were going to deal with this, and right off the bat we approached it with a lot of optimism. We're doing everything better and we're more appreciative of our guests coming in—and we let them know that."

Fisher attributes the positive approach to the fact that business at Lulu's is only off 10 percent this year compared to last. "I've heard of no one else with that level of success right now," he says.

In an immediate response to the oil disaster, the coastal parishes of Louisiana looked to strength in numbers, joining forces to form the Louisiana Tourism Coastal Coalition (LTCC). "The perception is that we are completely shut down," says Violet Peters, president and CEO of the Jefferson Convention and Visitor's Bureau, one of the parishes in the coalition. "The LPCC is an opportunity to market coastal Louisiana like we've never been able to do before. But it's a difficult message that we have to be very on target with."

Peters concedes that fishing tourism still plays a vital role in stimulating the local economy. (Grand Isle, home base for Carpenter's fishing guide service, is located in the parish.) Without the fisheries open, strategic messages and planning can only go so far.

While many businesses sit it out, they are looking to BP as their main survival strategy. As of July 10, BP said that they have written more than 52,000 claims checks, at a value of $165 million, to individuals and businesses to offset the costs and loss profits of the oil disaster. 

"If six months down the road, nothing's changed, I really don't have a plan B," Carpenter says. "Other than BP keep saying they're going to make it right. I've never been on welfare in my life, but I guess I'm going to be on BP welfare."

Ryan Lambert, owner of Cajun Fishing Adventures, a fishing lodge in Buras, Louisiana, that offers guided fishing tours, so far has received $65,000 from filing a claim with BP. For now, he has turned to increasing awareness of coastal erosion. "If I sit there and dwell on what's happening, I would go crazy," he says.

With the oil's ongoing threat to local businesses, the future in the Gulf Coast is uncertain, but the region, no stranger to natural disaster, is armed with a sense of optimism and work ethic. Perhaps no one shares that sentiment more than Sunseri, whose business has been operating there for well over a century.

"I'm not one to give up," Sunseri says. "I started working forty years ago, when I was twelve years old. All I've ever known is to work. I think our customers will eventually come back to us."

Last updated: Jul 21, 2010




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