Oil spill claims: Lodging industry says facility’s methodology must change


Even after many of south Baldwin County’s businesses recover from the BP oil spill, some experts say, the lodging industry may still be reeling.

Tourists who return to the restaurants and shops are enticed by the drastically reduced rates on hotel rooms and condo rentals, said Bert Sanders, partner in the Gulf Shores-based accounting firm Grant, Sanders & Taylor PC.

His firm has been instrumental in trying to obtain payments from the Gulf Coast Claims Facility for dozens of the area’s businesses.

“Returning to pre-spill numbers of tourists by itself does not return these businesses to a pre-spill position,” Sanders said.

And the impact on the industry is deeper than just occupancy rates.

Those who work in the industry are forced to work longer hours, and take on more tasks.

Since the oil spill, a hotel room that took 4.5 minutes to book now takes 9 minutes, Sanders said, because the hotel clerk must explain the condition of the beaches.

A condo manager may have to converse with hundreds of owners about how to handle their property.

“These guys are on the front line,” Sanders said. “They’ve got a huge load to bring these people back.”

The Gulf Coast Claims Facility does not properly consider the lodging industry of Alabama’s beachfront tourism communities, according to a report commissioned by Gulf Shores and Orange Beach Tourism.

The two years prior to the oil spill were weak for hotel and condo rentals across the country, but before the oil spill Alabama’s Gulf Coast was on pace for a boost in the lodging industry for 2010, according to statistics from Colliers PKF Hospitality Research.

Last year, the average daily rate for hotels across the nation was down about 0.1 percent. But hotels in south Alabama saw a drop of 11 percent, and condominium rentals were down more than 15 percent.

Herb Malone, executive director of Gulf Shores and Orange Beach Tourism, said he sought the report while trying to show that GCCF should analyze a trend in lodging, instead of comparing previous years.

“One year to the next does not exactly tell you the whole story,” Malone said. “If the spill had never occurred, where would you be? That’s what they owe the difference on, not what you made last year.”

Malone said he presented the report to GCCF officials during the recent two-week period claims czar Ken Feinberg offered for input on his payment methodology.

“Despite having received thousands of written comments and reports like this, they pretty much ignored anything and everything that had to do with the flaws in their research and the method of calculation,” Malone said.

While the GCCF facility accounts for recovery within two years, the report states that the stigma associated with the oil spill could last much longer.

“An obvious example of lost enjoyment is the possibility of residual oil on beaches limiting beach usage,” the report states.

Even if the beaches experience no further damage from oil or another disaster, Malone believes a two-year recovery is “very optimistic.”

“We’re not talking about returning to where we were in 2008 or 2009,” he said, “but to where we would have been in 2010.”

Sanders agreed, saying that Alabama’s Gulf Coast relies heavily on the lodging industry.

“If they’re not successful, then our economy is not going to be successful,” Sanders said. “It’s not because they’re anymore deserving than the next group, it’s because it all starts with them.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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