Tourism revenue fell 40 percent in oily June; Baldwin coast lost $35.5 million


GULF SHORES, Alabama — Lodgings receipts tumbled nearly 40 percent this June over last and retail sales fell 22 percent, according to new data released by Baldwin County tourism officials.

The decline is less severe than the 50 percent drop in tourism-related revenue that many had predicted for June, during which oil regularly tarred local beaches. But together the decreases represent a loss of $35.5 million in taxable spending in Gulf Shores, Orange Beach and the unincorporated portions of the Fort Morgan peninsula.

And while July tax data won’t be available until next month, hotel and condominium occupancy rates and revenue per unit data suggest BP PLC’s oil spill resulted in similar losses during what is traditionally the summer’s most lucrative month.

Still, tourism officials said the numbers beat predictions and indicate that promotional tactics, which included a policy of full disclosure concerning oil contamination, were successful in the face of an unprecedented calamity.

“We’re as delighted as we could be,” said Mike Foster, vice president of marketing for Gulf Shores & Orange Beach Tourism, the organization formerly known as the Alabama Gulf Coast Convention and Visitors Bureau. “The reality is it could have been a lot worse.”

Orange Beach Mayor Tony Kennon said that once vacationers began canceling their weeklong reservations en masse the strategy shifted toward luring people to town on weekends, whether going to great lengths to hold a July 4 fireworks show or hosting a free Jimmy Buffett concert. But because many beach businesses were counting on 2010 to be the year they broke out of a prolonged slump, he said, “it’s still a tough, tough summer.”

Taxable lodgings rentals amounted to $28.2 million in June, which was well off the $46.7 million the same month last year. Retail sales, meanwhile, totaled $58.9 million this summer compared to $75.9 million in June 2009.

Last June’s 71.8 percent condo occupancy rate fell to 44.3 percent during the same period this summer. And the year-to-year gap widened in July when condo owners reported a 41.5 percent occupancy against 79.5 percent the same month last year. Hotels fared slightly better, with occupancy rates hovering in the 60 percent range this summer versus the low 80s during the 2009 season.

On top of fewer renters, owners reported last month that they collected less than half the money they did in 2009 from each hotel room and condo unit on the rental market. Revenue per available condo plummeted from $171.34 in July 2009 to $76.33 last month. Hotel rooms returned only $63.90 in July against $150.45 the year before.

“There’s no question that’s a result of deep discounting,” Foster said.

The losses seemed limited to the Gulf-front, though.

According to the tourism group’s data, retailers and hotels in Foley, which typically thrive and struggle in concert with beach businesses, saw modest gains in June compared to the previous summer.

Reported retail sales in Foley were about $100,000 higher than June 2009’s $51.4 million and taxable lodgings rentals rose nearly 11 percent to $1.08 million.

Foster attributed the spike at Foley hotels to cleanup workers and others affiliated with BP: “Those numbers must be coming from the other side of this because we certainly didn’t see those people at the beach.”

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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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