BP Oil Disaster Could Cost Gulf Economy $22.7 Billion

BY Ariel Schwartz
There may no longer be oil seeping into the ocean off Louisiana's coast, but the damage is done. And the cleanup process will be expensive, lengthy, and detrimental to the Gulf economy, according to a report (PDF) from Oxford Economics.
The report, released this week, offers some eye-opening statistics: The effects of the oil disaster on tourism to the Gulf Coast will last up to three years and cost the area $22.7 billion. Most of the losses will fall on Florida's shoulders, but Louisiana, Mississippi, and Alabama will also feel the disaster's effect on tourism for a long time to come.
But the situation isn't without hope. According to Oxford, the disaster's impact could be reduced by $7.5 billion if a $500 million emergency fund is put in place. Oxford explains in the report:

Separate research by Oxford has determined a range of tourism marketing ROI for various destination campaigns over the past decade. This analysis showed that some of the most effective campaigns were conducted after a crisis. This was observed in campaigns both for Canada after SARS and for Alaska after the Exxon Valdez spill....we found tourism marketing campaigns to yield a return of $5 to $64 in visitor spending for every dollar spent on marketing.

The U.S. Travel Association--the nonprofit that represents the country's travel industry--also released a 10-point "Roadmap to Recovery" (PDF), in response to Oxford's report. Among the suggestions: business meal tax deductions, an employee retention tax credit, and a reversal of the "state of emergency" declaration (The USTA thinks it has too negative of a connotation).
All good ideas, and they could certainly give a boost to the Gulf Coast's economy. The problem is, though, that no one really knows what the long-term environmental impact of this disaster will be--and the scope of that impact will directly affect the tourism recovery process. Not that we're knocking the recovery plan--it's a much-needed start.