Gulf Spill Impact Lingers On for Many Coastal Properties

A little more than a year after the Deepwater Horizon oil spill in the Gulf of Mexico, only 37 percent of 100 Gulf Coast hotels have recovered from the spill. So says a survey conducted by The Knowland Group, a data firm specializing in the global meetings and conventions industry. Even more disconcerting, according to the survey, is that fewer than half surveyed have a contingency plan in place in the event of another Gulf disaster. One hotelier surveyed in Lake Charles, La., believes there isn’t much that can be done to prepare for a situation like the Gulf Oil Spill. “We lost 20 percent of our business during the spill and we have already cut our prices as low as we can to compensate,” she said. “If there is another disaster I will need to close down the hotel.”

In its research, Knowland found that group sales at nearly half of the hotels surveyed were affected by the spill and only 37 percent have fully recovered from the negative financial effects. The survey was conducted at hotels spanning the Gulf Coast region--Alabama, Florida, Louisiana, Mississippi and Texas. Nearly one-third of the hotels surveyed lost a lot of business during the 87-day spill and the following months during the massive cleanup operation. A great deal of hoteliers surveyed, 41 percent, experienced some lost business while 29 percent were not forced to deal with cancellations and/or sluggish group sales. Of the hotels that were affected, 31 percent have not recovered from the revenue lost from the oil spill and 32 percent have seen their profits rebound somewhat. When it comes to the number of bookings, 43 percent report they are back to the same level of group bookings they would typically see while 29 percent have not seen their group bookings bounce back.

During May and June 2010, Knowland surveyed hoteliers in the Gulf Coast region four separate times to gauge the effect the spill had on their hotel group sales. Cancellations steadily increased throughout May and June with 60 percent of the hotels having to make do despite group booking cancellations. The end of June 2010 brought about an upswing in the amount of room bookings because of the cleanup crews. But that didn’t last according to Carol O’Brien, the general manager/director of sales at the Days Inn & Suites Bayou Land in Thibodaux, La. She said as soon as the recovery teams left, so did the business.

It is clear that even though the oil spill has left the front pages of newspapers and websites, the spill is not over by any means for many Gulf hoteliers.

The Knowland survey was conducted over a five-day period from April 4 through April 8, 2011.