The explosion and sinking of the Deepwater Horizon oil platform in the Gulf of Mexico will cost Mississippi’s three coastal counties nearly $120 million, according to a study released Monday by The University of Southern Mississippi.
Authored by Dr. David Butler and Dr. Edward Sayre, the White Paper projects a 5 percent revenue loss from May-August 2010, when compared to the same period in 2009. However, tourism has taken a large “hit,” with non-casino hotels down 50 percent. These figures include the tourism and service sectors related to hotels, restaurants and food and beverage outlets. It does not include the losses in the seafood sectors such as shrimping.
“No oil has washed up on Mississippi beaches, yet the economic impact is very significant to the people of the Gulf Coast,” said Butler. “It’s significant because of the negative images portrayed by the national news coverage.”
Hardest hit by this economic downturn are the charter boats and head boats. Revenue is down a whopping 70 percent on average with some down more than 90 percent. Butler and Sayre project that without additional sources of revenue there is a chance that industry will shrink significantly. This strong decline in recreational and commercial fishing has a ripple effect throughout the coastal community with a 65-70 percent decline in the sale of boats and boat trailers, tackle, ice and other related supplies.
“The quandary in which tourism related businesses find themselves is that they can’t look forward to 2011 and say things will get better. Until the oil leak is stopped, no one can foresee a beginning date for when a turnaround might begin,” explained Butler.
According to the Southern Miss report, seafood restaurants are down at least 30 percent from this time last year. However, at the same time, seafood prices are up an average of 30 percent. This, the authors state, makes it difficult for seafood restaurants to remain profitable, maintain their staffs, and pay their bills. The research shows non-seafood restaurants are down 15 percent over the same period in 2009 due to the drop in tourism.
Most notable in the research is the finding that the three coastal counties – Hancock, Harrison and Jackson – never fully recovered from Hurricane Katrina in 2005 before being hit by the national recession and this oil crisis.
“This is part of a rolling disaster for the Coast community,” declared Butler. “The first four months of 2010 showed things were looking up and getting better, then came the oil spill. This is a test of how resilient people and an economy can be after taking a one, two, three punch.”
The Southern Miss research was funded by the Department of Homeland Security and sponsored by Southeast Region Research Initiative at the Department of Energy’s Oak Ridge National Laboratory. A complete copy of the white paper by Butler and Sayre may be downloaded at: http://www.usm.edu/oilspill/files/white-papers/Oil-Spill-Economic-Impact-Butler-Sayre.pdf.