June 2015

After the Spill: Is Hilton Head’s Tourism Forecast Going to be Sunny?

Author: Becca Edwards

In April 20, 2010, BP’s Transocean’s Deepwater Horizon oil rig exploded. Of the 126 people onboard, 11 workers were killed. By April 24, the Coast Guard reported that an estimated 1,000 bbl (42,000 gallons) of crude oil were leaking from the underwater well approximately 5,000 feet below the surface; and by April 28, government officials announced that the oil was actually leaking five times faster at a rate of 5,000 bbl a day, forming a 5,000-square-mile oil slick. In a matter of days, already threatened and endangered sea turtles washed ashore dead along the Mississippi coastline. In a matter of weeks, scientists revealed massive underwater oil plumes. According to Time magazine, “One discovered by marine scientists at the University of South Florida is a six-mile-wide, 22-mile-long cloud of oil, broken into millions of beads by chemical dispersants, that is moving with the current toward the coastline.”
May 18, NOAA extended the no-fishing zone in oil spill areas to 45,728 square miles—or approximately 19 percent of the U.S. waters in the Gulf of Mexico. Tar balls and waves of oil floated along the Gulf’s shores as efforts to stop the leak continued to fail, and by May 27, scientists declared the BP disaster to be the worst spill in U.S. history.

June 10, it was reported that now as many as 25,000-30,000 barrels of oil were leaking per day, equaling more than a million gallons every 24 hours. By the time the leak was finally capped, more than 184 million gallons of oil had leached into affected waters, killing or injuring thousands of wildlife and devastating multiple industries in the Gulf—including the tourism industry.

In July 2010, Oxford Economics, a commercial venture with Oxford University’s business school that provides economic forecasting, published the Potential Impact of the Gulf Oil Spill on Tourism for the U.S. Travel Association. In the summary of findings, it reported, “Tourism is one of the top economic drivers of the Gulf region. Visitors to Congressional Districts along the Gulf coast spent in excess of $34 billion in 2008, sustaining 400,000 jobs. Current indicators show double digit declines in plans to travel to the region. The potential impact of the Deepwater Horizon oil spill could cost the U.S. economies $22.7 billion over a period of three years.” This and other noteworthy studies predicted severe economic losses, and in May 2012, it was reported that BP had spent more than $150 million to aid tourism in Florida, Louisiana, Alabama and Mississippi and would continue to dole out millions and commit to $82 million for seafood marketing and testing.

Now, five years later, much has happened in the wake of the Deepwater spill—including its effect on Hilton Head’s tourism. In a 2014 white paper published by the BP site thestateofthegulf.com (so take this information with a grain of salt—pun quasi intended), “Some speculated that tourism and recreation along the Gulf would not recover for many years after the 2010 Deepwater Horizon Incident. Such speculation turned out to be unfounded; data from 2011-2014 shows that many areas along the Gulf Coast areas have experienced record-breaking tourism numbers.” The white paper continued with supportive data, and the main take away from this information is that the Gulf States have proven to be resilient and people should continue to be supportive and enjoy this impressive seascape.

Hilton Head Island is thankful for its robust tourism industry. Currently 17,612 jobs (that’s 30.6 percent of all jobs on Hilton Head Island, in Bluffton and the Lowcountry) depend on the hundreds of thousands of visitors who come to the area every year. On a less statistical and more personal note, if my parents had not vacationed here in the 1980s, we would not have moved here in the early ’90s. My children and I frequently play the license plate game and see how many different states we can identify in a single outing. I am constantly meeting tourists from all over the world. In a word, our island guests rock.

The first objective of this article is to explore whether the BP oil spill has changed our tourism industry. Did we inherit the vacationers who would otherwise be basking in Texas’, Louisiana’s, Alabama’s, Mississippi or Florida’s sun? And if so, does that change things like house rental pricing and timeshare sales, sports and leisure activity participation, and retail sales? Could this impact traffic flow, our crime rate or the type of crimes committed, or beach pollution? Or—and this is a tough one to ask and get an answer to—who will, demographically speaking, visit us in the next five years and therefore maybe one day move here?

The more I probed into this question, the more I realized that several factors have influenced our current tourism demographics, as well as the Hilton Head brand. In May 2014, Forbes contributor Bob Cook wrote, “Every number coming out recently regarding the state of [golf] is a negative, with millennials—as in, young people, as in, the future of the game—in particular abandoning, or having no interest at all in, a good walk spoiled.” Cook cited a declining middle class, disappointing quarterly earnings in golf sporting goods, equipment and course prices, and the home mortgage crisis as major players in golf’s drop off. I would also add that many people today do not have the patience, time or desire to take five hours out of their day to hit a small white ball in a small dark hole.

Nevertheless, in the past Hilton Head has branded itself as a high-end golf destination. Yet, as the golf industry continues to slump, so has our tie to the sport. As a result, the question then becomes, how should we brand-identify ourselves so we can be the most attractive and accommodating resort destination in our market? Many say we need to focus on being a high-end, family oriented destination.

The other issue at hand here is offshore drilling. And before we delve into that debate, return to the first two paragraphs of this article. “The worst spill in U.S. history… 184 million gallons of oil… killing or injuring thousands of wildlife and devastating multiple industries… double digit declines in plans to travel to the region.” I am not suggesting that all offshore drilling ends with a catastrophic blast and ravaged ecosystems and economies. What I am saying is that time enables us sometimes to forget the shear impact of certain events. After the initial 100 days of the spill, how many times have you or I really even thought about what happened in the Gulf and the permanent damage it caused? As Confucius said, “Study the past if you would define the future”—right?

On May 4 of this year, The Island Packet printed “Carolinas clear first proposals for offshore oil surveys.” In the article, it was reported that, “State regulators in both Carolinas have signed off on proposals by companies to conduct seismic testing for oil and natural gas off the Atlantic coast, subject to some conditions.” Before we even heed conservationists’ warnings that such testing can be injurious to marine species like fish, right whales and sea turtles and that it “is inconsistent with the state programs,” we must also consider the fact that even allowing this testing is further opening the door—or rather Pandora’s box—to offshore drilling.

As a response to the question, “Is offshore drilling an appropriate economic development strategy for South Carolina?” the Coastal Conservation League responded, “No. Our state’s fisheries and ocean-based tourism and recreation support nearly 79,000 jobs and generate over $4.4 billion in GDP each year in South Carolina. Embracing offshore drilling would mean the industrialization of our state’s coastline with oil and gas infrastructure, which is in clear conflict with the existing economic and environmental advantages enjoyed by our coastal communities.”

In another statement, the League wrote, “The SC Board of Economic Advisors has stated, ‘While offshore oil and gas activities have become much safer in recent years, spilled oil and coastal shorelines don’t mix. The National Oceanic and Atmospheric Administration ranks the South Atlantic as having the highest relative environmental sensitivity to spilled oil. Given the relatively low amount of potential resources off of our shores and the environmental sensitivity of our coastline, there does not seem to be much incentive for drilling off South Carolina at current prices.’” So, even if you are not a “tree-hugging liberal” and look conservatively at the numbers, do you really want to risk our tried-true tourism industry for the potential of meeting our nation’s energy needs?—needs that are also highly debatable.

As a journalist, I do not like to publish more questions than answers, but the truth is we are currently writing our fate—collectively. Now, more than ever, I encourage people to ask our town representatives, local organizations, our neighbors, ourselves, or anyone who will listen, “Is Hilton Head Island’s tourism forecast going to be sunny?” If we all keep asking this question, I’m sure we can come up with some positive answers. 

Becca Edwards is a wellness professional, freelance writer and owner of b.e.WELL+b.e.CREATIVE (bewellbecreative.com).

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