Ghost of Oil to Come Scares Off Summer Tourists

In beach towns from Texas to Florida, hard times wash up before oil




July 12, 2010
by Ken Wells
Bloomberg

It's supposed to be high season in Biloxi, Miss., but George Griffith stands on a stretch of beach where seagulls, tacking into a bullying southeast wind, easily outnumber the dozen or so die-hard tourists testing the surf.

Photo: The year kicked off with a 20 percent increase in sales at Tallulah’s Treasures, so owner Lynn Thomas, 53, took out a loan and stocked her gift shop with more sandals, parrot-shaped fans, and jewelry. “This was supposed to be the biggest summer since 2004,” she says. It was also going to be the year she paid off $45,000 in debt. Over the Memorial Day weekend, however, the tourists stayed away, and Thomas realized the spill would hurt her long before the oil ever ruined nearby beaches. “For a while, I woke up crying and I went down to sleep crying,” she says. “I can handle things that are in my control, but the things that are out of control tend to stress me out.” (Sage Sohier / Bloomberg BusinessWeek)

"Look, nobody's here," says Griffith, one eye on a bruise-blue rainstorm gathering offshore. Griffith knows the ebb and flow of this place well. In 1986 the 47-year-old Iowa native abandoned Midwestern winters for these warm and sugar-sanded shores. He's spent the past 13 years working his way up to manager of R.A. Lesso Seafood, a longtime, family-owned Biloxi shrimp processor.

It was, he says, a great life, until BP's Deepwater Horizon rig blew up on Apr. 20. Now, the catastrophe that won't end—BP's gusher has spewed oil into the gulf for nearly three months—is playing out like a bad summer movie up and down the Gulf of Mexico's 1,631 miles of U.S. coastline.

May and June mark the peak of shrimp season here, says Griffith, but Lesso's business is off about 65 percent; federal and state authorities have shut fishing grounds, and hundreds of boats that would normally be hauling in shrimp have been hired by BP for its cleanup efforts. Lesso's 35 employees have taken pay cuts as processing has plunged from 72,000 pounds a day to 25,000.

Photo: A few weeks ago, Michael Dyson, 42, (left), general manager of Shaggy’s Harbor Bar & Grill, sailed 60 miles out into the Gulf to see the oil and figure out how serious it would be. “The smell was so bad that if it came in here, I’ll have to shut down—it’s toxic,” he says. “It gave me an instant migraine headache within 5 minutes. Another guy that was with me, he got ill, basically ill, within 20 minutes.” Shaggy’s employs almost 75 people. The restaurant has increased the price of oyster dishes, its most popular, by $2 since the spill, even as the cost of the shellfish has doubled. “The cost of the oysters is killing us,” he says. “I’m making no money selling oysters right now, but I have to because I have them on the menu.” Shaggy’s kitchen manager, Roger Abernathy, 50 (right), passes his days wandering around the big, quiet restaurant talking to customers and waitresses. On a recent day, he sent two of his three cooks home because there was no work. Last year, Shaggy’s sold 18,000 cheeseburgers, this year Abernathy thinks it will be 11,000, at best. (Sage Sohier / Bloomberg BusinessWeek)

Numbers like this mount up along the northern Gulf Coast, from Texas to the Florida Panhandle, where oil has marred dozens of miles of shoreline. Fear of more—federal maps show oil menacing the shore from Terrebonne Parish, La., to Fort Walton Beach, Fla.—is putting a dent in the Gulf's $100 billion annual tourism industry. Anecdotally, business is off about 50 percent at Biloxi hotels even as most of the city's beaches remain open. In Orange Beach, Ala., condominium complexes that ought to be full are half empty. An Alabama Gulf Coast visitor's bureau survey on July 4 showed tourism had plunged 50 percent from the previous year.

In normal years a substantial commercial fishery helps feed these tourists and the nation. Louisiana fishermen alone catch up to 120 million pounds of shrimp in a good year; the wider Gulf produces about 69 percent of the nation's shrimp and 70 percent of its oysters.

Dean Blanchard, a blunt-talking 51-year-old Cajun, figures the BP gusher has cost his Grand Isle (La.) shrimp processing plant about $30 million in sales to date. Grand Isle's beaches were among the first to be hit by BP's oil, and he was soon shut down. "I got a death sentence from Day One," he says. From 90 employees, "I'm down to eight workers."

Photo: At 10 a.m., Tony Kennon, 53, is having his 12th cup of coffee. The mayor of Orange Beach is working 16 to 18 hours a day, 7 days a week. “Sometimes I feel like I’m Don Quixote chasing windmills, you know, battling BP,” he says. He says the company doesn’t pay enough attention to the needs of his 5,330-resident city. He gave up a planned week’s vacation in Lake Forest Ranch, Miss., with his family to stay and help the city. Tourist traffic has fallen 50 percent, and because the city budget relies mostly on lodging and retail sales taxes, Kennon anticipates that he may either have to lay off some of the city’s 225 employees or lower everybody’s pay. (Sage Sohier / Bloomberg BusinessWeek)

True, some ex-employees are skimming oil for BP, and it's proving far more lucrative for them than shrimping ever was. Those lucky enough to sign on with BP are getting as much as $2,000 a day for their boats. Others are getting BP payouts, collecting $2,500 a month.

"But some of these are guys that were making $5,000 to $6,000 a month with me," says Blanchard. "The idea that BP is making people whole is a lie....They are making people that were poor, rich, and people that were rich, poor. They've turned everything upside down."

For Pete Gerica, a 57-year-old New Orleans-area crab fisherman, the spill isn't just a blow to the economy but to his autonomy. With about 35 percent of the Gulf's federal waters and 57 percent of the state's fishing grounds now closed, Gerica has found himself fenced out of his traditional waters and stuck, with plenty of company, in Lake Pontchartrain, just north of New Orleans. The 40- by 24-mile brackish lake may seem large, "but there are 40 to 50 of us in there now, with some guys fishing 300 to 500 crab traps," says Gerica. "That's thousands of traps—an unreal number. The pie is getting cut thinner and thinner."

Tinakon Dan Sananikone, 49, is feeling pressure too. A Laotian immigrant who came with his family to the U.S. in 1976, he founded a successful crab wholesaling operation. Before the spill, about 20 crabbers sold to him at his docks in Lockport, La., about 50 miles south of New Orleans. Since the spill, he's lost about 70 percent of his sellers; their grounds have closed or they've gone to work for BP. "We're just trying to hang on," he says.

Photo: Tinakon Dan Sananikone, 49, (right) is owner of Never Enough Seafood, a blue-crab wholesaler. A native of Laos, he runs the business with his wife and sons Shawn, 28 (left), Tom, and Albert. After waters were closed to fishing, Sananikone saw a decline in both supply and workforce; 7 of his 10 fishermen left for better-paying clean-up jobs. Crabs from Louisiana have more meat than Georgia crabs, Sananikone says, yet he may lose out to competitors in Savannah. “We’re taking it day by day,” he says. “I really do hope they stop the spill soon, so we can get back to normal.” Slower business leaves him with more time for his 10-month-old granddaughter Viviyan (center, held by Sananikone‘s daughter-in-law Christina, 23). He has been selling crabs since 1988 and says this is the hardest situation he’s ever faced. (Sage Sohier / Bloomberg BusinessWeek)

Griffith, staring out at a thunderstorm that is now clearly headed for the beach, says at least storms come and go. A Katrina survivor—he was swept from a Biloxi building by a surge and nearly drowned—he sees no end to the BP nightmare. In past years he easily made $10,000, including overtime, in the prime six weeks of the season; this year he will make about $3,000 to $4,000. Next to go, he fears, will be his job.

"But it's not just our business," says Griffith. "It's hotels, the restaurants, the souvenir shops. It's the lady we buy our plastic bags from. She's got a warehouse full of bags. I feel bad for her, but we can't buy the bags because we don't have anything to put in them."

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