By Michael Peltier

Original Link: Reuters, US 06.09.10

June 9, 2010

Even plumbers feel the pain as spill threatens tourism

* Prolonged impact could cost Florida economy $11 billion

* Most beaches are still clean but misperception persists

PENSACOLA BEACH, Fla., June 9 (Reuters) - Gary Chernekoff doesn't own a restaurant, isn't a charter boat captain and doesn't work for a hotel or resort.

But he is hurting.

A plumber by trade, the Pensacola, Florida resident expected to have a busy and profitable summer. He had three big jobs lined up -- vacation homes being built in this summer tourist haven on the coast of the Florida Panhandle.

It was more than enough work for a one-man operation. But the massive oil spill in the Gulf of Mexico that began in April is now depriving Chernekoff of his source of income.

Unsure how deeply the spill would affect the market for $5,000-a-week time shares, investors stopped work on the projects. Chernekoff suddenly found himself without a job.

"I'm telling you, that was a kick in the pants," said Chernekoff, who is trying to seek compensation from British energy giant BP Plc (BP.L) (BP.N).

As state and BP officials respond to the biggest oil spill in U.S. history, Chernekoff's predicament is echoed across Florida's Gulf Coast. One economist calculated the state could lose up to 195,000 jobs and nearly $11 billion in economic activity from the prolonged impact of oil washing up on Florida shores.

So far, only a few northwest Florida beaches have been littered with tar balls. The hotels remain relatively full along the Florida Panhandle, a summer tourist destination for many U.S residents within driving distance from Georgia, Alabama, Tennessee, Arkansas and Louisiana.

But economic development officials are eyeing the Gulf and bracing for higher concentrations of oil that would shut down their beaches and send travelers elsewhere.

"I talked to some hotel folks and it looks like they were packed over the weekend," said Buck Lee, director of the Santa Rosa Island Authority, as he toured Pensacola Beach this week. "The question is: how long will it last?"

Long before Walt Disney Co (DIS.N) made its mark in Florida, tourists came to the "Sunshine State" for its beaches. The tourism industry pumps more than $60 billion a year into the state economy. Gulf Coast communities are even more dependent upon the seasonal industry, which in northern Florida peaks in the summer months.

A BODY BLOW

Economist Sean Snaith, who directs the Institute for Economic Competitiveness at the University of Central Florida in Orlando, said a conservative estimate has the state losing at least $2.2 billion in revenue and 39,000 jobs.

That's assuming a 10 percent decline in employment and output in tourism-related business in the 23 counties on the Florida Gulf Coast.

If the impact becomes more severe or prolonged, dropping employment and output in half, Snaith said the state could lose nearly $11 billion in business activity and more than 195,00 jobs. That would be a body blow to a state just recovering from a housing market crash and suffering high unemployment. He acknowledges that exact numbers are difficult to nail down.

"A hurricane passes through and it's a limited duration event. There's damage and you can figure it out," Snaith said. "Here, we don't know when (the oil) is going to arrive or how long it's going to stay. To use a hurricane analogy, we don't know what category it's going to be."

His calculations did not take into account predictions that ocean currents could carry the oil around to Florida's Atlantic Coast as well as the Gulf.

State tourism officials have been trying to spread the word that most Florida beaches remain untainted by the spill. It's a moving target.

In Perdido Key, off Florida's Panhandle, local health officials on Tuesday posted notices on the beaches telling visitors not to swim. It was the first such advisory posted for Florida beaches because of the oil spill.

By Wednesday morning, however, tar balls were few and far between and no oil sheen was present.

Florida marketing officials are tailoring their messages to would-be tourists and offering live beach updates on the state's website, www.visitflorida.com. Local economic development officials are doing the same, but it's hard to compete with around-the-clock media coverage of a story with global interest.

MISPERCEPTIONS AND REALITY

"There is a whole lot of anxiety and a lot of concern," said Chris Thompson, president and CEO of VisitFlorida, the state's tourist marketing arm. "Our battle is to separate the misperceptions from reality."

Bill Stromquist, treasurer of the Perdido Key Area Chamber of Commerce in northwest Florida, said local booster efforts were being hurt by tourism officials in other states.

During a recent road trip down the U.S. eastern seaboard, Stromquist said he stopped at state-run visitor information stations in each state along the way. In each place, he was told incorrectly that Florida beaches were closed.

"They're killing us and I don't know how to fix it," Stromquist told state tourism representatives on Wednesday. "People are canceling before they get the information that the beaches are clean."

A state-run advertising campaign paid for by $25 million in BP cash appears to be helping fill rooms in the Panhandle region. The BP-backed effort, which was criticized for taking too long to begin, follows advertisements paid for by the Florida Restaurant and Lodging Association.

State officials have been trying to respond.

On Monday, Florida Governor Charlie Crist launched a state-run program that will provide low-interest loans of up to $25,000 for businesses affected by the spill. BP so far has paid nearly $50 million in lost-income claims across Gulf states, including more than $6 million in Florida.

Officials are also considering measures to provide property tax credits and to relax sales tax collection rules in an effort to help businesses address cash-flow problems brought on by the unexpected dip in revenue.

"This has caught a lot of businesses off guard, especially for May and June," said Lisa Echeverri, executive director of the Florida Department of Revenue. "There are a number of things we can do to help businesses."

Meanwhile, local officials must still contend with cost-conscious travelers trying to make the most out of their summer break.

"If I'm spending $3,000 for a vacation, I'm not going where there are any too many 'ifs,'" Stromquist said.

(Editing by Jane Sutton and Will Dunham)