Tourism Economics, a division of Oxford Economics, has prepared a report on the impact of the BP oil spill on tourism in Louisiana. The report, commissioned by the Louisiana Office of Tourism, says that lost visitor spending is expected to total $295 million through 2013.

BP Oil Spill impact on Louisiana Visitor Spending

Highlights from the report:-

- Leisure tourism losses as a result of the oil spill are expected to reach $691 million, a 2.7 percent drop from pre-spill projections for leisure-travel spending.

- The above loss is somewhat offset, however, by a projected $395 million (3.9 percent) increase in business visitor spending, owing to increases in media presence and government travel, bringing the net anticipated loss to $295 million.

- The pre-spill baseline projection for 2011 was 24.7 million visitors (18.3 million leisure and 6.4 million business). The post spill figures anticipate a total of 24.3 million visitors (17.6 million leisure and 6.8 million business), for 400,000 fewer visitors to Louisiana in 2011 because of the oil spill.

- In dollar terms, the pre-spill visitor spending baseline projection for 2011 was $8.69 billion ($2.37 billion business and $6.32 billion leisure). The post-spill figures show a total of $8.54 billion in visitor spending ($2.49 billion business and $6.05 billion leisure).

- The oil spill impact is expected to persist until Q1 2013, after which visitor spending returns to the pre-spill baseline forecast in Q2 2013.

The report compares data from a study published just before the Deepwater Horizon oil rig exploded against data collected starting from the second quarter of 2010. It starts by explaining the parallel drop in leisure travel and uptick in business travel.

“The number of hotel rooms sold in the second quarter was up nearly 15 percent over 2009. However, fewer visitors passed through Louisiana welcome centers and visits to state parks also declined. Both declined by approximately 5 percent and are indicative of leisure travel volumes. Thus, the increase in hotel room demand can be partially explained by an increase in business travel (with the other part being an increase in the average length of stay). This is expected in the current context given the presence of activity related to the oil spill and cleanup efforts.”

Visitor spending on an individual level and as a whole is being impacted in a variety of ways: The reduced demand is likely to cause travel providers to reduce prices to attract more visitors, while visitors from nearby markets are less hindered than those from further away who tend to stay longer and spend more per visit.

A follow-up study to measure perceptions regarding the oil spill is scheduled for March. Meanwhile Louisiana Lt. Gov. Jay Dardenne is about to launch a new brand campaign at a tourism summit in Baton Rouge on Wednesday.

The Impact of the BP Oil Spill on Visitor Spending in Louisiana – Download (pdf)

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