Counting the cost

The oil spill caused by an explosion on the Deepwater Horizon rig in April this year has been described as the United States’ worst environmental disaster. The catastrophe in the Gulf of Mexico claimed the lives of 11 crew members and the estimated cost of cleaning up the oil slick reaches into billions of dollars.

Here we draw on University expertise to look at the impact of the incident from a tourism and business point of view.

Tourism

Fishing and tourism are the area’s two key industries – both of which are adversely affected by the oil spill. Visitors generally travel to the area in search of sunny weather, nice beaches, relaxation and leisure rather than active holidays. Peter Robinson is Senior Lecturer in Leisure Industries and says that perception is key to the effect on tourism.

“Most disruption relating to travel and tourism, whether it is the volcanic ash cloud, an oil spill or 9/11, is centred round people’s perceptions of what a place is like and how it may have been changed or damaged as a result. People will weigh up whether a place is safe and if it is going to live up to expectations,” Peter, from the School of Sport, Performing Arts and Leisure, says.

“Some people will go ahead with their planned holiday and have a good time – but that positive experience does not get reported. The media is very powerful and it is easy to put people off travel. But when you watch reports on the news, it is from an environmental and not a tourist perspective, so it is difficult to know how far reaching this imagery is in the way it influences travel decisions.”

The long term impact on tourism depends on a number of factors – how long the disaster lasts, how much money is spent on both the physical  recovery and how the destination is promotedin other ways. Some people will continue to support areas affected by crises due to basic loyalty for the community or the fact they don’t know where else to go. In time, additional tourists may visit, including those who have been to an affected area 20 years prior to such an incident and go back to see how it has changed.

But there is also an element of ‘dark tourism’, which refers to visitors heading to a place where people have died or there has been significant destruction. These, however, will  mainly be domestic visitors, and Peter believes that in the case of an oil slick, there is unlikely to be much of this due to the nature of what there is to see.

Recovery is the key and Peter says there needs to be investment to regenerate and then promote the destination, and the sooner the better. The longer it takes to invest in tourism, the longer it takes to mitigate the effects.

The media has a role to play here as well, as positive coverage of how a community has rebuilt can serve to draw visitors back.

There are a number of examples of places that have suffered a disaster but have been able to recover. Extensive damage was caused by flash floods to Boscastle in Cornwall in 2004, but the area has largely been able to recover and draw visitors back. The Severn Valley Railway between Shropshire and Worcestershire suffered major  structural damage due to a landslide in 2007, but an emergency appeal and grants helped ensure this attraction got back up and running.

But some areas never recover. Hurricane Katrina tore through New Orleans in southern America in August 2005, claiming the lives of more than 1,000 people and destroying homes and businesses. Peter Robinson explains the area had been seen as a niche and bohemian place to visit. Although work has been completed to regenerate the area, some places remain untouched and in desperate need of repair. But as Peter says, fixing a small British village is very different to repairing vast areas of American cities or coastline.

Business

BP rebranded itself in 2000 in a bid to appeal to environmentally aware consumers. The logo was changed to a green and yellow sun and the company adopted the slogan ‘Beyond Petroleum’. On its website, the company explains its ethos as, “We help the world meet its growing need for heat, light and mobility. And we strive to do that by producing energy  that is affordable, secure and doesn’t damagethe environment”.

But the oil disaster has once again highlighted the potentially dangerous and damaging nature of the oil industry.

Professor Mike Haynes is the Joint Head of the Management Research Centre at the University of Wolverhampton Business School. He says there will be short term and long term impacts for the company following the disaster.

“In the short term, the share price took a tremendous hit, the company has had to pay compensation and sacrifice dividend payments. In the long term, the oil spill has exposed a degree of brand manipulation. BP was branded as being more environmentally aware, but that brand has been damaged.

“The only defences seem to have centred on the fact that BP is no worse than any other oil company, and that this incident is not as big as the one during the First Gulf War in 1991,”  Mike explains.

Corporate Social Responsibility (CSR) refers to practices whereby companies can make a profit by being good. Concern for the workforce, community and environment is complicit with a healthy bottom line.

Supporters of CSR argue that ethical business is good business, but critics view this as ‘greenwashing’ as it is sometimes used to manipulate an image and still centres on making a profit.

Professor Haynes says: “The claims around CSR do not always live up to the reality.

“Looking ahead, the company could rebrand, but while BP was trying to put a cap on the oil, the story ran and ran. They can clean it up, but the legacy will be long lasting.

“Everybody is using this in their own way but the bottom line is that worse environmental incidents have happened, but is that a justification? And if this had happened somewhere else, would it receive the same reaction?”

Only time will tell how the company and tourism in the area emerges from the aftermath of the oil spill.