The massive oil slicks in the Gulf of Mexico are beginning to come ashore and threaten the economy of coastal regions in Louisiana, Mississippi, Alabama and Florida, but it is too early to know the ultimate effects.
One early indicator is tourism. Tourism on the Gulf Coast between Mississippi and the Florida Panhandle approaches $4 billion annually, and the Alabama Gulf Coast Convention & Visitors Bureau reports that more than $533 million was spent by tourists during the 2008-09 fiscal year. Early estimates are that tourism in that area may be down by 30 to 50 percent this summer, depending on the actual beach damage that occurs in the coming weeks.
|Business Professor Bob Robicheaux predicts a price increase for shrimp, red snapper, grouper, oysters and other seafood if fishing operations remain shut down for an extended time.
UAB business Professor Bob Robicheaux, Ph.D., says condominium and hotel owners likely will begin to drop prices soon in an effort to bring tourists to the area this summer - a development that he says is good for the consumer, but bad for the industry.
"The hotels and condo owners who are forced to drop prices to get people to frequent the restaurants, buy gasoline and shop the outlet malls will see a severe economic blow on their revenues," Robicheaux says. "Look how price competition is affecting the automobile and clothing industries. You can buy those products at rock-bottom prices across the country these days, but the retailers are suffering. I like low prices as much as anybody; but, as a student of business, I know that competing on the basis of price is a no-brainer - you go bankrupt."
Robicheaux says the oil spill also will put many coastal workers - especially fishermen - out of a job, but it also will create new jobs in oil well maintenance and cleanup along the beaches.
Because shrimp, red snapper, grouper, oysters and other seafood will not be as plentiful if fishing operations remain shut down for an extended time, Robicheaux says prices will make a significant leap upward. That will have an impact on restaurants, supermarkets and, ultimately, our household-eating patterns.
"It's going to be a while before you can find shrimp at $4.99 per pound again at your local grocery store," Robicheaux says. "And, all of these seafood restaurants in Birmingham that count on every-other-day delivery of seafood from the Gulf Coast are going to find the supplies drying up and prices exorbitant. Restaurant operators across the nation will be willing to pay twice what we've been paying for seafood just to keep their menus, and they will likely outbid our providers. Many local restaurant operators may have to change their menus from shrimp, snapper and grouper to other types of seafood and probably even other types of food."
Ports in Mobile and New Orleans that travelers count on to provide cruises also could be impacted if they are unable to sail.
In addition to the commercial fishermen and the loss of income in those port cities, Robicheaux says to expect serious economic downturns in the transportation industry sectors, including motor carrier, rail and inland water carriage as inbound and outbound traffic through the ports of New Orleans and Mobile are hobbled by the oil-filled shipping lanes across the Gulf of Mexico.
"Both of those cities have done so much to rebuild traffic in recent years, and it has had a tremendous economic impact in Alabama," Robicheaux says. "People are going to be affected in many ways, and it could have an impact for years. We'll see it, and we'll feel it. For how long depends on when we can get those leaks under control."