Falling Dominoes - Restaurants, Hotels, Boating, and Air Travel

Public perception that otherwise clean beaches were, or would become, oiled or that air quality during peak vacation season was poor led to declines in hotel bookings, restaurant seatings, and a wide array of coastal activities. The Gulf coast generates an estimated $19.7 billion of tourism activity annually. Florida accounts for more than 50 percent of the total and, accordingly, attributes enormous actual and potential losses in tourism-related revenue to the oil spill.

Floridians expressed frustrations with the news coverage of the oil spill—not all of it accurate. In July 2010, Keith Overton, Chairman of the Florida Restaurant and Lodging Association, noted that the downturn in hotel reservations through June 2010 in unoiled Pinellas County had cost roughly $70 million and could total in the billions for the Florida Panhandle.

Other states suffered as well. A Louisiana-commissioned national poll conducted in early August 2010 found that 29 percent of respondents who were planning to visit the state said they were actively canceling or postponing their visits because of the oil spill.

Quantifying such losses and the value of reputational damage may be even more difficult than assigning a value to the indirect losses suffered by the Louisiana fishing industry. Furthermore, responsibility for compensating those who may have suffered the indirect financial losses poses challenges of law, administration, and equity.