In Florida’s Panhandle, hotels still suffer from oil spill’s effects

It was early June when singer Jimmy Buffett and Florida Gov. Charlie Crist stood on the edge of the Gulf of Mexico and called for courage in the face of uncertainty as oil blackened the Panhandle’s coastline.

A short distance away, at the music icon’s $50-million Margaritaville Beach Hotel, 1,200 people stood in line at a job fair hoping for a chance to fill one of 180 positions at the soon-to-open facility.

Orlando, Fla., resident Tamara Baldanza, marketing director for Margaritaville Management, recalls that her outlook at the time was far from bleak. “Oh, it’s fine, we’re Margaritaville,” she remembers thinking. “It’s always magic in Margaritaville.”

But the Margaritaville, which opened June 28, didn’t sell out until Labor Day weekend.

Full houses are the norm for hotels along Pensacola Beach during the crucial summer months, but the summer of 2010 was anything but normal. A busted oil well owned by BP spewed crude into the Gulf of Mexico from April to July, and Pensacola’s tourism-based economy tanked as the oil threatened and then came ashore along Florida’s western Panhandle.

As a result, beachfront hotels reported year-over-year drops in revenue ranging from 12% to 29% during the high-season months of June, July and August, according to figures compiled by the Santa Rosa Island Authority, which leases the land to hotels, restaurants and other businesses.

“We call it the summer that wasn’t,” said Beverly McCay, whose Holiday Inn Express reported a 27% decline in sales.

Pensacola Beach now seems itself again, nearly six months after the Deepwater Horizon drilling platform exploded and sank, sending oil drifting across the gulf toward Louisiana, Mississippi, Alabama and Florida. A ribbon of powder-white sand borders crystal-clear water tinted with an assortment of blues and greens.

“September is the first month since the oil that we’ve seen the numbers better than the year before,” said McCay, the Holiday Inn’s general manager. “The bulk of what we’re seeing are leisure travelers who … postponed their visit and came in the fall.”

Fueled by cash from BP, the local visitors bureau has been luring guests back with $100 American Express gift cards — one for each of the first three nights that a traveler spends in a Pensacola hotel. Brides in search of beachside settings have begun to return.

“We feel like we bottomed out in August,” said Ed Schroeder, director of Visit Pensacola. “In September, we had a whole lot of marketing programs … paid for by BP that hugely impacted travel.”

There’s also an ongoing tension between the oil spill’s continuing aftermath and the image that hoteliers want to project as tourists trickle back to the Panhandle.

The beaches are far less smeared with tar balls than they were a few months ago, and the oil that remains is hard to spot and so dried and hardened that it doesn’t leave stains on beachgoers’ shoes or bare feet.

But below the Margaritaville’s balconies on a recent afternoon, three men in green-and-orange safety vests were huddled over a small hole in the beach, retrieving buried bits of oil. A dozen feet away, a young boy splashed in the gulf’s lazy surf, oblivious to the cleanup work.

The Hampton Inn reported to the island authority a 29% drop in sales for June, July and August — a crucial time of year when Pensacola Beach hotels generate the bulk of their annual revenue.

The Hampton is owned and operated by Innisfree Hotels of nearby Gulf Breeze, Fla. The company also owns the Hilton on Pensacola Beach, which reported just a 12% decline.

“It’s still unpredictable,” said Harlan Butler, Innisfree’s president. “I guess we have mixed reviews. Some hotels are doing better than others.”

In the wake of the new Margaritaville (which Buffett doesn’t own but which bears his world-famous brand), Innisfree also has a resort that’s about to open on the Pensacola strip. Studies conducted before the BP oil spill had indicated that the new venture, a Holiday Inn resort, would be a success, but for now the company doesn’t wish to talk about the hotel’s prospects.

“We began construction way before the oil spill … based on the optimism we were feeling in the tourism market,” Butler said. The hotel is taking reservations for arrivals starting Feb. 17, 2011.

Clarke and Spear write for the Orlando Sentinel/McClatchy.