Aid to Business--and Fear of Tourism Effect : Economy: The rebuilding will employ contractors, lenders and insurance adjusters. And hotels and restaurants will benefit from the displaced. But visitors may stay away.

As contractors and lenders ready for the rebuilding that lies ahead and hotels and restaurants fill with displaced residents, firefighters and armies of insurance adjusters, the devastating Santa Barbara fire has left the area with a tragic business boomlet.

But behind confident official predictions that tourists will still flock to the picturesque beach town, there is worry that the seemingly endless drought and devastating fire will hurt one of Santa Barbara’s most important industries--tourism--at least for a time. In the end, residents say they will rebuild and get on with life, just as they did after the last big fire in 1977.

“When things aren’t right in paradise, people want to know why,” said Ed Caro, president of the California Restaurant Assn.’s Santa Barbara chapter. “But we will rebound quickly here in Santa Barbara.”

The fire that blasted an area just west of Santa Barbara did its worst work on homes--destroying more than 500 of the county’s 75,000 houses.

Most of the businesses destroyed were small mom-and-pop operations, including such Santa Barbara institutions as the Philadelphia House restaurant and nearby Eller Donuts. Some of the area’s large nurseries also were damaged.

Contractors and lenders began gearing up for more business than they have seen in a long time because of generally sluggish conditions in the building industry coupled with the city’s official no-growth philosophy.

“Now that it’s happened, the job is to get it cleaned up as fast as we can,” said Mike Lee, owner of Lee Construction in Santa Barbara. Lee warned that the 1977 fire, which destroyed more than 200 homes, drew many unscrupulous operators who bilked victims anxious to rebuild quickly.

Santa Barbara hotel operators, who typically see 90% summer occupancy rates, expect the fire to have little effect on business.

“It may scare some tourists away this weekend, but as far as the impact on the business, that’ll be taken up by people who were displaced from their homes,” said Ron Derrico, general manager of a Holiday Inn. Several insurance companies are sending agents into the area and they, too, will fill hotels.

Derrico reported his motel’s 156 rooms occupied Thursday, in part by residents forced from homes.

Guests at the Cathedral Oaks Lodge, about half a mile from burned areas, included firefighters and police officers. Lee Ann Davis, a desk clerk at the hotel, expected to rent all 126 rooms Thursday.

Hotels were offering hefty discounts to those forced from their homes. The Holiday Inn charged $50 a night for rooms normally priced at $110. The Santa Barbara Inn billed guests $60 a night, compared to $149 or $169.

“We’re giving people rooms for just what it costs to clean them,” said desk clerk Joe Cabe.

But when residents find someplace else to stay and insurance adjusters go home, will tourists return to fill the rooms?

Santa Barbara Chamber of Commerce Director Steve Cushman says yes, predicting minimal damage to an industry that makes up 30% of the area’s economy.

“People are still playing volleyball on the beach . . . and eating and carrying on as usual,” said Caro, director of human resources for Carrows Restaurants.

But some are concerned.

“Things like the drought and the threat of fire could definitely alter people’s plans to make us a stop on their vacation or weekend trip,” said Gary Dorothy, owner of Stampa Barbara, billed as the world’s largest rubber stamp store.

Said one local business executive, who noted fewer tour buses in town: “People are going to say, ‘Drought, fire, it’s just trouble. Let’s not go to Santa Barbara . . . dear. Let’s go to San Francisco,’ ”

Zena Drewisch, executive director of the Santa Barbara Board of Realtors, lost her house in the 1977 fire, Thursday was coordinating volunteers who were helping displaced residents find shelter. “People rebuilt and went on from there” 13 years ago, she said. “I imagine people will rebuild again.”