One year after BP oil spill, many Gulf Coast businesses on brink of collapse

One year ago today BP’s Deepwater Horizon rig was consumed by flames, its weakening frame on the verge of collapsing into the sea it fed upon. Today, that image provides a fitting metaphor for thousands of small businesses in Louisiana, Mississippi, Alabama, and the Florida panhandle that continue to struggle with severe declines in revenues ever since BP’s massive oil slick overtook this part of the Gulf. According to a report by the Wall Street Journal, many small business owners in the tourism and seafood industry fear the year-old oil spill will put them out of business soon if visitors don’t return.

Small hotels, rental property owners, seafood restaurants, marinas, charter boat companies, fishing operations and other businesses, which employ millions of people in the Gulf coast and attract billions of dollars in revenue, are reporting “bruising declines in business” compared to a year ago, according to the Wall Street Journal.

The financial implications of BP’s oil spill are staggering because there are very few big corporate employers in the area. Small, non-farm companies heavily dependent on tourism and fishing account for more than half of the region’s gross domestic product. In fact, all but three percent of the Gulf region’s businesses employed fewer than 20 people, and those are the businesses that are hurting the most.

Before BP’s oil spill, for instance, Gulf fishermen harvested more than one billion pounds of seafood worth $520 million. Fifty-five thousand hotels supported 1.2 million jobs and brought in more than $95 billion in travel spending and millions in tax revenue. But in the first half of this year, 75 percent of these small businesses continued to experience steep declines in revenue. Sadly, many of these same businesses were still trying to recover from Hurricane Katrina’s destruction when the BP oil spill hit. Now many don’t know if they will last through the peak summer season.

Some business owners told the Wall Street Journal that they have been operating in the red since the spill and that business continues to be down as much as 96 percent. In addition to damaging hundreds of miles of environmentally sensitive land, the BP oil spill also ruined many people’s perceptions of the Gulf. Those who aren’t scared away completely often express a fear of the local seafood by avoiding it at restaurants or throwing their catch back in the water on fishing excursions.

The Wall Street Journal reports that the only areas that experienced higher revenues and lower unemployment rates since the oil spill were those that played host to an influx of cleanup crews.