Gulf Coast dealers optimistic five years after oil spill

The Deepwater Horizon oilrig exploded in April 2010, setting off an 87-day spill of millions of gallons of oil into the Gulf of Mexico. The story dominated the news cycle for months and is known as one of the worst environmental disasters in U.S. history.

Recovery was not easy for boat businesses in the area, as the spill occurred during a challenging economy from which the marine industry was working to rebound. For some businesses, it disrupted what could have been a potential upswing coming out of the recession.

“We really felt like we were starting to recover from the recession: Our sales were up, our service business was up, our marina traffic was up. And then when the BP oil spill happened in April of 2010, all that just shut right back off,” said Shawn Talpey, general manager of Legendary Marine, a Boating Industry Top 100 Hall of Fame dealer. “It certainly delayed our recovery from the recession.”

When the spill occurred, M. Keith King, owner of Ocean Marine Group, Inc., in Ocean Springs, Miss., worked with his CPA for a year to navigate the claims process through BP, whom he says controlled what would inevitably be the outcome.

“Without the claims process being handled the way that BP handled it, we would not have survived,” King said. “To BP’s credit, they gave me partial payments that provided the cash flow that we needed to stay open. … They made me whole as if there had not been a spill and we had our normal business.”

While it is difficult to quantify what is considered a “full recovery,” particularly because the spill occurred during such a deep economic downturn, both businesses would say they have seen improvements over the past five years.

“We are seeing a resurgence in business this year, and there obviously are many factors that play into upswings and downturns in our industry,” said King. “People have sat on their hands for quite some time and we’re seeing this year an eagerness to get back to life as normal and as a result, we’re having record sales compared to the last five years.”

What hurt many of the marine businesses on the Gulf Coast the most was perception. While the spill was undeniably catastrophic, Talpey says the media exaggerated a lot of the issues in Legendary Marine’s particular market, which serves Destin, Fla., Fort Walton Beach, Fla., Panama City Beach, Fla., and Gulf Shores, Ala. While all of the locations faced negative effects from the spill, the Florida locations experienced very little, if any, wash-up on their shores.

However, public perception from the 24-hour news cycle often dominated how potential customers reacted, which was significant for a dealership in a market where much of the business comes from tourism.

“If you’re in one of those outside markets … and you were considering traveling down to your vacation home, the images that you saw, either in the newspaper, on TV or online, showed that pelican covered with oil and that wave of oil crashing up on the beach. It was exaggerated tremendously and probably created more fear in the customers’ and our employees’ minds than there needed to be at the time,” said Talpey.

As a result, the dealership’s first reaction was to ensure its employees were given all of information Legendary Marine had about the spill and its effects on the dealership, as well as helping with any individual claims the employees were filing. The dealership told its employees to offer that same transparency and care to its customer base.

“There were still many days that our clients could go out and enjoy their time on the water here, particularly in the day,” said Talpey. “and in those areas where the waters were not closed.”

In order to stay afloat, marine businesses had to get creative to account for the loss of new boat sales.

Dan Bair, co-owner of Quality Boats of Clearwater, said the dealership’s market area is far enough away from where the spill occurred that it was not as impacted by the spill as other businesses. The dealership continued its cruise club and fishing tournaments  and did its best to keep customers informed that there was no reason not to use their boats.

“We tried to buck the public perception that they couldn’t use their boats by having more on-the-water events,” said Bair.

Legendary Marine does brokerage and consignment sales, and because many people believed the boating climate would be down for a long time in the Gulf, the dealership was able to pick up many used boats, which Talpey said created several opportunities to take on business the dealership would not have had otherwise. Legendary Marine also placed particular focus on service during this time as well, picking up annual service work and conducting inspections for customers if they ran their boat through oil.

King said Ocean Marine Group found its biggest opportunities with parts and accessories sales. The dealership reached out to BP and some of its subcontractors to sell supplies to those who were on the water every morning.

“We sold a tremendous amount of anchors for the boats that they put out,” said King. “We tried to augment our parts and accessories with that being the only activity that was going on.”

Talpey said Legendary Marine’s approach was always to turn the negatives of the spill into positives, and one opportunity to do so was with its annual customer VIP celebration. This event usually occurs in springtime or early summer but was postponed in 2010.

When the party did happen in August 2010, the dealership turned it into a “capping of the oil rig” party. Talpey said attendance was very strong that year because customers could celebrate that there was no more oil spilling into the Gulf and things were going to get better for customers,marine businesses, fisheries, the beaches and the local economy as a whole.

“It was probably our most successful party from a standpoint of attendance [and] consumer confidence. It was just very well received by our employees, the marine industry and our customers,” said Talpey. “It was something very nice to focus on the positives after something that was just a very difficult season to get through both financially as well as mentally.”