Following is an interview I gave to a Colorado-based magazine editor who was interested in how Gulf Coast businesses are now faring one year after the BP oil spill.
RBO (The magazine) The fate that has befallen the residences and businesses of the Gulf Coast the past five years is really unprecedented. We checked in with William Bruce, a broker with Sunbelt Business Brokers, Mobile AL office, to see how the tourist industry and business for sale markets are faring one year after the latest tragedy, the BP oil spill.
RBO: How badly did the spill effect the 2010 tourist season?
WB (William Bruce): The spill cut the number of summer visitors to the area by 40 percent according to the visitors bureaus in the area. The effect on the tourist related businesses was particularly dramatic when you realize that most of their yearly income is made during the summer. So a lot of businesses saw a 60 to 70 percent drop in annual revenue.
RBO: Was the media hype accurate or overblown concerning the extent of the spill on the shoreline, or its effect on the economy?
WB: The actual damage was bad enough, but media accounts had most out-of-staters thinking that the beach was one solid mat of tar, which just wasn’t the case.
RBO: Did this cause a lot of resort area businesses to go under?
WB: Very few businesses went under. Most struggled through it with disaster payments from BP. Without the payments from BP, I’m afraid we would have lost a ton of small businesses.
RBO: Did you see a change in the volume of listings of businesses for sale or significant price reductions?
WB: We really didn’t see much in this regard. Some owners talked to us about selling, but I think most owners realized it would be futile to try to sell the business in the middle of the crisis. This was also during the worst national economic decline in our lifetime, so that and the spill were a double whammy on the Gulf Coast businesses.
RBO: How has the 2011 spring/summer tourist season been so far?
WB: The Gulf Shores/Orange Beach Visitors Bureau just released data showing a record number of visitors so far this season. It’s been the best summer ever. There must be some pent up demand expressing itself.
RBO: What’s the present state of the market for businesses for sale in Gulf Shores/Orange Beach areas?
WB: We are experiencing a high level of buyer inquiries. We need good listings, which we’re short on at the moment. Financing is still a bottleneck, with transactions in which seller financing is a component having the best chance of sale. However, financing availability generally seems to be improving. I actually had a banker call on me this week soliciting business acquisition loans. That hasn’t happened in years!
RBO: Thanks William. Any last thoughts?
WB: The business owners along the Central Gulf Coast are a hardy lot. In 2004, Hurricane Ivan ripped them apart. Then the next year, Hurricane Katrina devastated the area. In 2007, the Great Recession descended upon them and lasted for years. To top it off, the BP oil spill last year cut their revenue in half. You get the feeling that they have some kinship with Job of biblical times. As I recall, though, Job was eventually restored to prosperity. They will be, too.