‘Out of control.’ Coast businesses say nothing prepared them for this year’s spillway disaster
They’ve survived hurricanes, the Great Recession, the BP oil spill.
But nothing prepared Mississippi Coast businesses for what happened this year, when all the beach waters closed for a potentially toxic algae bloom during peak summer tourist season.
As a new year and a new decade are about to start, many are still reeling from the effects.
An oyster restaurant closed and re-branded in just two weeks. Beach vendors were out of business for months. Much of the fishing, seafood and charter boat operations shut down for the season.
“This is by far the weirdest situation I ever had to deal with,” said Thomas Genin, who’s been in the Coast restaurant business since 2002. “The negative attention spiraled out of control.”
In mid-April, he opened RAW oyster bar and restaurant in downtown Ocean Springs after moving it from Bay St. Louis. Business was so good, he said, he needed two full-time oyster shuckers to keep up with orders.
Then beach advisories were issued, warning people to stay out of the water as the Mississippi River’s fresh water flooded the Mississippi Sound, drastically lowering salinity and killing oysters and other seafood. It was the first time the Bonnet Carré Spillway was opened in consecutive years, and the first time it was opened twice in one year.
It quickly brought an end to Genin’s oyster restaurant, he said.
In June, Mississippi Department of Environment Quality warned that seafood from Mississippi Sound wasn’t safe to eat. Although the state countered that message in July, Genin said nobody wanted any kind of raw seafood. He was forced to quickly come up with a new concept, and in less than two weeks open The Shrimp Factory, featuring overstuffed po-boys and Coast favorites.
What should have been a really good summer with no hurricanes instead was one of great challenge. Cheeseburger and chicken wing sales were brisk at his restaurants, Genin said, but oysters weren’t even on the menu.
“I’m ready for 2020,” he said.
Game changer
Already planned for 2020 is $700 million in new attractions and hotels on the Coast, including the opening of the Mississippi Aquarium in Gulfport. Even with the positive development, the local tourism industry needs to get beyond the financial hit of 2019 and the perception the water and seafood aren’t safe.
Business was up at Sharkheads and Souvenir City in early spring, said J.J. Pierotich, who has operated Biloxi souvenir stores with his family for 45 years. They planned to build a warehouse behind Souvenir City and a second Sharkheads on U.S. 90 at Lameuse Street in Biloxi, across from Hard Rock Casino.
“The algae bloom took care of some of our cash flow,” he told the Biloxi Development Review Committee, and it downsized plans for the new Sharkheads.
“It’s a short season in this kind of business,” he said, and it all comes at the same time in the spring and summer. That’s why they need a warehouse to quickly restock T-shirts and souvenirs, he said, and why the decline in tourists at his busiest time of the year was such a hit.
It was the first time they’ve ever had layoffs in July, he said. Teens who work at the souvenir shops every summer from high school through college didn’t have that work or income this year, he said.
The advisories were lifted after the spillway finally closed after a record 123 days. It came just in time for Cruisin’ The Coast in early October, which Pierotich said brought great sales numbers. Shoppers will be coming in for Christmas gifts and fudge, he said, and then between Christmas and New Year’s for souvenirs.
His family had to rebuild Sharkheads and Souvenir City after Hurricane Katrina in 2005. They overcame the national recession starting in 2007 and the oil spill in 2010. Now Pierotich said he’s optimistic for a strong 2020 as they get past the spillway disaster and expand the family business — if the spillway issues aren’t repeated next year.
How bad did it get?
Shrimp sales were down 60 percent, Genin said, and oysters, when they were available, were brought over from Texas. They were too large to eat raw, he said, and were very expensive. Even during Cruisin’ The Coast people weren’t ordering seafood, he said.
“Every restaurant I had on the Mississippi Gulf Coast was down,” said Genin, who owns The Blind Tiger in Biloxi and Bay St. Louis. Another location in Slidell, Louisiana, also was hurt by the closing of Lake Pontchartrain due to the flooding.
“The Blind Tiger in Biloxi suffered more than the Blind Tiger in Bay St. Louis,” he said. That’s because Biloxi has all the hotel rooms, he said, and the Bay gets more customers from the Coast and New Orleans. But regulars stopped coming from New Orleans, too, he said. A couple that typically vacations at a Biloxi casino a few times a year told him they stayed in New Orleans because they didn’t want to bring their grandchildren near the beach, he said.
From June to October, it felt like the whole Coast was flat in sales, Genin said. “It still is,” he said.
“The algae bloom did affect us,” said Kennedy Smith, vice president of marketing and hospitality at Harrah’s Gulf Coast in Biloxi. While casino revenue took a brief hit during the summer, “It was the national attention that people paid to this,” he said that really stung.
The resort uses the large database of Caesars Entertainment to attract customers it flies in from all over the country, he said. Perception is important.
Coast casinos also were hurt when Tropical Storm Gordon was forecast to hit South Mississippi on Labor Day weekend, Kennedy said. The storm track went east.
By the numbers
Revenue for the 12 Coast casinos is up $59 million for the year through October, the first full year of sports betting. But July’s revenue sunk $9.5 million, to $98.9 million from $108.4 million in July 2018. It was the only month this year Coast casino revenue fell below $100 million.
Sales tax revenue also was affected this summer. Mississippi Department of Revenue reported sales tax diversions were $9,000 below last year’s levels in Biloxi for June collections. July collections showed Biloxi’s sales tax revenue $165,000 below 2018 and Gulfport down $104,000.
Nine of the 12 cities saw smaller payments for July, which typically is one of the best months of the year. Collectively the Coast cities lost $304,000 for July, money that must be absorbed by the budget or covered with an increase in taxes or a decrease in services.
Comeback Coast
Four disasters in 14 years for South Mississippi is more than any other area of the country has had to deal with, local officials agree.
A report for the Mississippi Department of Marine Resources puts the loss to South Mississippi’s fishing industry and seafood restaurants this year at $169 million from the spillway opening.
The loss to Coast tourism was $33.5 million, said Milton Segarra, CEO of Coastal Mississippi, which promotes tourism in the three Coast counties.
While that is a “very humbling number,” he said, the industry ended the fiscal year ahead of 2018 in average price per hotel room, casino occupancy and number of air passengers. “Minimally, but ahead,” he said.
Coastal Mississippi already is working for 2020 and has partnerships with companies such as Expedia hotel booking website to help increase stays, he said. The organization hired a new PR and communications agency, Falhgren Mortine, of Columbus, Ohio, to deal with the outfall from the spillway opening.
“They have previous experience with water management crisis in other jurisdictions,” Segarra said, “and extensive experience in gaming destinations.”
Promotions have begun to entice visitors with a month-by-month highlight of an experience on the Coast. While the beaches are an attraction, Segarra said the Coast is a destination that can draw visitors with casinos, entertainment, museums, nature and adventure even when the water is off-limits.
“The big difference for Coastal Mississippi is that you can have a player come to one of our casinos, and have best time of his or her life without ever stepping one foot onto the beach,” he said. “The next weekend a family can come to the Coast and have the time of their lives and they didn’t step foot in a casino. That’s something not many destinations can offer.”
More fun to come
Segarra ticked off a list of new development that soon will add to the mix of hotels and attractions. In addition to the aquarium in Gulfport are new hotels in downtown Biloxi and Bay St. Louis, the expansion of the Walter Anderson Museum in Ocean Springs and new business in downtown Pascagoula, Long Beach and Pass Christian. “In each and every county we have something happening,” he said.
One of the most anticipated new attractions, an amusement park as part of a $200 million expansion at Margaritaville Resort Biloxi, is under construction in East Biloxi and will open in 2020 or early 2021.
“The Sky Bar and the Ferris wheel will be the two focal attractions,” said Kenny Glavan, area director of hotel operations at Biloxi Lodging. He expects the towering Ferris wheel to become an iconic symbol of the Coast and the Sky Bar to draw attention as the first ride of its kind in the U.S.
Reservations are being accepted for rooms at the new downtown Biloxi Hotel Legends, also operated by Lodging & Leisure Investments, starting in May. “That’s a telltale sign we’re getting close,” he said.
Timing wasn’t great when the company opened Centennial Plaza after a $100 million restoration at the end of this challenging summer. Glavan said they are looking forward to the waterpark reopening for the season in March to boost stays, and are booking events for next spring and summer.
What if it happens again?
Glavan, who also is a Biloxi councilman, said everyone has an eye on what will happen if the Bonnet Carré Spillway is opened for a long stretch again next year.
He’s concerned about the “echo effect” for tourists who were planning to visit South Mississippi last year. “I worry that maybe we lost their attention for next year,” he said.
That’s why it makes sense for Biloxi and other communities to join the Sound Coalition to fight to protect Coastal waters, he said.
“We can’t go through another of these man-made disasters when there are other options available. We need to find a way to share the burden,” he said.
“If it happens again next year we’re going to have a real problem,” said Genin, who joined the coalition and wrote his concerns to the Coast delegation in Washington.
“It will be exponentially negative,” he said, especially if people get out of the habit of coming to the Coast.
Oyster suppliers have already warned him what is going to happen to price and supply. In ideal conditions, it takes 2 and 1/2 to 3 years to grow oysters, he said. “That’s in ideal conditions,” he said. “Mississippi could be 3, 4 maybe 5 years out.”
People are still eating shrimp, especially if it is fried, he said, but the prices of Mississippi shrimp and crabmeat also are going to skyrocket. Genin said he used to complain when oyster meat went to $9 a pound. It will rise to $15 to $16 a pound, he said, making him wonder, “Are people going to pay $32 for an oyster po-boy?”
Genin said this latest disaster on the Coast has been a real eye-opener. “I had no idea how important, how big a really healthy beach environment is,” he said.
This story was originally published December 9, 2019 at 5:00 AM.
