Fourth of July Tourism Hit Hard by Oil Spill in Gulf of Mexico

(July 4) -- Hotel occupancies are down and disappointment over the oil spill is high this Fourth of July in the Gulf of Mexico, where beaches once packed with bathing suit-clad tourists are now filled with cleanup crews in hazmat gear.

During a holiday weekend that has long been a highlight of summer tourism along the gulf, the industry is hurting as out-of-town guests decide against making the trip to hotels, restaurants and bars dotting a coast where oil now washes ashore.

Hotels and inns from Alabama to the Florida Panhandle have reported at least 50 percent dips in occupancies and spikes in cancellations in the wake of the Deepwater Horizon spill.

"People that drive over from New Orleans or down from Atlanta, we're probably not seeing as much of that traffic," Gary Doyle, manager of Crabs We Got Em restaurant in Gulf Breeze, Fla., told AOL News. "Hotels aren't as full. The condominiums are not all rented."

As BP officials test the effectiveness of a jumbo skimmer in cleaning the oily waters, tourists spooked by the spill continue to cancel their reservations at Henderson Park Inn in Destin, Fla., where general manager Ryan Olen estimates the spill has cost him $200,000.

"I've got a wife, an 18-month-old son and another kid on the way," Olen told CBS News. "It's a scary feeling."

Destin motel owner Kathi McGowan said she is 75 percent booked over the Independence Day holiday weekend but concerned over a lack of reservations for the rest of the summer.

"They call and say, 'Sorry, Kathi. I don't want to take a chance there might be oil on the beach,' and golly I don't blame them," McGowan told The Associated Press.

Holiday weekend activities like fishing have also been hampered by concerns over the spill. One-third of all federal waters in the gulf are closed, even in areas where oil has yet to be spotted.

Federal scientists have predicted there is an 80 percent chance the oil could slip into the gulf's Loop Current, which would send it rapidly coursing towards points on Florida's eastern coast, including two tourist destinations -- Miami and Ft. Lauderdale.

Dauphin Island, Fla., real estate agent Amy Vice told ABC News her vacation rental business is down about 90 percent as she sifts through daily cancellations.

"I'm afraid of what's gonna happen is when it is cleaned up ... people won't come back," she said.

Despite the grim picture at many popular beach sites, vacationers and locals are managing to enjoy the holiday traditions of fireworks and fun.

"We know we're a little bit down but we're still having a great summer so far," Nina Gonzalez, manager of Lulu's restaurant in Gulf Shores, Ala., told AOL News.

Gonzalez said Lulu's owner, Lucy Buffett, sister of musician Jimmy Buffett, urged tourists not to be scared away by the oil spill.

"Lucy said to come," Gonzalez said. "So we're here."