August 31, 2005
Hurricane Katrina Blows Away ‘Big Easy’ Tourism
NEW YORK -- Hurricane Katrina, which tore through Louisiana killing hundreds of people and leaving more than 80 percent of New Orleans underwater, also blew away the state's biggest source of revenue -- tourism.
New Orleans, most of which lies below sea level, drew more than 10 million visitors last year, creating 80,000 tourism- related jobs. But with most of the city underwater, the short- term prospects for the French Quarter and other hot spots are muddy.
"The hurricane will have a far-reaching impact on the tourism business," Marshal Cohen, chief industry analyst at the NPD Group, said in an interview. "And New Orleans is all about tourism. It's based on tourism. It will take at least six months before we see any signs of recovery on that front, if not more."
The storm, which has flooded the city and will paralyze it for weeks at least, has caused an estimated $25 billion in damage in three states.
But it could cost New Orleans -- home to some of the nation's biggest conventions and festivals -- billions of dollars more in lost revenue from tourism, as hotels and airports remain closed and conventioneers remain uncertain about the location of future events.
The Morial Convention Center in New Orleans is one of the largest meetings facilities in the nation, with more than 1.1 million square feet of exhibit space. The hurricane came just before autumn, which is the center's busiest convention season. More than 40 conventions are listed on its Web site.
The National Business Aviation Association is set to hold its annual convention in New Orleans on November 15-17, an event that drew more than 31,000 last year.
The organization said it will closely monitor developments over the coming weeks and will assess the conditions at the convention center, airport, surrounding hotels and restaurants, transportation infrastructure and other infrastructure required for the event.
The New Orleans Convention Center booked several other major events, including the annual convention for the AARP, an organization for people age 50 and over. The event is scheduled for late September, but a person familiar with the situation says the 15,000 AARP visitors may move the convention to Anaheim, California.
The Anaheim and Orange County Bureau said they did receive a call from people interested in changing their convention venue from New Orleans, but refused to disclose further details.
The Georgia World Congress Center and the Atlanta Convention & Visitors Bureau said at least five groups have called them to see if the city could handle their business on short notice.
Domestic and international travelers directly spent almost $10 billion in Louisiana in 2004 and that spending generated 121,100 jobs within the state. Without those jobs, the state's unemployment rate would have been 11.6 percent, which is 5.9 percent higher than it was.
"Every day they lose tourism, most people are losing wages. Most of their jobs are tourism-based," Cohen said.
Flood waters are still rising in New Orleans as breaches in the city's levee system allowed the Mississippi River to overflow into the city, some of which lies as much as 20 feet below sea level. Roads and bridges have been washed away entirely, with city officials saying all the infrastructure will have to be rebuilt.
The city also hosts festivals such as Mardi Gras and the Jazz & Heritage Festival -- which draw hundreds of thousands of visitors every year.
Louisiana's football team, the New Orleans Saints, is scheduled to have this season's first home game on September 18. The team is scheduled to have eight games on home turf this season, events that typically attract millions of dollars to the state.
"Games over the next two months will definitely have to be moved elsewhere, and maybe even after that. The water service, roads, utilities, everything has to be fixed," Cohen added.
All three major U.S. hotel companies -- Marriott International Inc., Starwood Hotels & Resorts Worldwide Inc. and Hilton Hotels Corp. -- have closed their properties in the region.