New Orleans’ Tourist Business Dealing With the Big Difficult

Mardi Gras doesn’t arrive until Feb. 28, but every available hotel room here is already full.

Relief workers, FEMA contractors and utility employees have replaced the tourists and convention-goers who typically ply the French Quarter and Central Business District this time of year. In fact, with the Federal Emergency Management Agency planning to rent 20,000 hotel rooms, the inns of New Orleans are sold out for the rest of 2005, said Donna Karl, vice president of the New Orleans Metropolitan Visitors & Convention Bureau.

“The hotels should thank their stars for FEMA right now,” said Loren C. Scott, a New Orleans economist.

The big question is what happens next, or as Peter Menge, co-owner of the Savvy Gourmet cooking school and catering company in the Magazine Street shopping district asks: “Dude, where are my customers going to come from?”

Menge doesn’t think FEMA workers are going to spend a lot of time learning how to prepare the spicy Cajun sausage called andouille or brush up on their knife skills, the type of classes the Savvy Gourmet offers to visitors and locals.

The French Quarter escaped the worst of Hurricane Katrina’s damage, leading some experts to predict a relatively quick resurgence for the visitor industry, which drew more than 10 million people and generated nearly $5 billion last year.

“The tourists need to realize that we can bounce back from this,” Karl said. “Look at how well New York bounced back after 9/11.”

But images of a broken city threaten to turn away meeting planners and the party animals who frequented the French Quarter. In addition, the Crescent City’s fame as a tourist hot spot masked the fact that business hadn’t been all that great in recent years.

“Once FEMA and the displaced leave the hotels there will be a stigma there from the images of flooding and the corpses,” said Bobby Bowers of Smith Travel Research in Hendersonville, Tenn. “There will have to be a whole lot of marketing and education taking place if they are going to be able to sell that city again.”

That combination of convention-goers and casual travelers looking for a good time at events such as Mardi Gras and the New Orleans Jazz Festival are what has made this city’s tourism industry tick, regional economist Scott said.

The 1.1-million-square-foot convention center hosted 93 major conventions last year, placing seventh, just behind Atlanta on a ranking of North American cities by Tradeshow Week.

Because of the ample hotel supply -- about 38,000 rooms in the greater metropolitan area -- and well-regarded entertainment and restaurants, New Orleans fared especially well with big conventions, hosting 12 of the 200 largest trade shows in Canada and the U.S. last year, the industry journal said. That’s just two less than New York.

“The draw to New Orleans was a world-class entertainment experience with the jazz and the food, great airport access and good hotel capacity,” Tradeshow Week publisher Adam Schaffer said.

Yet, even the city’s strong convention position and its tourism reputation have concealed a slower market compared with other top tourist destinations.

Room occupancy, an important measure of the health of local lodging establishments, was tracking just under 68% prior to the storm, slightly higher than the 64% national average, Bowers said. Los Angeles hotels, by comparison, fill more than 76% of their rooms. New York fills more than eight out of 10 hotel rooms.

And New Orleans is likely to lose ground. The disruption caused by the one-two punch of Katrina and Rita has meeting planners scrambling for other sites. The American Bar Assn., for example, has moved its midyear meeting, planned for February, to Chicago.

“The last thing the Visitors & Convention Bureau wants is to have a customer go visit a competitor,” said Scott, adding that those who are interested in coming back will have “second thoughts” about when to come. “Who is going to book a big convention from June to the beginning of November, the hurricane months? Why take the risk?”

Karl, the visitors bureau’s vice president of client relations, doesn’t buy the argument that the threat of hurricanes will scare off future conventions. “It is no different than Chicago in the wintertime, where you could book a meeting and get caught in a terrible blizzard,” she said.

Already local restaurant industry officials are predicting that as many as 25% of New Orleans 3,000 eating establishments won’t make it back from Katrina. Those that do, along with others in the hospitality business, are unsure about where they will get employees.

“All my staff high-tailed it out of there and ran for home, some as far as Seattle and Tucson and Gaithersburg, Md.,” said Corbin Evans, the chef and owner of Lulu’s in the Garden.

“These industries are very labor intensive,” and much of that labor fled to other states, perhaps never to return, Scott said.

Many went to Texas, which ranks 32nd among all states in median per capita income, or to Colorado, No. 7. Louisiana lags behind in 47th place.

“These are all better economies,” Scott said. “When your apartment was destroyed and you have no belongings, people will follow the bucks.”

Mardi Gras will be one test of the city’s resilience, said Tiffany Adler of Coleman E. Adler & Sons, a 107-year-old New Orleans jewelry design firm and retailer.

The celebration, which typically attracts more than a million locals and tourists, will give the city the chance to demonstrate how it has rebuilt its tourism infrastructure and how it can handle large crowds.

“I think it will take a lot to dampen people’s enthusiasm for Mardi Gras,” Adler said.

Scott agrees, but still believes it will take years for the city to regain its luster, if it ever does. “Some of tourism will come back. There will be Mardi Gras and the festivals, but the conventions -- that’s the wild card.”

*

(BEGIN TEXT OF INFOBOX)

Building foundation

Here’s a look at New Orleans’ tourism infrastructure before the hurricane, in 2004 figures.

Total visitors: 10.1 million

Total visitor expenditures: $4.9 billion

Tourism tax revenue to state of Louisiana: $156.8 million

Hotels: 265

Hotel rooms: 38,338

Convention center meeting space: 1.1 million square feet

*

Source: New Orleans Metropolitan Visitors & Convention Bureau