New Orleans' tourism blues

/ Source: Forbes

With New Orleans Mayor C. Ray Nagin estimating the city's death toll could go as high as "thousands" after Hurricane Katrina swept through Monday night, tourism officials have their eye on the wider implications of the immobilization of one of the nation's biggest cities for tourism--for leisure as well as business travelers.

"Visitors to New Orleans spend $5 billion per year, and 40% of that number is convention and meeting business," says Donna Karl, vice president of client relations for the New Orleans Metropolitan Convention and Visitors Bureau, who spoke from Chicago, where she had been forced to evacuate. "Tourism is the No. 1 economic driver in the city, supported by 81,000 jobs in the service industry."

Karl estimates that New Orleans loses half a billion dollars in visitor spending for every month that the city is not operational, and it's facing several months of inactivity now.

"For September, October and November, tourism to New Orleans will be crippled for sure," says Bobby Bowers, a vice president at Smith Travel Research, a Tennessee-based information provider to the lodging industry. He says that room revenue for those three months last year exceeded $268 million--and that's not including spending on meetings, food and beverages, and leisure activities.

As of July 2005, New Orleans had 12-month hotel room revenue of more than $1 billion. But now, almost all of the city's 265 hotels--including major chains such as Marriott (nyse: MAR - news - people ), Hilton (nyse: HLT - news - people ), Fairmont (nyse: FHR - news - people ), InterContinental (nyse: IHG - news - people ), Starwood (nyse: HOT - news - people )-owned W Hotels, Holiday Inn and Wyndham (nyse: WBR - news - people )--and 38,633 rooms, many of which have been destroyed or left inoperative, will be vacant in the coming several months as scheduled conventions and seminar attendees to New Orleans are forced to make alternate plans.

So where will they go?

"For those that had planned to go to New Orleans," says Bower, "you're looking at convention markets in Las Vegas, Orlando, Chicago and San Diego"--all cities whose large hotel offerings and conference venues landed them in the top ten on the Washington, D.C.-based Travel Industry Association of America's top ten cities for convention, conference and seminar travel. (New Orleans is tenth on that list. Click here for the complete top ten.)

To be sure, there is no shortage of convention centers around the country, but few other cities have historically offered the culture, history and joie de vivre of the Crescent City.

Karl and her colleagues have had their hands full helping facilitate last-minute venue changes for groups like the American Society for Microbiology and the National Electrical Contractors Associations, who had planned to come to New Orleans for fall conferences. The Academy of Medical Surgical Nurses, scheduled to attend their annual convention Oct. 26 in New Orleans, have already rescheduled to the Las Vegas Hilton after the Hyatt Regency New Orleans, their original venue, was significantly damaged, with walls and windows blown out. Hundreds of guests had to be evacuated to a ballroom during the storm.

"New Orleans is in a toxic soup. The lake overflowed, rendering infrastructure unstable, and the people who died are literally floating around in it. What we're trying to do first is deal with basic human needs: potable water, food, air-conditioning, power, telecommunications and medical care," said Steve Richer, executive director of the Mississippi Gulf Coast Convention and Visitors Bureau, when asked how long the city's tourism sector could take to recover. He was speaking from Florida, where he had been forced to evacuate.

Karl was more optimistic. Although a notice posted on the New Orleans Convention and Visitors Bureau Web site said the September citywide meeting calendar had been canceled and October meetings may be as well, and damage for New Orleans is initially estimated at $25 billion, Karl says all is not lost.

"The good news is that the city's main business districts--the French Quarter, central business district, convention center area and warehouse areas--were impacted far less and will be the first to return to normal," because they are higher above sea level, says Karl. She adds that New Orleans Louis Armstrong Airport will reopen Nov.1.

Karl's optimistic message to tour operators, convention planners and vacationers alike? "Come on back," she says. "We're going to be bigger and better."