N.O.'s $5B tourism biz in tatters

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Hurricane Katrina has devastated the $5 billion tourism industry in New Orleans-the biggest source of revenue in the city and the state of Louisiana. More than 100 conventions scheduled for the next two months were forced to cancel or relocate, and New Orleans' National Football League franchise is likely to play its entire upcoming schedule in another city.

While the rest of the country prepared for the peripheral effects of Katrina in the form of rising gas prices and likely fare increases from the already-struggling airlines, New Orleans and the nearby Mississippi casino/beach resorts of Gulfport and Biloxi are closed for business.

New Orleans drew more than 10 million visitors last year, according to the Metropolitan Convention and Visitors Bureau, and exec VP Kitty Ratcliffe said that every convention booked in the next 60 days "has been notified that we will assist them in relocating to another city or rescheduling in New Orleans at a later date."

That's 122 conventions in all with 188,925 expected attendees. The Specialty Graphics Imaging Association canceled its Sept. 28-Oct. 1 event, affecting 14,000 people, after trying to move the convention to Atlanta. The National Association of Insurance Commissioners' Fall National Meeting, which was to be held Sept. 10-13 and featured former VP Al Gore as the keynote speaker, was also canceled. AARP, and its 20,000 expected attendees, is desperately trying to reschedule its Sept. 28-Oct. 1 convention.

According to the publication Tradeshow Week, New Orleans ranks fifth in convention market share at 6%, behind Las Vegas, Chicago, Orlando and New York.

The major hotel chains, including Hyatt, Marriott and Starwood, are not accepting reservations in the affected areas, and Hyatt has canceled all business at its New Orleans hotel through Nov. 15, a spokeswoman said.

TRANSFERABLE LOSSES

New Orleans employed more than 84,000 people in the tourism industry and annually took in $5 billion, half of the state's tourism total. In Mississippi, the 12 casinos in the Gulfport/Biloxi area employ 14,000 people and account for $2.7 billion in revenue, behind only Las Vegas ($10.3 billion) and Atlantic City, N.J. ($4.8 billion) in gaming revenue, according to the state's Visitor's Bureau. One estimate had the state of Mississippi losing $500,000 a day in tax revenue for each day the casinos remain closed.

While some of the hotel chains are optimistically shooting for a November return to business, Deutsche Bank gaming analyst Marc Falcone and NPD Group tourism analyst Marshal Cohen both said it will be well into 2006 before the areas bounce back fully.

Part of New Orleans' tourism draw stemmed from its NFL team, the Saints. But the Superdome, which has also hosted six Super Bowls and was put to use as a shelter for refugees, was damaged by Katrina. The eight home games a year bring in millions of dollars per game to New Orleans, with revenue to the city coming from everywhere: hotel rooms, restaurants, car rentals, surcharges on tickets, even parking garages.

Many of those losses appear to be transferable. Though nothing was definitive at press time, talk in the NFL was that the Saints would play home games in either San Antonio, Texas, or Orlando, Fla., although the franchise was hoping to work out a deal with Louisiana State University, 90 miles to the north, to use 95,000-seat Tiger Stadium. Other cities are lining up to take New Orleans' lost convention business, including Orlando. "We've put the offer out there to several of the clients that were planning to hold their meetings in New Orleans," said Danielle Courtenay, VP-public relations for the Orlando/Orange County Convention & Visitors Bureau.

While gas has gone above $3 a gallon in many parts of the country, hampering car travel, none of the nation's major air carriers have raised fares-yet. Katrina's damage to off-shore refineries did reduce fuel supplies by about 13% since Aug. 29, according to the Air Transport Association. But after the Labor Day holiday weekend, airlines traditionally reduce their fall schedules, which means a reduction in needed fuel as well.

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