Convention Center business down

Posted on: June 25 2009 | Posted in: Latest News
Revenue down, expenses rise

Thursday, June 25, 2009
By Jaquetta White, Times Picayune

Business writer


The board of the Ernest N. Morial Convention Center-New Orleans revised its budget Wednesday to show lower operating revenue and higher operating expenses than it had expected, the result of a decline in attendance at meetings and conferences this year.

"We're still doing events, but they've shrunk in terms of space used and attendance," said the facility's general manager, Bob Johnson. In January, for example, a meeting of the National Automobile Dealers Association drew only 60 percent of the attendees it typically does.

The revised budget shows operating revenue of $22.4 million, down from a projected $24.6 million. Meanwhile, projected expenses climbed to $34.1 million from $32 million. As a result, the center's income loss will grow to $11.7 million from a projected $7.8 million. The loss will be covered by the center's reserves, Johnson said.

The board always revises its budget six months into a fiscal year. Johnson said the projected budget was drafted in September or October, before the convention center could grasp the full scope of the recession.

Since then, meetings held in New Orleans have been smaller as Americans cut back on travel. With fewer visitors, the convention center has collected less money from user fees and food and beverage commissions.

The convention center expects to generate about $1 million less in user fees, including the hotel tax, than projected. Food and beverage receipts will likely shrink by a similar amount.

The revised budget also shows an increase in insurance, payroll taxes and benefits. Johnson said the convention center is trying to absorb the revenue decline by cutting back on some expenses, like utilities, and by booking last-minute events.

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