Officials call for economic diversity in New Orleans

Posted on: January 26 2010 | Posted in: Latest News
Economic diversification will support rebuilding the tourism industry in New Orleans, say leaders of a special task force that this week released a $400 million master plan to reinvigorate tourism through 2018....

Officials call for economic diversity in New Orleans
by Diana Chandler, Contributing Writer, New Orleans City Business

Published: January 20th, 2010

Members of the city’s hospitality industry parade down Canal Street last year during National Travel and Tourism Week in May.

Economic diversification will support rebuilding the tourism industry in New Orleans, say leaders of a special task force that this week released a $400 million master plan to reinvigorate tourism through 2018.

“We absolutely recognize, support and applaud the need to do more than just tourism in this city,” said Darryl Berger, co-chairman of the New Orleans Strategic Hospitality Task Force and owner of The Berger Co.

“That said, tourism is by far the leading thing we do … and the lowest hanging fruit because we know how to do it so well.”

Berger said such diversification will hinge on the major economic engines of a regional biomedical corridor, the Port of New Orleans and the oil and gas industry, in addition to tourism.

Lt. Gov. Mitch Landrieu, who commissioned the task force in April, said the plan to revive tourism comes at a perfect time to enhance a long-proposed New Orleans Economic Development Council and the accompanying proposal to stimulate the economy.

Mayor Ray Nagin supported establishing an NOEDC public-private partnership in 2008 but withdrew support for it last year, citing a lack of diversity among nominees for the governing board.

“It’s almost a perfect fit,” Landrieu said.

Of those economic engines, Landrieu said, the state’s $10 billion tourism industry is a natural starting point.

The hospitality task force released an eight-year plan aimed at positioning New Orleans as a world-class tourist destination, increasing the number of visitors here from the current 7.6 million a year to 13.7 million annually by 2018, the city’s tricentennial.

Such an increase would create an estimated 33,000 new jobs, $700 million in incremental taxes and $11 billion in incremental spending, the task force said, relying on an analysis by Louisiana State University’s School of Economics and the University of New Orleans.

The tourism industry supports 144,000 jobs throughout the state, Landrieu said.

The task force will need to raise $400 million over the next eight years to fund the plan and will focus on public and private funding, including state and federal money, grants and incremental taxes, Berger said.

Key to the master plan is refocusing the management of the tourism industry by merging the New Orleans Metropolitan Convention and Visitors Bureau and the New Orleans Tourism Marketing Corp. into one governing body by March. The new group basically will be a marketing engine, said task force co-chairman and SMG Senior Vice President Doug Thornton, working to restore New Orleans’ post-Katrina image as a city whose hospitality industry is “100 percent recovered,” countering still prevalent images of massive flooding and crime.

The master plan focuses on both leisure and business tourism. New Orleans suffered a 25 percent decline in leisure travelers and a 24 percent decline in business travelers in 2008 compared with 2004 figures.

The task force commissioned a study by the Boston Consulting Group, which named many barriers keeping tourism numbers below the pre-Katrina level of 10.1 million visitors in 2004.

Among the group’s findings, potential visitors cite crime and safety as the greatest barrier to choosing New Orleans as a destination; the French Quarter falls short in the areas of safety, cleanliness and public infrastructure; Canal Street is struggling financially; and New Orleans has few repeat visitors. Only 16 percent of visitors return here, the study found.

In addition to merging the NOMCVB and the NOTMC, the consulting group recommends building a world-class work force and community.
 Berger agreed that economic diversification will be beneficial in rebuilding the economy, fighting crime and revitalizing the French Quarter and Canal Street.

He said the task force will work with the New Orleans Chamber of Commerce, the city of New Orleans and other entities to improve the economy, beginning with tourism.

BCG said it found tremendous potential in New Orleans’ riverfront, recommending new development there comparable to San Antonio’s River Walk, Baltimore’s Inner Harbor or Chicago’s Millennium Park, a near 25-acre award-winning site featuring art, music, architecture and landscape design.

The $400 million price tag for the eight-year plan does not factor in the costs of riverfront development but allots about $330 million for capital improvements and the remainder for rebranding.

Without implementing the master plan, the NOTMC has a 2010 budget of $7.2 million.

The 18-member task force is comprised of business, entertainment and cultural leaders who will now work to implement the master plan.
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