Financial Times

April 27, 2006

Budding branches on mansion-lined Saint Charles Avenue are not the only sign of renewal in New Orleans. Spring brings the sound of live music blasting from bars in the French Quarter. A bride and groom pose for photographs in front of sun-dappled Jackson Square. Steps from the Mississippi River, the famed Cafe du Monde is filled with customers munching beignets, the distinctive New Orleans doughnut.

 

The city’s tourist areas were largely unscathed by Hurricane Katrina and, as contracts with relief and recovery workers expire, hotels are filling with guests in town for weddings, cultural festivals and other springtime events.

 

But the industry still faces big hurdles. Restaurants, hotels and shops are struggling to lure back employees. “Help wanted” signs are ubiquitous but lack of housing is keeping workers from returning. As a result, business hours and service at shops, museums and restaurants are more limited.

 

Nevertheless, tourism authorities are trying to spread the word that New Orleans is open for business even as the grim task of recovery continues in districts ravaged by floodwaters unleashed by Katrina.

 

“People don’t realise that being a visitor to New Orleans is the best way to help the city’s recovery,” said Kim Priez at the Convention and Visitors Bureau.

 

Tourism is the city’s biggest industry, generating Dollars 5bn (Euros 4bn, Pounds 2.8bn) in visitor spending and accounting for 81,000 jobs in 2004, according to the bureau. It is a sign of optimism that several big business conventions are holding their scheduled meetings this spring. Sales are brisk for Dollars 30 tickets to New Orleans’ pre-eminent Jazz Fest, being held over the next two weekends. Organisers hope this year’s star line-up, including Bruce Springsteen, Bob Dylan, Fats Domino and Etta James, will attract big crowds. Jazz Fest traditionally draws nearly 500,000 visitors, who bring in business worth Dollars 400m-Dollars 500m.

 

David Oestreicher, of the New Orleans Jazz & Heritage Festival and Foundation, admits that the “biggest misconception is that people think New Orleans isn’t ready”.

 

Louisiana launched a Dollars 7m print and television advertising campaign last month featuring New Orleans luminaries such as celebrity chef Emeril Lagasse and musician Wynton Marsalis. But the budget is limited. Images of New Orleans as inhospitable and ravaged still persist across the US.

 

“You may still see us in boats on CNN but this is not what’s happening today,” said Ms Priez. “It’s a tough message to get across.”

 

Out of 38,000 hotel rooms in New Orleans, 25,000 are open but 10,000 of those are contracted to workers rebuilding the city. While occupancy rates have been high because of relief workers, many hotels are trying to shift business to tourists, who are the backbone of sustainable business.

 

Andy Jacobs, the manager of the Best Western Saint Charles Inn, turned down a two-year contract to house US military personnel. He had prior commitments to customers who had booked rooms for weddings and festivals. “This was my father’s hotel for 28 years,” said Mr Jacobs. “We couldn’t cancel the rooms reserved for weddings.”

 

David Kong, the chief executive of Best Western, said the return of tourists was encouraging yet he is concerned by the slow pace of recovery caused by bureaucracy and lack of organisation. About 20 per cent of employees have returned to the chain’s properties in New Orleans.

 

Costs are also up: in addition to rising wages, construction costs have risen and insurance settlements do not cover the cost of rebuilding. “Hotel owners are just absorbing the cost,” he added.

 

Harrah’s, the world’s largest casino operator, offered housing and cash bonuses to gather enough staff to re-open its casino near the French Quarter just before Mardi Gras. A chunk of funds raised by Jazz Fest is devoted to building a village to house hundreds of musicians returning to New Orleans for the festival. Now organisers are hoping for some tourists to join them.

Budding branches on mansion-lined Saint Charles Avenue are not the only sign of renewal in New Orleans. Spring brings the sound of live music blasting from bars in the French Quarter. A bride and groom pose for photographs in front of sun-dappled Jackson Square. Steps from the Mississippi River, the famed Cafe du Monde is filled with customers munching beignets, the distinctive New Orleans doughnut.

The city’s tourist areas were largely unscathed by Hurricane Katrina and, as contracts with relief and recovery workers expire, hotels are filling with guests in town for weddings, cultural festivals and other springtime events.

But the industry still faces big hurdles. Restaurants, hotels and shops are struggling to lure back employees. “Help wanted” signs are ubiquitous but lack of housing is keeping workers from returning. As a result, business hours and service at shops, museums and restaurants are more limited.

Nevertheless, tourism authorities are trying to spread the word that New Orleans is open for business even as the grim task of recovery continues in districts ravaged by floodwaters unleashed by Katrina.

“People don’t realise that being a visitor to New Orleans is the best way to help the city’s recovery,” said Kim Priez at the Convention and Visitors Bureau.

Tourism is the city’s biggest industry, generating Dollars 5bn (Euros 4bn, Pounds 2.8bn) in visitor spending and accounting for 81,000 jobs in 2004, according to the bureau. It is a sign of optimism that several big business conventions are holding their scheduled meetings this spring. Sales are brisk for Dollars 30 tickets to New Orleans’ pre-eminent Jazz Fest, being held over the next two weekends. Organisers hope this year’s star line-up, including Bruce Springsteen, Bob Dylan, Fats Domino and Etta James, will attract big crowds. Jazz Fest traditionally draws nearly 500,000 visitors, who bring in business worth Dollars 400m-Dollars 500m.

David Oestreicher, of the New Orleans Jazz & Heritage Festival and Foundation, admits that the “biggest misconception is that people think New Orleans isn’t ready”.

Louisiana launched a Dollars 7m print and television advertising campaign last month featuring New Orleans luminaries such as celebrity chef Emeril Lagasse and musician Wynton Marsalis. But the budget is limited. Images of New Orleans as inhospitable and ravaged still persist across the US.

“You may still see us in boats on CNN but this is not what’s happening today,” said Ms Priez. “It’s a tough message to get across.”

Out of 38,000 hotel rooms in New Orleans, 25,000 are open but 10,000 of those are contracted to workers rebuilding the city. While occupancy rates have been high because of relief workers, many hotels are trying to shift business to tourists, who are the backbone of sustainable business.

Andy Jacobs, the manager of the Best Western Saint Charles Inn, turned down a two-year contract to house US military personnel. He had prior commitments to customers who had booked rooms for weddings and festivals. “This was my father’s hotel for 28 years,” said Mr Jacobs. “We couldn’t cancel the rooms reserved for weddings.”

David Kong, the chief executive of Best Western, said the return of tourists was encouraging yet he is concerned by the slow pace of recovery caused by bureaucracy and lack of organisation. About 20 per cent of employees have returned to the chain’s properties in New Orleans.

Costs are also up: in addition to rising wages, construction costs have risen and insurance settlements do not cover the cost of rebuilding. “Hotel owners are just absorbing the cost,” he added.

Harrah’s, the world’s largest casino operator, offered housing and cash bonuses to gather enough staff to re-open its casino near the French Quarter just before Mardi Gras. A chunk of funds raised by Jazz Fest is devoted to building a village to house hundreds of musicians returning to New Orleans for the festival. Now organisers are hoping for some tourists to join them.