As the local tourism industry gathered Tuesday to celebrate its contribution to the city’s economy, the president of the New Orleans Convention and Visitors Bureau warned that the industry is under assault.
Stephen Perry said a proposal up for a vote Wednesday in the state House of Representatives would put New Orleans at a “staggering disadvantage” compared with other tourist destinations.
“This industry and all of its allies from all parties and in all parts of the state have to work to kill this tax proposal,” Perry said. “We’ve got to come up with a better answer.”
At issue is House Bill 1083, which would levy an additional hotel tax of up to 1.75 percent on New Orleans properties. The tax increase is being pushed by Mayor Mitch Landrieu, who said the city needs the money to relieve its budget crunch.
The tax increase would need the approval of the City Council and local voters to go into effect.
Perry’s comments came during the local tourism industry’s observation of National Travel and Tourism Week.
Hospitality industry workers, marching bands, Mardi Gras Indians and a cast of other characters paraded down Poydras Street from the Loews Hotel at the Piazza d’Italia to Champions Square on Tuesday morning to raise awareness of the industry’s contributions to the local economy.
The local tourism industry employed more than 78,000 people and generated $7.47 billion in visitor spending last year, the highest total in nearly 10 years, according to the visitors bureau.
Perry said a tax increase would threaten that growth. It would give New Orleans a 50 percent higher tax on hotel rooms than Orlando and Las Vegas, two of the cities New Orleans most often competes with for conventions, he said. Hotel taxes in New Orleans would be second only to those in New York, he said.
The higher hotel tax could also make it more difficult for New Orleans to win the right to host major sporting events such as the Super Bowl and the NCAA Final Four tournament, he said.
“That’s a staggering competitive disadvantage,” Perry said.
The city is trying to find ways to obey a court order to pay an additional $17.5 million into the Firefighters Pension and Relief Fund and possibly $22 million to improve conditions at the parish jail, plus millions more to implement the Police Department consent decree.
Legislators on the House Committee on Municipal, Parochial and Cultural Affairs passed the tax proposal 7-6 last week. “If you want the people of New Orleans to stand on their own two feet — which we’re happy to do ... we need the resources,” Landrieu told the committee before the vote.
The Landrieu administration has suggested that the hospitality industry substitute the proposed tax increase for the 1.75 percent self-assessment that Orleans Parish hotels agreed to charge their guests beginning in April to help pay for tourism marketing efforts worldwide and infrastructure improvements in the French Quarter.
Perry said eliminating that assessment would cut the visitors bureau’s marketing budget by 45 percent and force it to lay off some of its sales team.
“We don’t just object — we are vehemently, down to the core of our soul and bones, opposed — to a proposal that would damage the economy and cost us jobs,” Perry said.
He said he would like to work with the city on another solution to its budget problems, perhaps one that involves contributions from a variety of businesses and industries.
According to a survey released last month by the University of New Orleans Hospitality Research Center, the number of people visiting New Orleans rose to nearly 9.3 million in 2013. The total — boosted by events such as Super Bowl XLVII and the NCAA Women’s Final Four — was up by 3 percent from 2012, when about 9 million visitors came to town, the university reported in its 2013 New Orleans Area Visitor Profile, an annual assessment of the tourism industry.
Visitors spent about $6.5 billion on lodging, dining, shopping and entertainment in 2013, 4.5 percent more than in 2012, according to the survey. That is the highest visitor-spending figure in the city’s history, according to the UNO report.
Despite the gains, the number of people visiting New Orleans still was lower than before Hurricane Katrina. In 2004, the year before the storm, 10.5 million people visited the city. However, they spent only about $4.9 billion that year, or $466 each. Adjusted for inflation, that’s the equivalent of about $575 per visitor today, well below the $698 per visitor actually generated in 2013, according to the survey.
The city has set a goal of attracting 13.7 million visitors and generating $11 billion in spending by 2018, the city’s tricentennial.
Follow Jaquetta White on Twitter @jaquettawhite.