New Orleans' two major tourism promotion entities would be merged as part of a landmark deal struck this week to funnel more money from hotel taxes to the city’s problem-plagued infrastructure.
It's a goal that has long been sought by hospitality officials.
The deal includes a provision merging New Orleans and Co. — last year's rebranding of the former Convention and Visitors Bureau — and the New Orleans Tourism Marketing Corp., creating a single entity that would promote the city to both large groups and individual travelers.
The fact that those goals are currently divided between two groups has long been seen as a problem by some hospitality industry leaders.
“I have to applaud the mayor and the negotiating team to see this as an opportunity to do it better,” said Mark Romig, president and CEO of the Tourism Marketing Corp.
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The idea of merging the two organizations has been kicked around for more than a decade but never realized, in part because of concerns by former Mayor Mitch Landrieu and the then-leadership of the Marketing Corp., a public agency, about turning over more power and millions of dollars to a private organization that has operated largely out of public view.
But this week, the idea of merging them was endorsed by both Romig and Mayor LaToya Cantrell, who pushed for the infrastructure deal in negotiations with the hospitality industry that were overseen by Gov. John Bel Edwards.
“I agreed to look at a consolidated framework because I do believe we need to break down the redundancies. We don't need duplicative agencies,” Cantrell told WWL-TV on Tuesday.
The main focus of the deal was the money it would direct to the city and the Sewerage & Water Board, including both a one-time cash infusion and recurring revenue that would come largely from new taxes on hotels and short-term rentals.
The S&WB stands to get $50 million immediately from the Ernest N. Morial Convention Center and unspent federal disaster funds administered by the state, while a fund for continuing infrastructure work by the city and the utility would get about $26 million a year. The city would also be able to redirect about $3.5 million a year for five years toward infrastructure by restructuring repayments to the state on GO Zone bonds.
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But the deal would also include the most significant shake-up to how tourism promotion is handled locally since the Tourism Marketing Corp. was founded in 1991.
At the time, city and hospitality industry leaders worried that not enough was being done to promote New Orleans as a destination in the summer and other slow seasons, such as the winter holidays, or to reach out to individual tourists in addition to conventions.
The answer, they decided, was to create a new marketing agency to complement the work the Convention and Visitors Bureau had been doing for three decades. The bureau would focus on attracting conventions and conferences of medium to large groups and international travelers, while the new agency would focus on bringing in leisure tourists from elsewhere in the United States.
“The idea was to bring in those tourism tax dollars to New Orleans and have them stay here,” Romig said.
Romig described the full integration of the two organizations as the progression of steps already taken in recent years to better coordinate their functions. Both operate out of New Orleans and Co.’s building on St. Charles Avenue, they have merged their websites and social media accounts, and they coordinate on campaigns.
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Under the plan, Romig and his nine employees would join the larger New Orleans and Co. and continue their work within that organization.
“The integration is already pretty tight,” said Kristian Sonnier, spokesman for New Orleans and Co. “This isn’t a drastic change. Everyone’s looking forward to further collaboration with Mark and his team.”
About $5.5 million of the Marketing Corp.’s budget, which comes from a nightly fee charged on hotel rooms, would be redirected to the city’s infrastructure fund as part of the overall deal. Other money the group receives, including $2 million a year from Harrah’s Casino and its hotel and $7.8 million from a self-assessment by hotels in the city, would go to New Orleans and Co.
New Orleans and Co. would also get a share of a new tax on short-term rentals, 75 percent of which would go to the city’s infrastructure fund. Overall, though, New Orleans and Co. would end up with a few million dollars a year less than the two groups now bring in together.
It’s not yet clear how the merged entity would deal with that shortfall, Sonnier said.
As currently envisioned, the tourism marketing organization and its board would remain in existence, though what its role or staffing would be is not yet clear, Romig said.
This is not the first time an attempt has been made to merge the two entities.
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A merger was listed as a top priority of a report on bolstering the hospitality industry in 2010. The two seemed to be moving toward consolidation, but the plan was scuttled because of disputes over whether the board would be public or private.
New Orleans and Co. is a private entity, which receives much of its money directly from its membership of hotels and other tourism-related businesses. While it does not have a public board or have to comply with public records laws, it does receive about $21 million in taxes each year.
Asked about concerns involving oversight and transparency, Sonnier pointed to the yearly audits New Orleans and Co. must already submit to the state’s Legislative Auditor's Office.
“We are adhering to some pretty strict processes and audits already. There’s nothing that’s not transparent about those audits,” he said.
New Orleans Mayor LaToya Cantrell will mark her first year in office next week, which means that local media is busy evaluating what and how she did.