NO.AerialsFile

Advocate staff photo by JOHN McCUSKER -- Crescent City Connection and New Orleans skyline including the Ernest N. Morial Convention Center. File photos of aerials of New Orleans area and landmarks shot July 23, 2013.

Five years after Hurricane Katrina, when New Orleans’ long-term economic recovery was still very much in doubt, a much-hyped outside study of the city’s tourism industry offered hope for city officials and a goal for tourism leaders.

The Boston Consulting Group said that the number of yearly visitors would rebound to well above pre-Katrina levels, reaching 13.7 million for New Orleans’ tricentennial in 2018.

By 2017, in an apparent triumph for the executives in charge of bringing in tourists and their money, the city shot past that mark — but only because officials replaced the company that had counted visitors for more than a dozen years with a new company that tallied them in a more expansive way.

D.K. Shifflet & Associates, a Virginia-based company hired by the New Orleans Tourism Marketing Corp. for the 2017 count, reported 17.7 million visitors arrived in New Orleans that year.

The Hospitality Research Center at the University of New Orleans lost the contract with the Tourism Marketing Corp. and New Orleans & Co., the city's convention promotion organization, but the hospitality center still conducts its own tally, and it said just 11 million visitors showed up that year, 20 percent below the big goal for 2018.

The overall estimate of annual visitors to New Orleans, which the two groups measure in vastly different ways, is not an academic question. It is crucial for the economic impact reports used by the tourism industry to justify the millions of dollars in taxes that are spent to promote the industry. It also helps city leaders plan for public safety and infrastructure needs.

The higher the number, the bigger the bragging rights for tourism leaders and the greater the economic importance they can claim for their industry, which today is the biggest in New Orleans, following the decline of the oil and gas business.

As Mayor LaToya Cantrell seeks to wrest away some of the $160 million in tax revenue that annually goes to tourism groups and instead use it for the city’s infrastructure, one of the major inputs to the economic data appears to be hard to nail down.

UNO’s Hospitality Research Center produced the numbers underlying the Boston Consulting Group’s 2010 prediction of 13.7 million visitors to New Orleans in 2018. So its count of 11 million visitors to New Orleans in 2017 puts the city’s tourism industry well off pace for 2018.

The tourism marketing agencies will release D.K. Shifflet's 2018 visitor numbers during the first week in April.

Matching ‘apples to apples’

Mark Romig, who is president and CEO of the Tourism Marketing Corp., defended the 2017 decision to switch the count to D.K. Shifflet.

He and Stephen Perry, president and CEO of New Orleans & Co., wanted to align the city's visitor count with those of the state of Louisiana and other cities, Romig said, and not because the switch would generate higher numbers or because of a perceived need to surpass the 13.7 million forecast for 2018.

Tourism nears 18 million New Orleans visitors, $8.7 billion in spending for 2017

“The main factor is that the state of Louisiana moved to DKSA from UNO,” Romig said in an interview. “We’re the biggest tourism entity in the state. We thought it was important to compare apples to apples.”

Another factor, Romig said, is that D.K. Shifflet also has contracts with some of New Orleans’ competitors, which allows for a better comparison. The competitors include visitor agencies in Los Angeles, New York, Orlando and Fort Lauderdale, Florida.

New Orleans' switch to Shifflet meant that UNO’s Hospitality Research Center lost the contract — the same thing that happened on the state level.

The Louisiana Office of Tourism, under Lt. Gov. Billy Nungesser, made its change in 2016, at the behest of its director, Kyle Edmiston. In an interview, Edmiston said Shifflet provided outside entities with greater confidence in the state’s numbers. One he cited was British Airways, which was considering whether to start offering direct flights between London and New Orleans.

The move to Shifflet also saved his office $30,000 out of a $300,000 research budget, Edmiston said.

The change on the state level generated good news for state tourism leaders as well. The switch from UNO to D.K. Shifflet produced a far higher visitor count for the state in 2017, 47.1 million compared to 28.9 million reported by UNO in 2015, the last year UNO counted visitors on the state level.

Edmiston said he could not explain the difference between the two numbers. Neither could Romig for the city’s numbers. He said that New Orleans & Co. and his agency had not tried to determine the reason for the huge jump in reported visitors.

Romig said D.K. Shifflet determines its count for New Orleans based on figures it collects from nationwide surveys.

“They’re talking regularly to people around the nation on their travel habits and where they are going,” Romig said. “They’re getting New Orleans numbers as part of the nationwide sample.”

This allows Shifflet to charge the New Orleans tourism agencies only $54,000 per year compared to $176,000 charged by UNO’s Hospitality Research Center.

Different ways to count

Among the biggest differences between the two sets of numbers is the definition of “visitors.”

D.K. Shifflet includes people who come to New Orleans for the day from Covington, Slidell and other surrounding towns.

“They’re going into N.O. and spending money outside of the normal geography,” said Cheryl Schutz, a vice president of products and services for D.K. Shifflet, who added that the firm’s metric is the same one used by the United Nations World Travel Organization.

The UNO survey counts only visitors who come from at least 50 miles away.

Of the 17.7 million people who visited New Orleans, according to D.K. Shifflet, 5.7 million were day-trippers. UNO put that number at 2 million.

Jay Dardenne, who was Nungesser’s predecessor as lieutenant governor, in overall charge of state tourism efforts, said he thought highly of how the Hospitality Research Center compiled its statewide survey. “We were pleased with how UNO handled the mission for us,” he said.

John A. Williams, the UNO center’s director, said it compiles its visitor count from a number of sources, including professional surveyors in the street, which is expensive. He declined to discuss how D.K. Shifflet counts its visitors or his reaction to losing the contract.

Shifflet also has generated a higher dollar figure for the impact of visitor spending on the state and New Orleans.

It calculated the impact of visitor spending at $17.5 billion for the state in 2017, while UNO’s Hospitality Research Center put the figure at $11.5 billion in 2015.

Similarly, Shifflet said visitors to New Orleans spent $8.7 billion in 2017 while the UNO center put the figure at $7.5 billion.

One key difference: The Shifflet numbers include transportation costs for visitors to New Orleans — air fare, train fare, bus fare and gas — as part of the economic impact for the city. The UNO center does not include that spending, Williams said, because New Orleans’ economy does not benefit from it.

Battle over tax dollars

Cantrell is eyeing dollars received by the tourism industry as part of her demand for an upfront payment from the tourism agencies of $75 million for the Sewerage & Water Board. Of the $75 million, $40 million would cover overdue bills and $35 million would pay for emergency repairs.

Mayor LaToya Cantrell says she wants agreement on hotel tax revenue before spring legislative session

Among the pools of cash that have attracted the Cantrell administration’s interest is the $235 million currently sitting in the accounts of the Ernest N. Morial Convention Center that officials are planning to use for a $557 million capital spending project over five years that includes a massive public subsidy for a new hotel at the upriver end of the giant exhibition center.

Cantrell's quest for more infrastructure dollars centers on $160 million in tourism taxes

Meanwhile, the Regional Transit Authority is demanding that the New Orleans Tourism Marketing Corp. return $31 million that it and the Morial Convention Center have received from the RTA since 2001 in tax dollars originally meant for public transit.

RTA demands $31 million from tourism groups; says 2001 agreement giving them money was illegal

Cantrell’s efforts have angered tourism leaders, who cite the 2017 tourism count of 17.7 million visitors in accusing her of putting at risk the proverbial goose that lays the golden egg.

Last month, Perry, the New Orleans & Co. CEO, told The Lens, a digital news site, that the city couldn’t be trusted to spend more tourism tax dollars properly because of the record of poor management shown by problems such as dirty and unsafe streets in the French Quarter.

Redirecting the hotel tax revenue, Perry added, would threaten the “magnificent jet plane that is the New Orleans tourism industry.”

Cantrell’s political action committee fired back, calling Perry’s comments “unhinged” and publicizing his salary of $430,000 per year.

New Orleans tourism leader blasts city services in interview; Cantrell's PAC fires back


Follow Tyler Bridges on Twitter, @tegbridges.