Tourism Performance in New Orleans

New Orleans–a city known for its culture, music, cuisine, and hospitality–continues to be a top destination for tourists and conventions. In true Big Easy fashion, the city has rebounded from the devastation of Hurricane Katrina. In 2005, the number of visitors to the city fell to 5.3 million, a 47.5% decrease from 2004.[1] However, by 2012 the city welcomed over 9 million visitors who spent $6 billion, starting a record-breaking streak. [2] This boom in visitor spending continued, surpassing $7 billion in 2015, a 3.5 % increase over 2014.[3] This past year, the National Travel & Tourism Office reported the number of international tourists traveling to New Orleans grew by more than one-third in 2015, the largest one-year increase of any major U.S. city.[4]

The city now has 39,000 hotel rooms[5], which makes it poised to accommodate this influx in travelers for high-profile events like the NBA All-Star Game. In addition, developers are investing heavily in hotel development throughout the New Orleans metropolitan market, where 1,381 rooms are currently under construction.[6] Despite the boom in construction, experts worry this uptick, “…may not be enough to shelter all the tourists heading to New Orleans, even with projects still in the planning pipeline.”[7]

This presents an exciting opportunity for locals willing to open their doors to tourists, who use websites such as Airbnb in order to monetize their largest asset: their homes. While opponents of platforms like Airbnb claim that home sharing is causing a negative impact on hotel industry performance, data on occupancy, ADR, and RevPAR paint an overwhelmingly optimistic picture.

Hotel Industry Performance
The hotel industry bolstered New Orleans’ post-Katrina economic recovery, and investments in additional developments continue to contribute to the city’s thriving tourism industry.

By every objective measure, the hotel industry in New Orleans has performed exceptionally well in the aftermath of Hurricane Katrina.[8] Since 2012, hotel employment has remained relatively stable, with weekly wages increasing by 10.2%.[9] Industry experts estimate that hotels in New Orleans are now selling for roughly $300,000 per room, nearly double their value prior to Hurricane Katrina.[10] Although monthly RevPAR has slowed in 2016, largely due to a lack of space for new hotel developments, annual figures since 2009 show strong year-over-year growth. RevPAR in the Central Business District and French Quarter continues to increase, with a 67% increase from 2009 to 2015.[11] In conjunction with ADR and RevPAR figures, occupancy rates in New Orleans, the highest in years, have exceeded the national average every month of this year since February, hitting 80.1% in April.[12]

[1] New Orleans Convention and Visitors Bureau via Global Hotel Network 2016 Market Report
[2] New Orleans Convention and Visitors Bureau Press Release, December 20, 2013
[3] New Orleans Convention and Visitors Bureau via Global Hotel Network 2016 Market Report
[4] National Travel & Tourism Office, 2015 Overseas Visitation Estimates, July 28, 2016
[5] Skift, Associated Press “New Orleans Tourism Reinvented 10 Years After Katrina,” August 11, 2015
[6] The Times-Picayune, “New Orleans hotel boom: How big can it get?”, September 21, 2016
[7] The Times-Picayune, “New Orleans hotel boom: How big can it get?”, September 21, 2016
[8] Hotel News Now, “New Orleans hotels put Katrina in rearview mirror”, July 18, 2011
[9] U.S. Department of Labor Bureau of Labor Statistics Quarterly Census of Employment and Wages for Orleans Parish, NAICS Code 72111
[10] The Times-Picayune, “New Orleans hotel boom: How big can it get?”, September 21, 2016
[11] Global Hotel Network 2016 Market Report: New
Orleans
[12] Smith Travel Research