The Southeastern Economy in 2008
Tourism Keeps Visitors Coming South
Florida leads the pack
Florida's taxable tourism-related sales were up 2.8 percent in August from a year ago, according to Florida's Department of Revenue. The state's numerous resorts and attractions enjoyed better-than-expected attendance, and the cruise ship industry posted strong bookings. South Florida hotels posted impressive gains in the year's second half amid a second storm-free summer.
Hotel occupancy surged by double digits in the Miami-Dade County area and in the Florida Keys, according to Smith Travel Research. In August, Orlando International Airport saw a 13 percent surge in passenger traffic over last year, a performance that marked the strongest month for growth at the airport since April 2005.
Rebounding international traffic, stimulated by the relatively weak U.S. dollar, explains some of this increase because a weaker dollar relative to many other currencies makes U.S. tourist destinations more financially attractive for international travelers.
Tourists heading back to New Orleans
In addition, Harrah's New Orleans, the largest casino in the city, was on pace for its best year ever. The cruise industry rebound is under way at the Port of New Orleans, with annual passenger traffic reaching two-thirds of the pre-Katrina levels. The port has welcomed back three of the four cruise ships that call the city home, and numerous other cruise ships have scheduled regular port calls.
Measures of convention activity are mixed. In 2004, 17 events brought 119,342 out-of-town visitors, or an average of 7,020 people per convention, to the Convention Center in October and November of that year. In 2007, 19 events in those same months will draw only 110,663 people, or 1,200 fewer conventioneers on average per event, according to data from the New Orleans Convention and Visitors Bureau.
Gross revenues from Mississippi Gulf Coast casinos grew to pre-Katrina levels on the strength of new and reopened casinos. Mississippi gaming establishments maintained steady revenue growth over the year, partly as a result of the infusion of insurance money and federal funds into the area. Gaming revenues for 2007 through September were up a little more than 5 percent for coastal casinos and up 1.6 percent for river casinos compared with 2004. Patron numbers and employment levels for the coast's leisure and hospitality industries continued to grow but have not yet reached pre-Katrina levels.
In Tennessee, Nashville had an excellent tourism summer in 2007, with historically high—but less volatile—gas prices keeping travelers closer to home, according to a Nashville Convention and Visitors Bureau spokesman. Continuing high gas prices in 2008 could benefit tourism markets such as Nashville, which depend on a large number of tourists who reside in the region.
Looking ahead to 2008
Some Florida contacts predict tourism for the next six months to be similar to prior-year levels. Travel agencies, however, are generally upbeat about next year's business prospects. Advance booking trends for the first two quarters of 2008 were ahead of those in 2007, according to contacts.
If the dollar remains relatively weak, Florida's tourism industry will benefit in 2008. More Canadian and overseas tourists will likely take advantage of a favorable exchange rate to visit the Sunshine State. Typically, foreign visitors stay longer and spend more money than domestic tourists.
Orlando International Airport has expanded its international service, a development that the Metro Orlando Economic Development Commission anticipates will produce an annual economic impact of $171 million. The German airline Lufthansa, Irish carrier Aer Lingus, and Panama's Copa will offer nonstop service to Orlando from several large foreign cities, stimulating international tourism.
A $400 million expansion of Nashville's Gaylord Opryland Hotel Convention Center is in the works for 2008. New meeting space should attract larger conventions to the facility, according to a company spokesman.
Most operators expect the Mississippi Gulf Coast tourism industry to continue to expand and eventually surpass pre-Katrina levels, but the soaring costs of insuring establishments may restrain new investment.
Additionally, New Orleans's travel and hospitality segment may take longer to revive. Louisiana's tourism industry isn't expected to reach its pre-Katrina heights until 2010, according to research from the University of New Orleans, the U.S. Department of Commerce, and the Travel Industry Association of America.