TIA: Katrina could cause Gulf Coast to lose $5B in tourism

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WASHINGTON -- The devastation wrought by Hurricane Katrina on Alabama, Louisiana and Mississippi earlier this month is draining as a much as $50 million a day in tourism revenue from those states, according to the Travel Industry Association (TIA).

The TIA estimates that the bulk of those losses are in New Orleans and other parts of Louisiana, which the association estimates is losing at least $37 million in tourism daily.

Alabama is losing $5.5 million a day, the association estimates, while the tab for Mississippi, where many casinos and hotels were left in ruins by the storm, is running at $7.7 million a day.

Although some areas may recover sooner than others, it is nevertheless likely that the affected Gulf Coast states stand to lose more than $5 billion in tourism by the end of the year.

The TIA also estimates that at least 260,000 travel-related jobs have been lost, at least temporarily. (See related story below.)

The huge job and revenue losses makes Katrina one of the costliest disasters to hit the travel industry since 9/11. Nevertheless, the impact on the overall travel industry is expected to be less severe.

Katrina is a major tragedy, a TIA spokeswoman said, but 9/11 was different. People were afraid to fly, they were afraid to go to cities, which stifled travel throughout the U.S. as well as abroad.

Additionally, the spokeswoman said, the faltering economy took a significant toll on tourism in the aftermath of 9/11. As the economy slowed, a great many companies laid off employees, which cut demand for business travel.

Similarly, many travel companies were forced to lay off employees.

It is estimated that the travel industry lost more than 500,000 jobs in the wake of 9/11.

Katrinas impact on Louisiana, a major oil refinery center, could have a broader impact on the overall economy if fuel prices, already up considerably from last year, continue to rise.

That in turn would raise the prices of consumer goods, causing a ripple effect that ultimately could hurt the travel industry.

You could see prices go up on everything from tomatoes to coffee, the spokeswoman said.

If that happens, and the economy does grow and people lose consumer confidence and start spending less discretionary income, that could [negatively] affect the industry. But that is something we are really going to have to wait and see.

To contact reporter Michael Milligan, send e-mail to [email protected].

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