Casino news source: Business Week - http://www.businessweek.com/
Harrah's: Casino wins shifted to locals
By ALAN SAYRE
In another sign that New Orleans' tourist economy is far from recovered from Hurricane Katrina, the head of Harrah's Entertainment Inc. said that the mix of money won by the company's downtown casino has shifted sharply to local residents since the storm.
"It speaks poorly about the willingness of people to travel to New Orleans," Gary Loveman, Harrah's chief executive officer, said Wednesday during an American Gaming Association teleconference about the state of the casino industry in New Orleans and along the Mississippi Gulf Coast.
Before Katrina struck on Aug. 29, 2005, Harrah's New Orleans Casino typically won 40 percent of its money from people living within 50 miles of the city, Loveman said. Twenty percent came from regional customers -- those living 50 to 250 miles away -- while national customers -- those beyond 250 miles -- accounted for 40 percent of the casino's winnings, he said.
Now, 80 percent of the casino's winnings come from customers within 50 miles, Loveman said. At the same time, the gambling hall's monthly winnings are back within pre-Katrina figures. In February, Harrah's New Orleans reported winnings of $30.2 million to the state.
For more than a year, New Orleans tourism and convention officials have complained about the reluctance of out-of-towners to visit the city, emphasizing that although wide swaths of the city remain in wreckage, tourist-oriented areas were largely unaffected by the storm and have been ready to host guests for more than a year.
Loveman said the previous mix of winnings at Harrah's New Orleans was due to a strong convention business and big events such as the Sugar Bowl, Mardi Gras and the New Orleans Jazz & Heritage Festival, as well as a positive overall tourist image of the city. He said the city needs to continue to promote itself to tourists and large groups that host conventions.
"We're going to need to do that very aggressively," Loveman said. "Guilt is a powerful tool here and there is absolutely no reason not to use it."
This week, top New Orleans tourism officials are in New York launching an international tourism campaign. Although the convention business continues to rebound, leisure travel is still down, said Mary Beth Romig, a spokeswoman for the New Orleans Convention and Visitors Bureau.
"We're all still dealing with this negative image," Romig said.
Last month, two trade associations that had planned to bring nearly 6,000 people to the city canceled planned conventions for 2009, citing the slow hurricane recovery and concerns about crime. But New Orleans also has hosted several major conventions since Katrina that brought in nearly 100,000 visitors.
Despite a downturn in the number of tourists coming to the city since Katrina, gambling figures have been strong not only at Harrah's, but for its two suburban dockside riverboat competitors -- the Treasure Chest at Kenner, owned by Boyd Gaming Corp. and Pinnacle Entertainment Inc.'s Boomtown Casino at Harvey.
Analysts have said the casinos have provided relief from the strain of post-Katrina New Orleans for local residents, who have fewer entertainment options, and a place to go for out-of-town workers assisting in the recovery efforts.
Along the Mississippi Gulf Coast, which saw its entire casino business wiped out by Katrina, recovery has been strong as gambling halls have reopened. According to figures from the Mississippi Tax Commission, winnings from gamblers at 10 coastal casinos totaled $247.9 million in February, compared with $244.9 million won by 12 casinos during the pre-Katrina month of February 2005.
Some industry analysts have said the Mississippi coast, with more than $5 billion in casino-related investments under way, could join Las Vegas and Atlantic City as the country's major casino destination points. Loveman said, though, that comparisons were difficult since Atlantic City has 60 million adults within driving distance.
"I think there is a very bright future," Loveman said of the Mississippi coast. "Matching Atlantic City will be a tough task."
Loveman also said Harrah's would be announcing plans for a major casino in Biloxi in May. He would not provide any details. |
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