Katrina, Rita Could Cause Gulf Coast Some $5 Billion in Tourism

The devastation wrought by hurricanes Katrina and Rita on Alabama, Louisiana, Texas and Mississippi this month is draining as a much as $50 million a day in tourism revenue from those states, according to the Travel Industry Association of America (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.

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 and Rita are major tragedies,” 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.

Katrina´s 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. Estimates on Rita are yet to be determined.

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.”