Dusk falls over Bourbon Street, a mecca of tourism in the French Quarter of New Orleans.
Two years have elapsed since Hurricane Katrina's floodwaters overtopped levees and collapsed floodwalls designed to protect New Orleans, destroying homes and lives and shattering the city's economy. Many more years will likely pass before the Crescent city regains its footing, if it ever does.
Some things will be changed forever. One-third of the city's pre-Katrina population of 450,000 is still living somewhere else, many never to return; according to a new Brookings Institute report, the unemployment rate in Orleans Parish is 5.1%, up from 4.5% at the one-year anniversary mark. Corporations that were hard to attract and retain before the storm may prove even more reluctant to locate in a city so vulnerable to nature's wrath. But there are some positive signs in New Orleans' halting economic recovery, particularly in the industries that largely sustained it prior to the storm. And despite lingering challenges, many here are pinning their hopes on them.
Some of the most indelible images of Katrina's aftermath came from the flooded hospital corridor, where doctors and staff from the medical schools at Tulane University and Louisiana State University fought to keep patients alive and get them evacuated from the schools' respective hospitals and the still-shuttered Charity Hospital, which served the city's many uninsured. The schools are back, Charity's operations have been moved to nearby University Hospital — albeit with far fewer beds — and officials are hoping to redevelop the area into a high-tech biomedical corridor. The linchpins will be a new LSU teaching and research hospital and a replacement for the flood-damaged Department of Veterans Affairs hospital that was next door to Charity. As with many keys to the city's recovery, the $2 billion project hinges on federal funding that is not yet assured. But New Orleans medical director Kevin Stephens says officials are optimistic that the development will move forward, bringing desperately needed medical and mental health services and sparking a resurgence of the biomedical corridor.
"To have that complex downtown will be tremendous," Stephens says. "The VA hospital will be a modern facility with the latest technology, and it will help recruit and retain both faculty and staff for the medical schools, along with medical students and residents."
The Port of New Orleans — the one constant throughout the city's 300-year history — was among the first economic sectors to rebound after Katrina, receiving its first ship call less than two weeks after the storm. Cargo traffic has returned to pre-Katrina levels, says port president and CEO Gary LaGrange, and as many as 60,000 jobs in New Orleans are directly or indirectly tied to the port. LaGrange expects business to increase further as housing rebuilding gets under way in earnest, increasing demand for building materials from overseas. And in another positive sign, an expected 500,000 cruise ship passengers will arrive and depart through the port's terminal in 2007 — a considerable drop from the 750,000 cruise passengers who traveled through New Orleans in 2004, but on par with the average number of passengers in the five years leading up to the storm.
Those passengers have helped bolster perhaps the biggest part of the New Orleans economy. For better and worse, tourism has over the years become the city's lifeblood; before the storm, it pumped an estimated $6 billion into the local economy and funded a third of the city's operating budget. Katrina virtually shut the industry down for months. But officials say the lucrative leisure travel and convention business is again picking up steam. "Tourism has been the one really functioning, broad-based industry since the storm, and in many ways it has really carried a lot of the city's positive recovery messages on its back," says Stephen Perry, president and CEO of the New Orleans Convention & Visitors Bureau. Visitation has reached 70% of pre-Katrina levels, he says, and after a traditionally slow summer, the Ernest N. Morial Convention Center has several big meetings lined up for fall and spring.
Tourism is a precarious foundation, however; much hinges on how a destination is perceived by the outside world, and the news from New Orleans over the past two years hasn't exactly burnished the city's image. "We're hoping that there will be real progress on national perceptions," Perry says, "and that those things that have cast negative images over the city, and that have clearly had a negative impact, will improve."
Perry says the perception that things aren't changing fast enough is the biggest threat to the convention and tourism business — more than the reality of the city's depressingly high crime rate or the fear of another powerful storm. "One of the things that we battle with is that all of the good things that come out of the tourism side are bumping up in mainstream media with the tales of governmental failures here, in terms of accelerating the recovery," he says. "That has been the single biggest overall problem that we've had to face — the inability of federal, state and local authorities to effectively manage an accelerated recovery plan. It just hasn't happened."