New Orleans’ hospitality jobs far fewer than industry claims, report says; so, what gives?

By Richard Thompson

Source: The Advocate

December 11, 2018

Amid new pressure from unions and an ongoing debate over whether the city’s hospitality and tourism industry is doing enough to support its mostly low-wage workers, a local nonprofit research group has released a report estimating that the industry’s economic footprint is significantly smaller than previous industry-led estimates.

While hospitality leaders have long touted the industry’s ranks as amounting to more than 80,000 jobs, the Data Center’s report Tuesday pegs the number of New Orleans residents who make their living from tourism at closer to 30,000.

Part of the issue with such projections, the Data Center notes, is that defining what qualifies within a set industry cluster is “a rather subjective activity, leaving definitions vulnerable to pressures to make industry clusters look as large and inclusive as possible.”

The Data Center’s research relies on parameters put together in 2014 by Harvard University researchers.

Under that methodology, the report says, the local hospitality and tourism cluster, including hotel jobs as well as other tourism-related positions like tour operators and staff at attractions such as zoos and museums, accounted for 15,458 direct jobs in 2017. The bulk of them were the 11,647 jobs in the city’s 161 hotels, the report says.

Adding in the city’s slate of 564 full-service restaurants, which cater to both tourists and locals, brings another 14,804 jobs into the fold.

That tally is at odds with the tourism industry’s estimates, which have ranged from 80,000 to 100,000 jobs but also span across a 10-parish area and likely include a broader definition of what qualifies as a tourism job.

The Data Center’s report says that “discussion with local experts and extensive web searches reveal no publicly available documentation for the methodology yielding this number.”

A leading hospitality official said Tuesday that he was still reviewing the report but generally disputed its view of the industry, which he said is difficult to quantify.

Stephen Perry, president and CEO of New Orleans & Co., the city’s recently renamed convention and visitors bureau, described the report as “riddled with factual errors and theoretical errors” and said it “draws conclusions that the real world simply does not support.”

In a statement earlier this year, Perry claimed that “more than 100,000 employees (are) directly employed in the tourism industry in New Orleans.”

But the Data Center report also describes a less than adequate financial outlook for many of the industry’s workers. For example, it says, the city’s full-service restaurant jobs on average paid $29,464, including tips, in 2017.

“While these industries do support employment at a range of earnings levels, these jobs are less likely to support middle- and high-earning wages compared to the balance of industries that make up the New Orleans economy,” the report says.

Perry countered that many tourism jobs allow local residents who lack a high school or college degree to work for decades, as well as younger people who want to work part-time while they’re between jobs or enrolled in college — facts that he said skew the numbers.

“An entry-level job for a person without a high school degree working in a restaurant does not equal a (person with a) college degree starting a first job in the computer programming field, and that is a product of the marketplace,” he said.

Still, the Data Center’s analysis comes amid a broader discussion about the city’s longstanding problems of economic and racial inequity, which often revolve around the workers who make up the bulk of the ranks of the hospitality industry.

In May, a group of hospitality workers staged a protest at a meeting of the New Orleans Tourism Marketing Corp. They demanded a free health care clinic, to be funded with proceeds from the city’s hotel occupancy tax.

At a news conference days after the protest, hospitality leaders and city officials said they were on board with that effort. But eight months later, what they might do remains a mystery, and Perry said such discussions are still underway.

And last year, hundreds of workers at the Hilton New Orleans Riverside, the city’s largest hotel, voted to unionize, a rare development locally that labor leaders hoped would give them a long-sought foothold after decades during which unions made little headway at the city’s hotels.

Meanwhile, the Ernest N. Morial Convention Center is continuing to pursue plans to build a $557.5 million, 1,200-room Omni Hotel. The proposal submitted by the project’s would-be developers called for as much as $330 million in public subsidies, according to an analysis by the nonpartisan Bureau of Governmental Research.

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