The attendees were being shot at.
On Thursday, September 1, as they fled flood-ravaged New Orleans, two meeting attendees trying to cross a bridge say they were turned back by police firing guns.
Paramedics Larry Bradshaw and Lorrie Beth Slonsky of San Francisco, in town to attend the National Association of Emergency Medical Technicians conference at the Ernest N. Morial Convention Center, found themselves swept up in Katrina's aftermath with no way home. After being refused shelter at both the convention center and Superdome, they walked on the Ponchartrain Expressway and tried to cross the Crescent City Connection Bridge over the Mississippi River. "We were told there would be buses waiting for us at the bridge," Slonsky told Successful Meetings. "When we walked to the bridge's entrance, we were shot at . . . and told we couldn't cross."
Bradshaw and Slonsky's story is one example, albeit extreme, of the chaos endured by people in meetings and hospitality because of Katrina. Across town, firefighter John Brophy, also in town for the EMT convention, was working alongside the staff of the Hilton New Orleans Riverside, confronting medical emergencies from heat-induced seizures to childbirth. Laurence Geller, the Chicago-based owner of New Orleans' Hyatt Regency, was arriving in a rescue convoy that he says was set upon by hungry mobs. In Houston, at the Astrodome, ARAMARK's staffers were working around the clock to feed up to 25,000 hurricane evacuees. And in Rosemont, IL, Susan McSorley, meeting planner for the American Academy of Orthopaedic Surgeons, was scrambling to relocate her 28,000-person citywide, scheduled to meet at the Morial Center.
All of these stories have happy endings. In only two weeks, McSorley managed to find a new home for her convention at Chicago's McCormick Place. Geller is now spearheading an ambitious reconstruction project to build what he calls "the great American city of the 21st century." Brophy, now safely back home in Edgewater, NJ, says, "I can't say enough about the commitment to people the Hilton staff and management had. It was all about people first, no worries about profit or loss." Even Slonsky and Bradshaw, who were eventually airlifted to Texas with the help of sympathetic firefighters and National Guard soldiers, praise the staff at their French Quarter hotel. "The Hotel Monteleone people treated us brilliantly," says Slonsky. "I can't say enough about [vice president] Ronald Pincus."
Until Katrina hit, New Orleans was the fifth largest convention city in the country, bringing in $2 billion a year from meetings alone. The Mississippi Gulf Coast was America's third largest casino market; its offshore gambling industry, currently in ruins, earned nearly $3 billion annually. How can the industry recover from this crippling blow? Successful Meetings gathered a group of experts—hospitality analysts, professors, meeting planners, as well as eyewitnesses to the devastation wrought by Katrina—and asked their opinions. Here are their prognostications on the future of New Orleans and the Gulf Coast, as well as what the hurricanes will mean for meetings, for everything from prices to contingency planning.
Laissez Les Bons Temps Rouler . . . Again
Not surprisingly, experts differ in their views on the area's ability to recover. "I think people will be looking at the region with some trepidation," says Carl Winston, director of the hospitality and tourism management program at San Diego State University. Some, like Doug Ducate, president and CEO of the Center for Exhibition Industry Research in Chicago, suggest that future meetings may prefer to bypass the region altogether. "Groups have more choices today than they had 10 years ago," he points out. "They can still stay in the Sun Belt [for their convention], but not meet in the high-risk [storm] areas."
"Not to doomsday it," says Greg Crown, vice president of the Dallas office of PKF Consulting, a hospitality research firm, "but this is a catastrophic event [from which] it will take years, not weeks or months, to get back to normal. The new normal will be different—better, maybe, but different. Anyone who doesn't see that doesn't want to look at the realities, or has rose-colored glasses on."
What will the "new normal" look like? A new Big Easy might simply resemble a much smaller version of its former self. Though much of the rest of the city is ruined, the French Quarter and other hot spots beloved by tourists and conventioneers were mostly spared and have since reopened. Mississippi, meanwhile, plans to rebuild or recreate many of the historic antebellum homes that were swept away, and at presstime, Mississippi's governor, Haley Barbour, was poised to sign a bill changing the state's gambling laws to allow land-based casinos rather than floating barges.
It is this kind of quick adaptation to changing circumstances that can save the region, some analysts suggest: "Our industry is very resilient," says Colin Rorrie, president and CEO of Dallas-based Meeting Professionals International. "It took a hit on 9/11 and came back strong—today you can't get a hotel room in New York. And as far as hurricanes go, there have been more hurricanes in Florida, yet Miami is still a hot destination."
"The sense of place here wasn't really the buildings—it was the people and their traditions," notes Stephen Richer, who, as head of the Mississippi Gulf Coast CVB, witnessed the destruction of Biloxi and Gulfport firsthand. "The people and their traditions aren't going away. We're coming up with a different look and there'll be some improvements made, things people will enjoy—different accommodations as new developers come in, different attractions and shopping. Those will all be good things."
An exhausted-sounding Kitty Ratcliffe, who spoke to Successful Meetings in late September, praised the hospitality industry for its outpouring of sympathy. Just a week after the levees failed, she and her staff at the New Orleans CVB went to the Affordable Meetings show in Washington D.C. "We just went to answer questions, but we actually got a number of sales leads when we didn't expect to get any," says Ratcliffe, who is executive vice president at the bureau. The International Association for Exhibition Management, she adds, has committed to holding its annual convention in New Orleans in 2009, "and we didn't even submit a proposal."
"We've been talking to our partners in the neighborhood about creating a must-visit district, kind of like Ground Zero," says Laurence Geller, president and CEO of Chicago-based real estate investment trust Strategic Hotel Capital, owner of New Orleans' Hyatt Regency, which is adjacent to the Superdome. Tens of billions of dollars are now pouring in with the reconstruction, notes Geller, who—provided the city can avoid what he calls "cynical, pork-barrel politics"—envisions linking "three or four pockets of must-see attractions" (including the French Quarter and the convention district) by light rail, and filling the spaces in between them with urban housing. "We'll bring in prize-winning architects, we'll raise money for memorials [to Katrina's victims], build a jazz cultural center, work with housing developers to build socioeconomically mixed housing," he says. "It's how a city should be built, and New Orleans has the chance to be built that way."
The Ripple Effect
Whatever shape Gulf Coast destinations eventually take, the one certainty is that planners can expect to pay more for most, if not all, of their meetings components. Bjorn Hanson, global industry leader of the hospitality and leisure practice at PricewaterhouseCoopers in New York City, predicts an increase in average room rates of 86 cents for the last quarter of 2005. If that doesn't sound like much, consider the context, Hanson suggests: "For a single weather event in one region of the country to affect the national average [hotel] rate of the entire country by almost a dollar is a very substantial effect."
Of course, the two hurricanes' most obvious impact is on oil and gas prices. "More than 28 percent of U.S. refining capacity is still offline," notes Rayola Dougher, manager, energy market issues, for the American Petroleum Institute in Washington D.C. "It looks like a good 10 percent or more suffered major damage and isn't coming back anytime soon. That's a significant disruption in supply, and the prices of gasoline and heating oil have responded to that." Such disruptions, she adds, will also affect the prices of petroleum derivatives, from plastics to fertilizers. In other words, not only will transporting attendees and goods to meetings become more expensive, but the cost of the goods themselves—from plastic pens and other giveaways to food itself—will go up too.
Even worse than paying higher prices for goods is not being able to get them at all. With much of New Orleans' port still unusable, imports of basic foodstuffs like sugar, coffee, and bananas are being held up, says Richard Williams, president of food and beverage services for hospitality analyst HVS International, in Centennial, CO.
Then there's cotton, a basic item in meeting giveaways from T-shirts to tote bags. The United States is the world's largest cotton exporter, notes O.A. Cleveland, retired professor of economics from Mississippi State University, who operates the Web site cottonexperts.com. "We lost up to 400,000 bales of cotton as a result of [hurricanes] Katrina and Rita, and partly as a result of that, cotton prices have gone from 50 to 54 cents per pound," he notes.
Planning for Chaos
One positive effect of Katrina may be that it makes planners more aware of how they can prepare for natural disasters. Elizabeth Ngonzi, president of Amazing Taste, a hospitality consultancy in South Orange, NJ, is organizing a forum next month on emergency preparedness for meetings. "We're trying to put together best practices to share industry-wide," she explains. "In my company, because we do events for the United Nations, we have to be very aware of issues like security, evacuation, communication, and having a backup plan. I was shocked to find out that not everybody does this." Preparedness, says Ngonzi, can be as simple as asking attendees to pack the following items in their hand luggage:
• One first aid kit and one week's worth of extra medication
• A list of emergency contacts (spouse, doctor) and physical ailments/medications
• A fully charged cell phone with a backup battery charger
• A pack of tissues and/or wet wipes
• A portable solar-powered short-wave radio
• A pocket flashlight and/or green light stick
• A box of water purification tablets with collapsible water container
• Nonperishable snacks
Planners should also provide attendees with the following: phone numbers for the police station and hospital closest to the meeting venue; a map of the meeting venue area with highlight routes to key locations (hospital, police station, bus/train station, armory); a list of frequencies for local news radio stations.
As for preparing on the organizational level, Maritz Travel in St. Louis has operated an in-house, round-the-clock control center for 20 years. At the center, staffers monitor emergency situations—from airline strikes to terrorist attacks to tsunamis—on TV news channels, and keep in close contact with planners and program participants, as well as their families.
But even if your organization can't mount a similar operation, it can benefit from an emergency action plan, says Sandi Porter, Maritz Travel's vice president, industry relations. "The key thing is to plan ahead; everyone should know their roles and responsibilities so that people don't run around [like chickens] with their heads cut off if something happens," she offers. Planners should also make sure they have all attendees' flight and hotel data, emergency contact numbers, and information on special needs like allergies or physical handicaps so that they can share it with program participants, family members, and client contacts.
Force Majeure and Beyond
If planners cancel or relocate their meetings because of hurricanes, they may not be sufficiently protected by the typical force majeure clause from liability for breach of contract, warns John Foster, an attorney with Foster, Jensen, & Gulley, LLC, an Atlanta hospitality law practice that advocates for meeting professionals. (See related article on page 24.) The typical clause only allows for termination of the contract without liability based on circumstances occurring after the contract is signed that make performance illegal or impossible, he explains. The contract should also allow for termination without liability if performance becomes impracticable (meaning that performance has been rendered excessively difficult, expensive, or harmful by an unforeseen contingency) or if the performance of one of the parties is frustrated by supervening circumstances (meaning that the purpose of entering into the contract has been destroyed by supervening events occurring after the contract is signed).
"Planners book New Orleans for its jazz, its atmosphere, its diversity; if that same atmosphere isn't there or isn't anticipated to be there at the time of the meeting, is that a valid contention to cancel the meeting in that location and terminate the contract without liability?" asks Foster. "Do the meeting's sponsors have the right to expect the same ambiance, resources, and level of service in the city as they would have expected if the [hurricanes] hadn't occurred? I think they do, but there's no precedent for that. Planners must be strategic and proactive when negotiating their contracts to anticipate that something could go wrong."
But according to Kitty Ratcliffe, planners need not worry that fabled N'Awlins ambiance won't be back, even before the convention center officially reopens on April 1, 2006. "In the not-too-distant future, the areas of town where the conventioneers have spent time will be functioning and bustling, just as they were months ago," she says, noting that the airport and the interstate highway are already open and operating, as are most of the hotels and major restaurants, which have been hosting up to 40,000 recovery workers since September. "If people were severely scarred by 9/11, they wouldn't be flying," she adds. "But the reality is, more people are flying now than before 9/11. Yes, these things have a short-term impact, but as with everything, we move on."
Forecasts From The Pros
Laurence S. Geller
Owner, Hyatt Regency New Orleans
"Here's an opportunity to create three or four pockets of must-see attractions, including the French Quarter and convention center, link them by light rail, and have an influx of urban housing to balance the blighted areas. It's a chance to build the great American city of the 21st century."
President/CEO, Center for Exhibition Industry Research, Chicago
"Groups have more choices today then they had 10 years ago—they can still stay in the Sun Belt [for their convention] and not meet in the high-risk [storm] areas."
Vice president, PKF Consulting, Dallas
"This is a catastrophic event that will take years, not weeks or months, to get back to normal . . . Anyone who doesn't see that doesn't want to look at the realities, or has rose-colored glasses on."
President/CEO, MPI, Dallas
"Our industry is very resilient. It took a hit on 9/11 and came back strong—today you can't get a hotel room in New York. And as far as hurricanes go, there have been more hurricanes in Florida, yet Miami is still a hot destination."
Executive vice president,
New Orleans CVB
"In the not-too-distant future, the areas of town where the conventioneers have spent time will be functioning and bustling, just as they were months ago."
Executive director, Mississippi Gulf Coast CVB
"We're coming up with a different look and there'll be some improvements made, things people will enjoy—different accommodations as new developers come in, different attractions and shopping."