Oil spill one more hurdle for Katrina-ravaged Gulf Coast
Biloxi, Miss. — It’s a busy Saturday morning at the Waffle House on Beach Boulevard, the main drag along this town on the Gulf of Mexico.
But for Kayla the Waitress that’s just fine.
She’d rather be swamped with the pandemonium of a high school swimming team plopping down at the counter than to have to worry about whether she and her colleagues will have enough business to keep everybody employed.
“It’s usually pretty good on Saturdays and Sundays,” Kayla said, adding that eating at the Waffle House is one of those quirky Southern traditions that seems to endure.
I took a drive to Biloxi, Miss., from New Orleans recently since I had never seen the Gulf Coast and the properties that Las Vegas companies have built there. I was curious about how badly the Gulf of Mexico oil spill had affected tourism on the Gulf Coast and I decided to talk with regular folks before taking a look at the hotel occupancy reports from the Mississippi Hotel & Lodging Association and the revenue numbers published by the Mississippi Gaming Commission.
In between dropping plates of waffles, bacon, grits and hash browns in front of hungry customers, Kayla gave her assessment: The oil spill really didn’t do that much damage to the area’s tourism industry. That’s because the Gulf Coast still hasn’t fully recovered from the damage inflicted by Hurricane Katrina in 2005. It didn’t help that the economy tanked just when the Gulf Coast was ready to enter hurricane recovery mode.
“I think the casinos are doing just fine, but the rest of us out here are still just scraping by,” Kayla said.
Kayla moved to Biloxi after Katrina struck.
“When I got here, I just cried because I had seen everything that was here before the hurricane because I used to visit my family all the time,” she said.
The hurricane’s scouring of the beach is evident along the length of Beach Boulevard. Kayla’s Waffle House is one of the few buildings on the Gulf side of the highway. On the land side, there are long, vacant patches of land interrupted occasionally by a new building. There are still signs along the road advertising businesses that are no longer there.
Biloxi only recently began rebuilding a pier along the beach. The six-lane Biloxi Bay Bridge connecting the city with Ocean Springs, Miss., opened only a year ago, four years after Katrina.
“Yes, it’s brand new,” said Carren, the Chatty Desk Clerk. “It’s one of the nicest Motel 6’s you’ll ever see.”
She’s right. Although many identify Motel 6 as a brand that remodels someone else’s building to sell rooms on the cheap for low-budget customers, the Biloxi Motel 6 sparkles.
Driving Beach Boulevard, you see a pattern — many of the brands that have the financial resources to move quickly — Accor’s Motel 6, InterContinental Hotels Group’s Holiday Inn, Wyndam Hotel Group’s Super 8 and Ramada — have done that, taking advantage of a market that is slowly rebounding.
Carren agrees with Kayla that the casinos are doing just fine and that Biloxi is hurting more from the 5-year-old hurricane damage than the 5-month-old oil spill damage.
“I think New Orleans got most of the attention when Katrina hit because of all the flooding that occurred,” Carren said. “Here, the wind and the tide destroyed entire buildings. And even though there was some storm-surge flooding, it wasn’t nearly as dramatic as it was in New Orleans.”
As for the Gulf of Mexico oil spill, the Biloxi area benefited from some geographical coastal quirks that kept oily tar balls from washing onto its white, sandy beaches. Currents pushed the oil slicks to the east where some of the worst damage occurred on Florida’s beaches.
The Orlando Sentinel reported that September was the first month since April — when BP’s Deepwater Horizon drilling platform exploded and sank off the coast — that visitation and travel numbers were better than the year before along Florida’s panhandle.
“Beachfront hotels reported year-over-year drops in revenue ranging from 12 percent to 29 percent during the high-season months of June, July and August, according to figures compiled by the Santa Rosa Island Authority, which leases the land to hotels, restaurants and other businesses,” the Sentinel said.
National Geographic Traveler magazine’s November-December edition lists 99 coastal areas worldwide and ranks their geotourism quotient. Ranking dead last: the Louisiana Gulf Coast. Second to last: the Mississippi Gulf Coast. Both were categorized in “near catastrophic” shape.
National Geographic’s analysis says the Mississippi coast has received a quadruple whammy of damage — the Gulf of Mexico oil spill, preceded by Hurricanes Katrina and Camille (in 1969) and the arrival of coastal casinos when gambling was legalized in 1992.
Carren the Chatty Desk Clerk said the Gulf of Mexico oil spill resulted in a number of dead animals washing ashore east of Biloxi — fish, birds and a lot of jellyfish. Aside from that and the damage done to the local fishing and shrimping industries, the oil spill did little to hurt the Biloxi area, she said.
Incidentally, there were plenty of ads in area media encouraging residents to eat more locally produced fish and shrimp. “The effects of the oil spill are over,” ads said.
So how about the casinos?
Denise the Dealer at the Isle of Capri Casino in Biloxi said visitation is strong on the weekends, but really weak on weekdays. And here’s a familiar story: A lot of the people who come to play on the weekends aren’t spending as much money, she said.
According to the Mississippi Gaming Commission, Isle has 1,254 slot machines and 28 table games and employs 723 people. It’s the company’s largest of three Mississippi properties.
On a Saturday afternoon in the heart of Southeast Conference football country, Isle had plenty of open seats all around the casino. The minimum table game wager was $5.
“But I’ll bet it’s a lot busier at Beau Rivage today,” one of the players at Denise’s table said to me.
Beau Rivage: It’s French for “beautiful shore” and it’s MGM Resort International’s entry in the Mississippi Gulf Coast, the tallest building in Mississippi and the largest casino on the coast (and second largest in Mississippi behind Harrah’s in Tunica). Built by Steve Wynn, Beau Rivage became part of the MGM empire when it acquired Mirage Resorts in 2000, a year after the hotel opened.
After Katrina inundated the casino — check out the 10-minute Google video shot by an unidentified person who rode out the storm at Beau Rivage — the hotel was reopened a year to the day after the hurricane.
Many of Wynn’s design flourishes abound inside — open spaces with plants and flowers, inlaid tile designs on some floors and directional signs similar to the ones you see at Bellagio and Wynn Las Vegas.
Beau Rivage has more than 2,000 slot machines, 88 table games and 2,714 employees, the most in every category in the state.
By Las Vegas standards, the square footage is on par with the Las Vegas Hilton; the number of slots, in the neighborhood of Texas Station; and by number of table games, on the level of the Palms.
On Saturday night, the joint was packed.
I had to drive to the fifth floor of the parking garage to find a space. Every restaurant had waiting lists. The table minimums were $10. It was hard to find a vacant slot machine. Show rooms, bars and nightclubs were filled.
So how do the hotel occupancy and gaming revenue numbers stack up?
Smith Travel Research, which does the heavy lifting on the stats for the Mississippi Hotel & Lodging Association, said hotel occupancy was at 72.4 percent in the Biloxi-Gulfport area in August, the latest month for which statistics are available. That’s slightly better than the 70.8 percent reported in August 2009.
The average daily room rate for the month was $81.43, 0.8 percent off from August 2009. Those figures are based on a survey of 56 of the 98 properties in the area. By comparison, the national occupancy rate was 63.9 percent in August and 60.1 percent in August 2009 and the average daily room rate was $98.69 in August, 1.5 percent better than a year earlier.
August turned out to be the best month of 2010 for casino gross gaming revenue, according to the Mississippi Revenue Department, with $101.2 million reported in the Gulf Coast counties.
That compares with $95.9 million in August 2009, $111.5 million in August 2008, $108.6 million in August 2007, $66.5 million one year after Katrina and $105.9 million in the month that the storm hit.
The Gulf Coast’s best-ever month was July 2007 when the county’s casinos grossed $124.7 million. In the three months following Katrina, there was no Gulf Coast casino revenue.
Annual gross revenue has dropped off from 2007’s $1.3 billion, indicating the region is suffering the same economic doldrums that Nevada is experiencing.
It appears likely that the area is on track for a third consecutive year of declining casino revenue.
source: Oil spill one more hurdle for Katrina-ravaged Gulf Coasti – Las Vegas Sun