Taking Stock of Louisiana
State needs to strengthen tourism industry
A change in stock price can vary whenever a CEO takes over a company, depending on the market perception of how capable the new CEO may be in taking the company forward. Other times, a change in stock price may reflect how well (or poorly) a CEO may manage the company in a crisis. Sometimes, the way a stock performs reflects how well the CEO “talks the talk,” or otherwise inspires confidence in the future of the company.
For example, Tesla shares recently took a dive after its CEO, Elon Musk, tweeted that his electric-car company’s stock price was “too high.” In a matter of minutes thereafter, the market capitalization of Tesla declined by $20 billion.
Then there was Zoom’s CEO, Eric Yuan, who apologized for a number of recent “security” lapses, saying his video chat company was straining from the increased number of users due to the COVID-19 outbreak. Shortly thereafter, Zoom’s market capitalization declined $7.5 billion, as a selloff ensued on Wall Street.
And the CEO of Netflix, Reed Hastings, just mentioned in an interview, off-hand, that the launches of Disney Plus and Apple TV Plus would introduce a “whole new world” of competition for his company. That caused the value of Netflix stock to plummet by $31 billion dollars.
As you can see, words are powerful, but more importantly, investors tend to be more comfortable with CEOs who appear confident – and optimistic – about the future of whatever industry in which their company operates, and any specific challenges their company may be facing.
Could the same be true for our elected “CEOs” – those who lead our cities and states? Might there be places where the governors and mayors inspired such confidence in managing their communities during this coronavirus crisis, that more and more Americans will want to “invest” in those cities and states by moving their families and businesses there as part of a booming economy? If so, there necessarily must be places where the exact opposite is true – where people are “selling off” and moving away, maybe for good.
Take New Orleans, for example. When New Orleans Mayor (or “CEO”) LaToya Cantrell says in an interview with an international publication like The Washington Post that shutting down Mardi Gras next year is “something that we have to think about,” you just know this isn’t going to help the “stock price” of New Orleans at all.
That’s because, according to an economic study from this past February, Mardi Gras in New Orleans has a $1 billion economic impact to the city – and it’s only been growing. In fact, since 2011, the economic impact has grown 66 percent, fueled by the 1.4 million visitors for the parades and celebrations (which is almost four times New Orleans’ population). This doesn’t even include the economic impact of the million other visitors to New Orleans throughout the year, who spend tens of millions of dollars at restaurants, bars, hotels and other businesses.
You see, when it comes to Louisiana’s tourism revenue, New Orleans is gangsta – accounting for $7.41 billion of Louisiana’s $18 billion annual tourism income – contributing almost $1.5 billion in tax revenue for federal, state and local governments, nearly 50% of all tax revenue statewide.
So vital is tourism to our state that each household in Louisiana would need to be taxed an additional $1,100 to replace the visitor taxes received by the state and local governments – just in 2019. It’s estimated that without jobs supported by visitors to our state, the unemployment rate in Louisiana would nearly triple.
So, the longer Mayor Cantrell puts up a “Be Back Soon” sign in the “window” of New Orleans, there will be fewer and fewer visitors to Louisiana, costing the state billions of dollars for possibly years to come. The 2020 New Orleans Jazz and Heritage Festival was cancelled this year, and The Essence Festival has been canceled as well.
The new $1 billion airport in Kenner is operating just 3% of its scheduled flights.
And without visitors to New Orleans, what will happen to the tens of thousands of hospitality workers whose jobs won’t be coming back, or have exhausted unemployment benefits, and won’t be able to feed their families or pay the rent? And not just in New Orleans, but throughout the state, where tourism dollars are depended upon for survival.
This is why it is so irresponsible for Mayor Cantrell to create uncertainty in the marketplace by saying, “It will give me great pause right now before I commit to saying we are moving forward with Mardi Gras 2021.” Or that she thinks the Saints should play any games this calendar year in an empty Superdome, adding, “I think that no fans present, that is the way to go.” Ridiculous.
Maybe it’s time for Gov. Edwards, on behalf of the people of Louisiana he was elected to represent, to draw up one of those proclamations he’s so familiar with by now, and to declare a “state of emergency” in New Orleans, possibly under La. R.S. 14:329.6.
By doing so, the governor could (at least) eliminate the more restrictive COVID-19 rules that Cantrell established in New Orleans (which is, by far, the most restrictive in the state) and protect the valuable property of hard-working Louisianans everywhere from further damage – our tourism industry.
Because if something is not done soon to mitigate the off-therails, failed leadership in New Orleans, our Louisiana “stock price” may never recover – even long after the current “CEO” of New Orleans is gone.
Louis R. Avallone is a Shreveport businessman, attorney and author of “Bright Spots, Big Country, What Makes America Great.” He is also a former aide to U.S. Representative Jim McCrery and editor of The Caddo Republican. His columns have appeared regularly in 318 Forum since 2007. Follow him on Facebook, on Twitter @louisravallone or by e-mail at email@example.com, and on American Ground Radio at 101.7FM and 710 AM, weeknights from 6 - 7 p.m., and streaming live on keelnews.com.