Infrastructure and Transportation Issues

History of the Challenge

New Orleans’ economy has long been heavily dependent on tourism, but this reliance has created financial instability. The city’s economy has historically been shaped by shipping, port activity, oil and gas, and hospitality, but over time, the dominance of tourism has made it vulnerable to economic shocks.

Key historical moments shaping the city’s economic reliance on tourism:

• Port Economy & Trade Hub (1700s–1900s): The city was built on trade and shipping along the Mississippi River, but automation and port closures reduced its role in the late 20th century.
• Decline of Manufacturing & Oil Industries (1980s–1990s): The fall of industrial jobs forced the city to pivot more toward hospitality and tourism.
• Post-Katrina Tourism Boom (2005–2015): After Hurricane Katrina, tourism was revived as the city rebuilt, but local residents benefited unequally from this recovery.
• COVID-19 Pandemic Shutdowns (2020–2021): The collapse of tourism devastated the economy, exposing the risks of overreliance on a single industry.

How We Got to the Present Moment

New Orleans' heavy dependence on tourism has led to several economic vulnerabilities:

1. Low-Wage Jobs: Many hospitality and service jobs pay low wages with few benefits.
2. Seasonal & Crisis-Based Instability: Events like hurricanes, pandemics, and economic downturns can cripple the city’s main revenue source.
3. Gentrification & Housing Costs: Tourism-driven development has led to higher rents and property prices, pushing out locals.
4. Underinvestment in Other Industries: While other sectors exist (e.g., healthcare, tech, and education), they lack the same level of investment as tourism.

Current Data on the Issue

• Tourism Revenue: Generates $10 billion annually and employs 85,000 workers (~12% of city jobs).
• Wages in Hospitality Sector: The average annual salary is $24,000–$30,000, well below a living wage.
• Housing Costs & Gentrification: Rent has increased by 35% since 2015, driven by short-term rentals (Airbnb).
• Tech & Healthcare Sector Growth: These industries remain underdeveloped, contributing less than 15% to the economy.

Possible Solutions

Diversifying the Economy

1. Expand the Tech & Digital Economy
• Create tax incentives for tech startups and digital media companies.
• Invest in coding boot camps and tech training programs for local workers.
2. Strengthen Healthcare & Biotech Industries
• Support research hospitals like Tulane Medical Center and LSU Health in becoming biotech hubs.
• Offer scholarships and job training in medical careers.
3. Revitalize the Port & Green Energy Sectors
• Modernize Port of New Orleans operations to attract global trade.
• Invest in renewable energy projects like offshore wind and solar.

Making Tourism More Equitable

1. Increase Wages & Worker Protections
• Raise the minimum wage to $15/hour for tourism and hospitality jobs.
• Require hotels and restaurants to provide paid sick leave and benefits.
2. Regulate Short-Term Rentals (Airbnb)
• Limit the number of Airbnbs in residential areas to prevent rent increases.
• Introduce higher taxes on short-term rentals, directing funds to affordable housing.

Small Business Growth & Local Investment

1. Support Minority-Owned & Local Businesses
• Expand small business grants and microloans.
• Reduce bureaucracy for Black-owned and Indigenous businesses to secure city contracts.
2. Develop Cultural & Creative Industries Beyond Tourism
• Fund local artists, musicians, and cultural organizations for projects that don’t rely on tourist spending.
• Strengthen film and TV production incentives to bring new jobs.

Organizations Actively Working on These Solutions

1. Greater New Orleans, Inc. (GNO, Inc.)
• Focuses on economic development and industry diversification.
• Website: www.gnoinc.org
2. New Orleans Business Alliance (NOLABA)
• Supports entrepreneurship, workforce development, and business growth.
• Website: www.nolaba.org
3. Louisiana Economic Development (LED)
• Promotes investments in new industries like tech, film, and renewable energy.
• Website: www.opportunitylouisiana.gov
4. New Orleans & Company
• Works on tourism policies and employment fairness in the hospitality sector.
• Website: www.neworleans.com
5. Propeller - Social Innovation Hub
• Supports small businesses and entrepreneurs in alternative industries.
• Website: www.gopropeller.org
6. Greater New Orleans Housing Alliance (GNOHA)
• Advocates for affordable housing policies and Airbnb regulation.
• Website: www.gnoha.org
7. Launch NOLA
• Focuses on helping small Black-owned businesses grow beyond tourism.
• Website: www.launchnola.org
8. Film New Orleans
• Works to expand the local film industry and create high-wage creative jobs.
• Website: www.filmneworleans.org
9. Reconcile New Orleans
• Provides hospitality job training but advocates for better wages in the industry.
• Website: www.cafereconcile.org
10. The Idea Village

• A startup incubator helping to build tech and entrepreneurship in New Orleans.
• Website: www.ideavillage.org

Out Success Stories

1. Barcelona, Spain – Managing Tourism Growth
• What Worked: Barcelona regulated Airbnb rentals and invested in alternative industries, reducing reliance on tourism.
• Lesson for New Orleans: Strengthening tourism regulation & diversifying the economy can promote economic stability.
2. Asheville, NC – Supporting Local Businesses & Economic Growth
• What Worked: Asheville supported local businesses over large tourism chains, increasing small business resilience.
• Lesson for New Orleans: Strengthening small business support programs can reduce overdependence on tourism.

On this page

• Infrastructure and Transportation Issues
• History of the Challenge
• How We Got to the Present Moment
• Current Data on the Issue
• Possible Solutions
• Diversifying the Economy
• Making Tourism More Equitable
• Small Business Growth & Local Investment
• Organizations Actively Working on These Solutions
• Out Success Stories