In the face of the worst economy America has seen in decades, you might think that the Mississippi Gulf Coast’s economy would be in big trouble. After all, tourism is one of its chief economic drivers and the gaming industry is a huge part of Mississippi’s tourist business. And with the recession tightening gambler’s wallets and forcing travel plans to be canceled or cut back, the Gulf Coast could be suffering a severe one-two punch on the heels of Hurricane Katrina. But instead, optimism abounds. Mississippi tourism and economic development officials say that the Gulf Coast is not only stable, but poised for unprecedented growth once the economy recovers.
Not that the Mississippi Gulf Coast hasn’t taken a hit. The economy on the Gulf Coast began to decline in the fourth quarter of 2008 and the trend continued through the first quarter of 2009. Unemployment levels reached eight percent for the three coast counties in February 2009 and remained stable in March, but are still well below both the state and national averages for unemployment, which were above nine percent in March. Hotel occupancy rates also fell 10 percent from March 2008 to March 2009, when the occupancy rate was 61 percent.
Gross casino revenue at the 11 coast casinos declined 12 percent in the first quarter of 2009 when compared with 2008. “While we’re down in 2009, we haven’t felt the effects as badly as other areas. 2008 was a record-breaking year for the gaming industry here despite having only 85 percent of pre-Katrina slot machines and tables and only 75 percent of hotels back on line,” said Brian Sanderson, President of the Gulf Coast Business Council.
“We were three to four months behind Vegas and Atlantic City for showing a downturn and then it was a smaller downturn than they experienced,” said Janice Jones, Media/Public Relations Manager for the Mississippi Gulf Coast Convention and Visitor’s Bureau. While the Gulf Coast hasn’t experienced the huge declines that places like Las Vegas and Atlantic City have, the casino industry here is still feeling the pinch. Several casino properties are for sale, including the Beau Rivage in Biloxi, and many planned projects are on hold pending an economic recovery. Notably, the $700 million Margaritaville casino project planned by Harrah’s is still sidelined. “Harrah’s has decided to halt construction for the time being. They do intend to restart construction and we have every reason to believe that the project will go forward,” said Sanderson.
Larry Gregory, Executive Director of the Mississippi Gaming Commission said an industry study shows regional, drive-to markets are faring much better during the recession than larger gambling meccas. “Our market is primarily drive-in and Louisiana is our primary market. We reap the benefits of people staying close to home. We’re a good, easy, inexpensive location for them to escape to,” said Beth Carriere, Executive Director of Mississippi’s West Coast-Hancock County Tourism Development Bureau.
“With the economy as bad as it is right now, we’re maintaining. Our casinos are doing very well thanks in part to our friends from the west,” said Carriere. Both coastal tourism bureaus have increased advertising expenditures recently and it’s working. “We’re continuing to advertise a little more aggressively and we’re already 9,000 inquiries above last year,” said Jones. Those numbers translate directly into business. Jones said that almost 50 percent of inquiries visit within a year, most within 4-6 months.
Hancock County received an almost $1 million community development block grant for advertising and has spent most of that money advertising in Louisiana. Through June the West Coast-Hancock County Tourism Bureau is holding a sweepstakes with a prize package for two for an overnight stay in a bed and breakfast, a dinner out, and a 5-day cruise from the Port of New Orleans. To enter the sweepstakes, and to check out upcoming events like the annual 4th of July Crab Fest, visit www.mswestcoast.org.
Casinos also are focusing advertising dollars on Louisiana. “Eighty to eighty-five percent of our business is from the northshore of Louisiana, the I-12 corridor from Baton Rouge to Slidell. Since that’s where our market is, that’s where we advertise,” said Schoen Heier, Sales and Marketing Manager for the Silver Slipper Casino in Bay St. Louis. An example of aggressive casino promotions is the Silver Slipper’s “Shoot for the Moon in June”, where they will give away $100,000 in cash June 5th through June 7th.
Key to Mississippi’s tourism success is continued investment in non-gaming attractions. Sanderson said the coast needs to attract more family tourists and that tourists need to be able to do more things when they visit. “Right now we’re averaging three nights per visitor and that needs to increase to five or six nights,” said Sanderson.
To that end, Mississippi just expanded its Tourism Incentive Bill which will allow gaming companies to take advantage of tax incentives to build non-gaming ancillary attractions. Qualifying investments of over $10 million will now be eligible for sales tax rebates of up to 30 percent over a 10 year period. “We’re very thankful that the state legislature and governor signed that into law this year,” said Sanderson.
While the Tourism Incentive Bill expansion should spur further investment by gaming companies, there is no shortage of projects already in the pipeline. Several key projects are already in progress and the Gulf Coast Business Council indicates there is more than $1 billion in projects that should get underway in 2009, the vast majority of which have already been funded.
The Coast Coliseum is undergoing a $70 million expansion that will double the convention space capacity and will be complete this summer, ahead of schedule. This new capacity will allow the Mississippi Gulf Coast to compete for 85 percent of the national conventions that are held each year. “This expansion will qualify us for larger conventions that we previously had to turn down. We will now be able to host up to five conventions at once with flexible meeting space,” said Jones.
The Gulfport Biloxi International Airport completed a $50 million expansion in 2008 and is investing another $60 million into its infrastructure. On the near horizon, the State Port at Gulfport is not only rebuilding, but expanding, and has plans to bring in a small cruise ship. And the recent completion of Highway 90, which runs along 26 miles of beach, now allows uninterrupted traffic for the first time since Hurricane Katrina.
In addition to these major infrastructure projects, a $30 million Ohr-O’Keefe Museum designed by world renowned architect Frank Gehry is being built in Biloxi. “We expect this to be a tremendous asset when finished and it should be partially completed this year,” said Sanderson. The City of Biloxi also has been given more than $7 million to build three additional museums, including the rebuilding of a larger Seafood Museum.
Sanderson said Mississippi has the largest façade grant program in the nation and that these funds are being used to redevelop and revitalize several downtown areas including Gulfport and Bay St. Louis. “Things are looking bright. All our infrastructure is being replaced – what was old is not anymore,” said Carriere. Many historic buildings are being renovated, as well as improvements in streets, sidewalks, and landscapes. “We have the chance to redo renovations that were done after Hurricane Camille in 1969 and get rid of the 1970s facades,” said Carriere.
The state recently awarded an additional $60 million in grant money for projects in Hancock County. This amount was added to the $145 million previously designated for the county. Of that money, $13 million will go toward the building of a marina at the foot of Main Street in downtown Bay St. Louis. “The marina is going to do so much for this area – new businesses, shops, restaurants, boardwalks, and all activities associated with boating. When the marina is complete we expect huge growth on Main Street,” said Carriere. The marina has already been designed and funded and is now in the permitting stages and should be completed in 2012.
One of the most exciting projects happening on the coast is the construction of the $44 million Infinity Science Center, which will be built on 199 acres near the Mississippi Welcome Center at Stennis. Groundbreaking and clearing has been completed and construction is ready to begin on this ambitious public/private joint effort that is expected to open in 2011. “The Infinity Science Center will be a world-renowned earth and space sciences educational experience. It will be a highly interactive and highly visual teaching center,” said Sanderson. According to Sanderson, the designers of Walt Disney World’s Epcot Center have been brought in to plan the project. “We’ve hired the best of the best and it will be ever-changing. As science grows, so will the Science Center. Like the name of the center, the possibilities are infinite. The ways in which we’ll be able to utilize this center are unlimited,” said Carriere.
Carriere said the Infinity Science Center is expected to bring 500,000 visitors annually with planned group visits and another 500,000 in stop-ins. “The economic impact from the center is expected to be tremendous. Initially hotels in the Slidell area will benefit, but it will also encourage people to further visit Mississippi and increase overall tourism,” said Carriere.
Mississippi also is focusing on ecotourism on both sides of the coast. Adjacent to the planned Infinity Science Center, the State of Mississippi Department of Marine Resources has purchased 1,200 acres that will be developed into a nature trail and conservatory, complete with boardwalks and exhibits to be enjoyed by the public. On the eastern side of the coast is the new Audubon Center in Moss Point, which connects people every day with the natural beauty of the Pascagoula River and surrounding areas through youth education, field trips, nature tours, and a variety of intensive naturalist training programs.
“The coast is marketing itself as a region, drawing on the rich culture we all share. We continue to be focused on public policy issues important for our region in order to take advantage of opportunities that were unveiled to us after Katrina. We’re realizing so many opportunities now,” said Sanderson. “In addition to tourism, we have very unique research and manufacturing assets that could make this area a world leader in aerospace production and technology,” he said. Indeed, according to a February 2009 Moody’s report, the economy on the Mississippi Gulf Coast is set to outperform the national economy. The report cites stability in shipbuilding, the military, and the tourism industry as key components for this success.
The Gulf Coast will have a chance to showcase their region when they host the National Governors Association annual meeting in Biloxi this July. This meeting will bring leadership from all over the country, as well as extensive media coverage, on the eve of the fourth anniversary of Hurricane Katrina.
All this investment despite a sluggish economy bodes well for the Mississippi Gulf Coast, which is poised to experience a boom. “The word is encouraged. For now, as long as we can sustain ourselves it will be worth it, because when the economy recovers we are going to see more growth than we’ve had in 100 years,” said Carriere.