U.S.: hotel business slumps

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Headline: Hotels Are Reeling As Travelers Cancel

Source: Washington Post, Tuesday, 18 September 2001; Page E01

URL: http://www.washingtonpost.com/wp-dyn/articles/A46715-2001Sep17.html

Hundreds of meetings and conventions are being canceled across the nation, a trend that analysts say may drain billions more dollars out of a travel industry already staggering before last week's terrorist attacks.

Autumn is usually the heaviest time of year for convention travel. But now, many hotels have emptied out and big hotel chains are taking tens of thousands of cancellation calls from a public too shellshocked to travel. Conventions and meetings of all sizes, especially those scheduled for September or early October, are being called off or postponed.

The trend is particularly notable in Boston, New York and Washington, the three cities that played the biggest roles in last week's attacks. Two major conventions have been canceled in Boston. Hoteliers expected to rent 2,500 rooms during the World Bank and International Monetary Fund meetings set for Washington later this month, but those meetings have been called off, as have many smaller gatherings.

"Ouch," said Tricia Messerschmitt, spokeswoman for Washington's Four Seasons Hotel. "We're reeling," said Linda Roth, spokeswoman for the St. Regis Hotel.

Conventions at the Anaheim Convention Center in California that were expected to attract close to 22,000 delegates over the next several days have been canceled. Four large groups have pulled out of New Orleans this month. They were to bring about 40,000 delegates who were expected to spend on average about $1,100 each in the city.

"This is going to be an awful, awful quarter," said Beverly Jianna, a spokeswoman for the New Orleans Convention and Visitors Bureau. "We usually do so well at this time of year. Now we've got to try to generate regional business and try to keep people who have meetings on the books to drive or come by other means than air if they're concerned."

The National Business Aviation Association, a Washington trade group whose convention was supposed to begin today, would have brought $40 million to $50 million to that city's economy, with about 30,000 attendees occupying 50 New Orleans hotels. The group will try to reschedule, but any new convention will almost certainly be smaller.

Meeting Professionals International, a Dallas trade group of 19,000 meeting planners who do about $16 billion of business a year, estimates canceled conventions and meetings are likely to cost members more than $1 billion in revenue in September, according to Ed Griffin, the group's president.

The travel industry was already in trouble before the attacks, thanks to a general business slowdown that prompted many firms to cut back on business travel. However, unlike airlines, many of the major hotel chains are flush with cash and can probably weather a brief collapse of their business. A more sustained downturn, though, could hurt badly, analysts said.

Hotel stocks were typically down 20 to 30 percent when the stock market reopened yesterday, so precipitous a drop that some analysts spotted a buying opportunity. They noted the travel industry suffered in 1991, during the Persian Gulf War, but recovered once it ended. Other analysts cautioned, though, this is a different situation. "The slowdown in 1991 was based on the fear of terrorist attack," said Steven Kent, a lodging analyst at Goldman Sachs Group Inc. "Now, this is reality."

One bright spot is that many groups that hold the biggest fall conventions have not canceled, at least so far. The Future Farmers of America will still take 50,000 high-school students to Louisville for the group's annual gathering. The Congressional Black Caucus Foundation is still bringing some 15,000 conventioneers to Washington late this month. Many of Chicago's biggest conventions are still on track.

But organizers of conventions that are going ahead say they expect attendance to be light. The U.S. Hispanic Chamber of Commerce decided to proceed with a convention this week in Atlanta, but the group's president and chief executive, George Herrera, expects 25 percent of the 6,000 registrants not to show.

Steve Pinetti, senior vice president of sales and marketing at the Kimpton Hotel & Restaurant Group LLC, said his San Francisco-based chain is feeling the pinch among the 35 hotels it owns and operates nationwide. Only about 30 percent of Kimpton's rooms are occupied this week, down 60 percentage points from the usual occupancy rates this time of year. "I'm taking a shellacking at the worst time," Pinetti said.

Two major citywide conventions that were supposed to bring 11,000 visitors to Boston have been canceled, said Pat Moscaritolo, president and chief executive of the Greater Boston Convention and Visitors Bureau. A third convention is at risk, and lesser meetings have been called off, too.

"Americans by nature are eternal optimists," Moscaritolo said, describing his initial thought that business would rebound in a matter of days. "By the end of the day on Friday, I began to realize this eternal optimism model I was working from may not be viable."

City and state tourism leaders plan to meet in Boston on Friday to develop an advertising campaign to woo travelers within driving distance of the city, shining a spotlight on Boston's patriotic history, Moscaritolo said.

And as for the millions the federal government planned to spend on runway expansion at Logan Airport, he had another suggestion: Spend it promoting tourism. Otherwise, the new runways won't be needed. "They'll become like relics," he said.



-- Andre Weltman (aweltman@state.pa.us), September 18, 2001

Answers

Travelers staying out of skies in droves

By Donna De Marco THE WASHINGTON TIMES

Travelers, hesitant to take to the unfriendly skies, are canceling trips, meetings and vacations after the terrorist attacks in Washington and New York City last Tuesday. Top Stories

Travelers are backing out of plans to travel any time soon, whether for business or leisure, on both domestic and international flights. "People are apprehensive about flying," said Jim Tittsworth, vice president of operations at Golden Travel Service, which has made 170 refunds in two days. The agency, located in the District, typically processes 15 to 20 refunds a week.

While some of those refunds are for clients who were out traveling last week and needed to get different flights back home, a large portion of those refunds -- more than half -- were cancellations. "My larger concern is that the phones aren't ringing like they were before," said Mr. Tittsworth, whose agency had about 1/3 the number of phone calls yesterday than usual. AAA Mid-Atlantic usually receives a couple hundred Internet requests for travel information on a Monday. However, yesterday about 1/3 the normal requests came in. "It shows that leisure travel seems to be the last thing on people's minds," said AAA Mid-Atlantic spokesman Justin McNaull. Businesses are also paralyzed. McCormick & Co. has suspended all business travel until Sept. 30. At that time, the situation will be re-evaluated, said Mac Barrett, a spokesman for the Hunt Valley, Md.-based spice manufacturing giant. "With so much attention focused on safety right now, we want to do our part to reassure our personnel that their welfare and safety is first and foremost," Mr. Barrett said. Several other businesses have put a ban on travel either through the end of this month or even indefinitely, said Kevin Mitchell, chairman of Business Travel Coalition, an advocacy group for business travelers. Other companies are not pressuring their employees to travel if they aren't comfortable doing so, Mr. Mitchell said. In a Business Travel Coalition survey of businesses on Sept. 11, 88 percent expected their employees will "unilaterally cut back on travel in the coming weeks." "I wouldn't be surprised if there's one new booking for every four cancellations," Mr. Mitchell said. International travel is also taking a hit. Amadeus, a global reservations system in Madrid said its airline bookings from Sept. 11 to Sept. 14 were down 28 percent over the like period last year.

The North American market showed a decline of 74 percent in the same time, largely because the airlines were grounded during a majority of that time. However, the rest of the world's reservations decreased by an average of 19 percent.

Some travelers were still making reservations yesterday. OneTravel.com has had many cancellations for trips within the next few weeks, but the online reservation company did have some new bookings yesterday, said spokeswoman Susan Jefferson.

http://www.washtimes.com/business/20010918-62177000.htm

-- Martin Thompson (mthom1927@aol.com), September 18, 2001.


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