Archive for November, 2005

Turkey time

I see a mixed message in yesterday’s Thanksgiving travel forecast from AAA. On one hand, the group says only slightly more Americans will travel to Grandma’s house next week (assuming she lives 50 miles or more away) than did last year. AAA blames reduced consumer confidence and higher travel prices for the slim projection of an 0.8-perccent increase in travel next weekend (37.29 million travelers this year versus 37.0 million in ‘04).

While gasoline prices have dropped nearly 50 cents on average in the past month, consumers are faced with higher overall travel costs, says AAA. Airfares may be down 4.8 percent from last year, but both hotel (up 1.5 percent) and car rental prices (up 3.2 percent) are higher than they were last Thanksgiving.

A final note of optimism for hotels: Twenty-eight percent of holiday travelers expect to stay in a hotel, up considerably from ‘04, when only 23 percent of those on turkey holiday stayed with the lodging industry.—Ed Watkins, Editor

Another legend passes

Forget big companies. Forget 6,000-plus-unit chains. Forget Harvard-MBA-educated CEOS.

It was the legendary entrepreneurs—people like Kemmons Wilson, John Q. Hammons, Harris Rosen and many others—who created this industry by the sweat of their brows and the power of their creativity.

Earlier this week, the hotel business lost one of these great industry builders: Preston Robert Tisch. Together with his brother Larry, Bob Tisch started his hotel empire in 1946 with a small tourist hotel in New Jersey. Over the years, the brothers created a large diversified company, Loews Corp., that encompasses everything from offshore drilling to tobacco. But in his heart Bob Tisch was always a hotelier first and foremost. That legacy lives in the form of his son, Jonathan Tisch, who is chairman and CEO of Loews Hotels and one of the hotel industry’s most driven and most creative leaders. The apple doesn’t fall far from the tree.

Everyone in the hotel industry will miss Bob Tisch. Our sympathies go to Jon Tisch and the Tisch family.—Ed Watkins, Editor

FEMA cuts the purse strings

A lot of people, hurricane refugees and many hoteliers included, aren’t happy with yesterday’s news that FEMA is pulling the plug on Dec. 1 on payments for hotel rooms for people driven from their homes following Hurricanes Katrina and Rita. As of today, evacuated families occupy 53,000 hotel rooms in Texas, Georgia, Mississippi, Louisiana and a few other places.

Hoteliers face the prospect of occupancies plummeting from 100 percent to nearly zero overnight. But their problems go beyond the simple arithmetic. First and foremost, they need to find ways to fill these rooms. Many of their regular customers have probably gone elsewhere, so it will take a combination of shoe-leather selling and fast-acting marketing (via the Internet, for example) to lure some of these guests back.

A bigger problem for hotel owners is the mess they face as the evacuees vacate. Many of these guests have occupied their rooms—often four or six to a room—for nearly three months straight. They’ve cooked in them and generally spent 24 hours a day in facilities not designed for long-term residential use. In many cases, these rooms will need substantial and expensive renovations to restore them to usable service, let alone to meet most chain and AAA standards.

One franchise chain executive I spoke to earlier this week at the New York Hotel Show showed sympathy for their franchisees faced with this dilemma but said his brand probably won’t be willing to lessen its standards, even for a short period of time, to allow the owners to make necessary repairs.

A lot of hoteliers viewed the evacuees as a bonanza during the traditionally soft shoulder season of fall. They may think twice once they assess the costs they face.—Ed Watkins, Editor