Mark Lomanno, president of Smith Travel Research, noted at the recent Industry in Crisis: Alternative Strategy Conference sponsored by HSMAI and the New York University Tisch Center for Hospitality, Tourism and Travel Administration that there were certain dynamics in the marketplace before Sept. 11 with demand having begun to decline five months prior. Lomanno also noted that as a result of September 11th, major metro areas are experiencing a greater negative impact, doing four times worse than all other markets.
Bjorn Hanson, global partner, hospitality and leisure, PricewaterhouseCoopers, added: "The year 2000 ended with 84 percent occupancy, a 50-year high. In comparison, the year 2001 will finish at 70 percent occupancy." Hanson is predicting at least 10 outright hotel failures and noted that New York City lost 1,380 rooms or two percent of its total supply. However, he added, the outlook is not as bleak as it sounds because in 1990 the hotel industry lost $5.7 billion, but in 2001, the industry, as a whole, will make $20 billion, primarily because operating expenses have been cut and interest expense is down. There are also fewer employees in a larger industry because of the addition of technology," he added.
Peter Yesawich, president and CEO of Yesawich, Pepperdine & Brown, reported the findings of a just-completed study of consumer travel plans by his company. Yesawich said, "It is difficult to look into the future with any certainty....The climate is now right to turn to the market with promotions and advertising to generate travel...It is important to take into consideration the sensitivities that people feel."