How can anyone predict the effect that the war on terrorism will have on meetings, conventions, and business travel? “It's like trying to gaze into a crystal ball while it's rolling,” was how Laurie Armstrong, spokeswoman for the San Francisco Convention & Visitors Bureau, put it.
Yet there are strong indications that meetings and business travel are gaining momentum. “Americans thrive on disasters. This is a nation of positive thinkers and forward-lookers,” says Max Starkov, a travel and hospitality consultant for New York-based Point Blank Interactive. “This … mentality has helped the U.S. overcome the … effects of natural, economic, and political disasters. No doubt we are witnessing a similar situation in New York and across the country.”
Hit hardest, of course, have been New York and Washington, D.C. “It's starting to come back a bit, but at this point no one knows when people will feel better about traveling,” says Jonathan Tisch, president and CEO of New York-based Loews Hotels. “People will come back, though. My gut feeling is that with the holidays coming up, you'll see things start to return to a more normal level.”
Loews, which operates four hotels in New York City and two in Washington, D.C., has made a major effort to ensure a return to normal for future meeting business, as well as to minimize losses of events scheduled for weeks after the attacks. “We've established a policy whereby anyone can postpone a meeting scheduled between September 12 and November 30 with no penalty, as long as the event is rescheduled before December 31, 2002. I'd say that's pretty much in the middle of what other hotels are doing in terms of liberal versus conservative policies,” says Charlotte St. Martin, the company's executive vice president of. “So far, more than 50 percent of our meetings that postponed have rescheduled, and most of those meetings rescheduled for before March 2002.”
The Show Goes On
The hard numbers also show a rebound. While New York occupancies had dipped into the 25 percent to 35 percent range, they were back up to 54.6 percent by the end of September. “On the most basic level, business appears to be coming back,” reports Mark Lomanno, president of Smith Travel Research. Before 9/11, STR had projected a year-end nationwide occupancy rate of 63.7 percent, which it has since lowered to 60.7 percent — a substantial impact, but, if it holds at anywhere near that level, not a devastating one.
In early October, New York Mayor Rudolph W. Giuliani, Delta Airlines Chairman and CEO Leo F. Mullin, American Society of Travel Agents President Richard Copland, and New York City tourism chief Cristyne Nicholas announced initiatives to reinvigorate that city's meetings and tourism industries, including providing 10,000 free inbound airline tickets to New York. Copland announced that ASTA was joining four other large meetings in relocating from previously booked cities to New York. Other organizations vowed to move forward with events that would have an immediate economic impact of nearly $200 million. Among the events relocating was Meeting Professionals International, which switched its October 27 MPI Foundation Meeting from Colorado to the New York Hilton and Towers.
Picking up on the theme of patriotic unity, NYC&Co.'s 3-year-old marketing campaign, “Paint the Town Red,” will now be called “Paint the Town Red, White, and Blue.” The message is the same as the one Mayor Giuliani already put out so eloquently, that “coming to New York is the best thing you can do to show your support for New York, and to show solidarity,” says Keith Yazmir, spokesman for NYC&Co., the city's convention and visitors bureau.
In Washington, Brian Ullman, director of marketing and communications for the Washington, D.C., Convention and Tourism Corp., reports more meetings being rescheduled than canceled. “People are coming in as a patriotic gesture,” he said. “We want to see that feeling spread to the meeting industry. There's no time like now and the coming weeks and months to come to Washington to show support and unity.” News was similar regarding the attacks' effect on meeting business in other cities.
Airlines Hard Hit
Getting back to normal may be most difficult for the airlines, which were so drastically affected that more than 100,000 layoffs have since occurred. But as of press time, except for Ronald Reagan Washington National Airport, which had opened only on a restricted basis, the major airports were at 80 percent to 90 percent of pre-September 11 operational capacity.
Along with the initial $15 billion in federal assistance provided to help stem the industry's financial woes, individual airlines have taken steps to win passengers back. In early October, Delta Airlines implemented a round of deep discounts. It was quickly followed by United, American, and Northwest.
International travel has been hit the hardest, with some predictions that airlines around the world face at least $7 billion in losses this year in international travel alone.
It may take such extreme and controversial security measures such as computer-assisted passenger screening technology (CAPS) to get business travel back up. Or it may take the pragmatic approach suggested by STR's Lomanno. “The fact … is, people are going to have to fly places and stay in hotels for things to return to normal.”
But for quite a while, “‘Normal’ won't be what it was before,” says the Orlando CVB's Peeper. “Right now, we're still in the process of defining the new ‘normal’.”