Hotels Prepare For Slowed Demand

NEW YORK— Most major lodging companies already have contingency plans in place to deal with slowed travel demand due to the affects of war. And according to a Reuters report, hotels are already considering using them. If the outbreak of war discourages more Americans from traveling, hotels are prepared to cut services such as closing restaurants and limiting hours of health clubs to cut costs, said the report. Hoteliers say business travel has slackened in the last few weeks, with revenue per available room down 5% from a year earlier in the week to March 15, according to Smith Travel Research. However, analysts said that hotel industry has a few positive things going for it to weather the potential slump as a result of war— limited new room supply and better capitalized companies. “There is less of a glut of rooms than in the previous war and hotel companies are in better financial shape, although the threat of domestic terrorism could ruin recovery,” said one analyst. The limited bright spots to this scenario are in drive-related markets, which fared much better than big-city hotels after the Sept. 11 attacks. Disneyland, which mostly serves close-by Southern Californians, is ahead of last year in bookings while Disney World, which mostly serves tourists from outside its Florida base, is behind 2002, said the report. SOURCE: Reuters