The hotel industry is beginning to turn a corner after a year of recession and the travel slump following the Sept. 11 terrorist attacks. But the road to recovery is far from unimpeded.
That was the message from a number of hotel company chief executives attending the New York University International Hospitality Industry Investment Conference at the New York Marriott Marquis.
“We`re in a fragile recovery,” said Richard Helfer, chief executive officer of Raffles International Hotels and Resorts.
Helfer said his company has responded to the downturn through such measures as creating packages that “encourage business travelers to extend their stay and become leisure travelers.”
“Still, rates are down considerably from where they were a year ago, and the rate pressure on hotels will continue into the foreseeable future,” Helfer said.
William Fatt, chief executive officer of Fairmont Hotels and Resorts, said there are signs the leisure market is rebounding, although business travel still is in a slump.
“As long as U.S. companies keep a tight rein on travel spending, the hotel industry will not recover fully,” Fatt said.
Edouard Ettedgui, group chief executive for the Mandarin Oriental Hotel Group, said the industry won`t be able to declare itself out of the woods as long as travelers continue booking their trips at the last minute.
“Until we see the booking window lengthen, we will continue to be on shaky ground,” he said.
Randell Smith, chief executive officer of Smith Travel Research, said there are some encouraging signs for the industry.
Although daily room rates are still down compared with the same period last year, they are expected to grow by 2% this year and by 3.5% in 2003, Smith said.
Occupancy numbers, meanwhile, are creeping back.
Hotels were 66.4% full for the week ended May 25, down just 0.4% from a year ago, according to Smith Travel Research.