These were just a few of the hundreds of ideas that evolved today at a full-day Executive THINK conducted by the Hospitality Sales & Marketing Association International (HSMAI) and the New York University Preston Robert Tisch Center for Hospitality, Tourism and Travel Administration under the banner �Moving the Industry Forward: An Interactive Strategy Conference.� 

Attending the interactive meeting held Oct. 17 in New York City at the Marriott Marquis were 241 industry executives � CEOs, company presidents, executive and senior vice presidents, consultants and analysts � who came from 22 states, Canada and the Caribbean, representing all sectors of the travel industry. 

The morning program featured a �state of the industry� from top research minds, a presentation of initiatives and ideas from leaders and experts, and an afternoon of �roll up your sleeves� Solution Sessions.  The event was co-chaired by Robert A. Gilbert, president and CEO of HSMAI and Dr. Lalia Rach, dean of the Tisch Center at NYU. 

What will it take to get Americans back on the road?  What is the mood of the traveling consumer in all segments?  What are the initiatives being sought on the government level?  And what are the strategies sales and marketing professionals need to implement immediately? 

The answers to these questions follow in a recap of the day�s event in sequence. 

Opening Session:

Jonathan Tisch, chairman and CEO of Loews Hotels and chairman of the Travel Business Roundtable (TBR), opened the conference and urged everyone to �tell elected officials the pain our industry is in today.� 

According to Tisch: �There are 18 million people employed within the travel industry and when we speak with a unified voice we speak with strength.  Now more than ever we must clearly express the significance of the economic contribution we make to our country.� 

Among Tisch�s key points were: �Travel and tourism is a $3.5 trillion business worldwide, providing 12 percent of the world�s economy.  It is the second largest employer in the U.S., representing one of every 10 workers.  In 28 states, travel is the first, second or third largest industries. 

�Travel generated $99.5 billion in tax revenues to repair roads, and supply fire departments, police departments and schools with equipment in 435 congressional districts across the U.S. 

�The airlines have already laid off 130,000 people and it is predicted that there will be more than one million people laid off in the travel and hospitality industries by the end of 2001.  This is worse than any other recession we have ever witnessed. 

�The key states being hurt include New York, California, Florida, Illinois, Nevada and Hawaii, where travel dominates that state�s economy with a quarter of the economy impacted and one-third of all jobs affected.� 

Members of the TBR met with senators and congressional leaders to present a unified voice of management, labor and retailing to express the impact of the travel industry on the U.S. economy. 

Management is in sync with labor on three issues, according to Tisch: 

1. How do we assist the thousands of workers being laid off throughout the industry? 
2. How do we get people back traveling again? 
3. How do we increase liquidity in the short term? 

To encourage people to travel, the TBR is requesting tax relief to stimulate travel including a $500 per person ($1,000 per couple) tax credit if they purchase a travel package.  The TBR also wants to reinstate the 100 percent tax deduction for business meals and entertainment and re-introduce spousal travel deductions for meetings and conventions. 

To assist the hotels, the TBR would like to delay or extend federal tax payments and for all companies to suspend payroll taxes for both employers and employees for six months to one year. 

TBR also asked for the creation of a Presidential Advisory Council on travel and tourism and to develop a national tourism policy, which they would help coordinate.  Tisch applauded TIA�s leadership in promoting the various causes and their valiant efforts on behalf of the country�s travel industry. 

�We spend no dollars promoting the number one brand in the world, while Spain spends $147 million, Thailand spends $94 million, Singapore spends $87 million and Australia spends $88 million, all exclusively for tourism
promotion.  This all happens while at the same time 51 million international visitors spend $106 billion in the U.S.,� he noted 

John Russell, chairman of the American Hotel & Lodging Association, urged creation of �a massive 90-day travel promotion under the banner of a �Freedom Package� with substantial dollars and to include a substantial offer to convince people to travel both domestically and internationally.� 

He added: �Maybe we should pool all our empty hotel rooms, airline seats, cruise cabins and barter them together to create a massive ad campaign.� 

Russell noted that �a lot of people are not traveling for economic reasons and we need to overcome that.  Business travel was already going to be down between five percent and 10 percent, and will now be off an additional five to 10 percent.  At a minimum, the government should create travel incentives, tax incentives and workforce assistance.  Let�s fight terrorism with tourism.� 

Analysis of the Current Situation: 

Mark Lomanno, president of Smith Travel Research, noted that there were certain dynamics in the marketplace before Sept. 11 with demand having begun to decline five months prior.  �And while occupancy was spiraling down, room rates were flat and could have declined even more. 

�We were already in a period of dwindling performance.  For 12 months we had declining occupancy.  Nine percent of U.S. hotels did not generate enough income to meet their debt service.  This represents 14 percent of available hotel rooms.� 

However, he noted optimistic movement with New York City experiencing 80 to 85 percent occupancy levels over the last few weekends. The exception is the upper upscale hotels, which were off more than 52 percent in the first few weeks and remain down about 17 percent. 

He also noted that major metro areas (the top 25 markets) are experiencing a greater negative impact, doing four times worse than all other markets. 

Bjorn Hanson, global partner, hospitality and leisure, PricewaterhouseCoopers, said: �The year 2000 ended with an 84 percent occupancy, a 50-year high.  In comparison, the year 2001 will finish at 70 percent occupancy.  Looking forward to the first quarter of 2002, results will suffer in comparison to the first quarter in 2001, which reported good results.� 

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, the outlook is not completely bleak as he compared 1990 to 2001.  �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 less employees in a larger industry because of the addition of technology,� he added. 

Hanson also predicted that RevPar in New York will be off 40 percent in October, but only 33 percent down in November and 22 percent off in December. 

Peter Yesawich, president and CEO of Yesawich, Pepperdine & Brown, reported the findings of a just-completed study of consumer travel plans. 

One of his strongest recommendations was to reach out to previous guests and travelers.  �If there is a portion of business which remains at risk it is your previous guests,� said Yesawich. �Those that have been with you before have a high probability of returning.� 

Among travelers who said they would alter their travel plans, the economy was cited as the significant reason.  Specifically, one quarter said that concerns about the economy now made it difficult for them to travel � about the same percentage who stated it was unsafe to travel. 

�It is difficult to look into the future with any certainty.  As a result of the Sept. 11 events, a total of 10 percent of travelers did cancel a trip.  Of those who did cancel, 76 percent canceled domestic trips and 31 percent canceled international trips.  More domestic trips were canceled because they are planned over a shorter period of time, while many international trips were planned further off in the future and did not have to be canceled immediately.� 

He noted that the typical leisure traveler takes three-and-a-half vacations each year with four to five months of planning. The average business traveler takes eight trips a year, often with a very short purchase period. 

He also told attendees: �Our initial reaction was to shut down advertising and sit on the sidelines because consumers had tuned out any type of offers for any retail goods including travel.  The mood of the country has shifted and new car sales, for example, have bounced back (BMW just had its highest selling week on record). 

�The climate is now right to turn to the market with promotions and advertising to generate travel.  It is important to sell the right offer and not the emotion.  It is important to take into consideration the sensitivities that people feel.� 

Yesawich also noted that the cruise industry is taking a major hit as two thirds of leisure travelers have said they are less likely to take a cruise.  This comes at a time when the cruise industry will be placing new ships into service with an increase of 40 percent in capacity.  The cruise industry has rolled out unprecedented discounts with cruise fares at $399 per person on four-star ships. 

Report on the Market Segments:

As a prelude to the Solution Sessions, a panel of industry experts presented the state of each of the five market segments. 

Regarding leisure travel, Dick Knodt, CTC, president and CEO of Vacation.com, offered this cautionary note: �We believe that companies should be very careful not to undermine their revenue base and maintain price integrity.  We are also concerned that filling empty seats on airlines and empty beds in rooms is not the whole answer.  We would like to see a healthy mix of discount rates and value-added packages. 

�We are working right now with our 10,000 member agencies around the country to convince consumers that it is safe to travel.  An informal poll of our travel agents indicates that consumers are beginning to slowly book vacations for the winter and beyond.  Some people are taking advantage of the myriad of great deals out in the marketplace.� 

When a recent Travel & Leisure magazine survey asked what would inspire people to travel, 81 percent said special offers would help. 

�While many of the promotions get people traveling again, they dilute revenue and we believe that a healthy mix of discounted rates and value-added packages are a much wiser marketing strategy,� Knodt added. 

Tour operators are telling Vacation.com that they see a rise in calls about Canada, the Caribbean and domestic vacations, but still see a weakness in the European market and other long-haul destinations. 

Knodt told the attendees what the travel agents were doing to reach consumers now. 

�First we went out to the consumer to show them that the travel agent is here to help and assist them.  We
told consumers that it was travel agents who came to the rescue of travelers stranded around the world in the aftermath of Sept. 11 when they couldn�t reach the airlines and Internet travel sites were overloaded. 

�And then � here�s the really important factor � we reminded consumers that live, human travel agents will be there to answer their calls and provide the years of expertise that makes them valuable in the leisure travel process. 

�Our member agencies are now providing more counseling and less selling.  We are vastly expanding direct marketing using millions of proven travelers and focusing on reaching them on a regional basis with offers designed for them.� 

David Meyer, editor-in-chief, Business Travel News, noted that business travel was cut previous to Sept. 11 because of the economy, particularly in the computer and information technology arena. 

He added that after Sept. 11, some companies mandated no travel, many companies told their employees they don�t have to travel, and others said they are limiting travel for budgetary reasons. 

He predicted �it will take a full year to get back to 80 percent of the business travel levels pre-Sept. 11,� and noted that �30 percent of the corporations said they will rely more on travel agencies.� 

Mary Power, president of the Convention Industry Council, has worked to help associations and companies move canceled inventory. �We are now working on attrition, and we are heavily promoting that it�s safe to travel, and we are partnering with a lot of associations to tell people that it�s safe.�  She also noted that more than 400 sky marshals are being employed each week. 

�Meetings and conventions are a way to bring people together to make up for lots of individual sales trips,� she said, adding:  �One of the challenges we face is that news media are telling everyone that people are not traveling.  We have to get the message out that meetings are going on, and meetings and conventions are a great way to reinforce the right to travel and meet.� 

Vincent Vanderpool Wallace, director general, Bahamas Ministry of Tourism, focused on the message and crisis communications, noting: �We have a crisis every year with hurricanes, but we started a weather conference and proactively control the crisis with advance communications using the relationships we have established through that annual conference.� 

He noted that the Bahamas has had to look at markets outside the U.S. to compensate for the current loss of business. 

He urged everyone to create a more positive spin on communications during this crisis.  �No one wants to be reminded of what happened in the past.  People want to know that people are traveling again.  There is a herd instinct and people feel safer traveling where others are going,� he added. 

Ron Volper, president of The Volper Group, discussed specific areas that companies should consider on the human resources front. He talked about what personal training skills should be enhanced at this time, and raised the issue of whether management should shift the focus from a revenue-driven strategy to one of personal selling. 

Volper further discussed the need for personalizing the thanks and recognition of the staff, and what tangible form these should take in these trying times to motivate and protect the sales staff. 

Understanding that motivation will change during times of crisis, being aware of the changing motivational patterns is crucial, and might mean making special concessions for sales personnel.  He noted that productivity levels will not be as high, and each manager must find new skills to understand and respond to the decreases in motivation. 

Volper also stressed the need for sales staff to protect existing relationships as a priority in their new sales strategy in what has become a changed competitive environment. 

Keynote Luncheon: 

In her keynote lunch address, Betsy O�Rourke, senior vice president, marketing for TIA, revealed for the first time the organization�s new national marketing initiatives. 

O�Rourke noted that a survey showed 87 percent of the people think it�s time to recover, but 24 percent are not traveling now because of economic reasons.  More people are afraid of spending money, 16 percent don�t have time, seven percent have safety concerns, six percent are concerned with airport security, and four percent are concerned about inconvenience. 

She added: �The challenge is to have a consumer message that we are the economic engine and a return to travel is an economic security.  Travel is a fundamental right of freedom. Restoring travel is restoring the economy.� 

The Solution Sessions: 

The afternoon program consisted of interactive �Solution Sessions� whereby participants broke out into working groups to brainstorm the issues facing the industry today. 

Following are a few general highlights from each session.  A white paper detailing the findings, strategies and specific solutions will be written by Dr. Lalia Rach for each of the five strategy sessions, and released next week. 

Business Travel: 

1. Make security measures more visible, accessible and standardized so that clients are comforted; involve travel agents in the security process; train staff to sensitively introduce new security measures. 
2. Partner with top corporate clients to encourage and increase employee travel � work with them to stimulate travel demand. 
3. Reach out to clients to help define success � what services are essential and what costs can be contained.  Put the word �relationship� into relationship marketing. 
4. Look at value-added services and upgrades for clients. 

Leisure Travel: 

1. Trade off one �p� for another � forget about proprietary and embrace partnerships.  Use associations to share information and promotions; co-op and exchange information with partner channels; given the interdependence between airlines and other segments of the market, create stronger partnerships between suppliers. 
2. Add value to promotions and offers as opposed to price. 
3. Embrace public relations over advertising (external and internal). 
4. Focus on regional, short-haul markets � the three- to four-hour fly and drive business. 

Group Travel:

1. Communicate measures that have been taken to increase safety; communicate that there is a crisis plan in place. 
2. Let meeting planners know of deals through CVBs, newsletters, web sites and direct marketing. 
3. Have a deeper understanding of customer issues such as the return on time investment. 
4. Look at partnerships including local partners not normally involved in national promotions such as local florists, restaurants and other regional marketers. 

Crisis Marketing:

1. Don�t be repetitive about the crisis � make the messages positive, be informative, visible and communicate. 
Identify partners and co-op positive messages. 
2. Be proactive with useful information to help overcome hesitation to buy. 
3. The competitive circles are changing so don�t worry about rate integrity. 
4. Look to special interest and niche markets as new areas of business. A single customer has different buying habits � be specific in the messaging. 

Human Resources: 

1. Show operational support and connection and communicate inter-dependency of departments, such as how increased sales would generate revenue to hire back operations staff that was laid off. 
2. Show human aspect of sales and recognize that efforts may not have results. 
3. Protect good performers with incentives, and personalize incentives. 
4. Remember is it critical to be a leader, role model and at the same time, ask for support. 
 

HSMAI is an organization of sales and marketing professionals representing all segments of the hospitality industry. With a strong focus on education, HSMAI has become the industry champion in identifying and communicating trends in the hospitality industry while operating as a leading voice for both hospitality and sales and marketing management disciplines.  Founded in 1927, HSMAI is an individual membership organization comprised of over 5,000 members from 35 countries and 60 chapters worldwide. 

The Tisch Center for Hospitality, Tourism and Travel Administration at New York University is a dynamic and growing educational and research center located in the heart of Manhattan.  The Tisch Center offers an extensive complement of hospitality, tourism and sports management academic programs of study including two bachelor�s degree programs, four master�s degree programs, an advanced professional certificate in customer relationship management and certificate programs in hotel operations and meeting, conference and event management.