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Bill Morrissey, Minnesota Hotel Operator, Works to Maintain Business During Recession

By Aron Kahn, Saint Paul Pioneer Press, Minn.
Knight Ridder/Tribune Business News 

Oct. 12--Bill Morrissey said hello to a friend on an elevator, just as he had thousands of times before. But this time, the light chatter turned dark, like a cloud of rubble. 

The friend wore "a strange look I'll never forget," said Morrissey, who runs the St. Paul Hotel. "I asked him if he was having a bad hair day. He said an airplane just slammed into the World Trade Center." 

Few people's troubles match those of the attack victims on Sept. 11, but the heart of American business also was pierced that day. It was especially true for the tourism industry, where the worlds of workers, clients and travelers came to a stop. 

Airports shut down, hotel occupancy dropped 20 percent to 40 percent and thousands of lodging, restaurant and food service workers were laid off. Job cuts in the Twin Cities were comparatively light -- roughly estimated at a few hundred -- but the hours of many workers were diminished substantially. 

It was clear to tourism executives that everything had changed. Business as they knew it would be different. 

Morrissey, an Army vet who was staggered by the Pentagon assault, had his own war to fight on St. Peter Street. His story of re-arming the hotel in a tourism recession illustrates the predicament of many executives in the somber weeks following the attack. 

To be sure, the effects are far from over. 

Tourism continues to be depressed in the Twin Cities, according to Smith Travel Research, a result of a previously slowing economy as well as fallout from the attack. 

Average hotel occupancy in the Twin Cities area for the week of Sept. 30 to Oct. 6 was 58.7 percent, down 20.4 percentage points from the same week last year, the firm said. 

Nationwide, a 10 percent drop in hotel revenue translates to a $10.9 billion hit for the industry, the American Hotel Lodging Association reported. A 20 percent drop means a $21.7 million hit. 

Minneapolis has been affected more than St. Paul. Ten conventions were canceled there in September, compared to one in St. Paul, which serves a regional market that depends more on automobiles than airplanes. With no cancellations for October, both cities say they are slowly recovering. 

Take a peak into the industry and you see managers making choices affecting millions of people, in an environment largely foreign to them. 

For Morrissey, the tumult started in the elevator. 

"I went to my office, turned on the TV and huddled my staff so we could start absorbing it," said Morrissey, whose firm, Morrissey Hospitality Cos., runs the St. Paul Hotel, the St. James Hotel, Red Wing; Hotel Winneshiek, Decorah, Iowa; and Wildside Catering Co., all employing 800 people. 

"Then we went into a meeting, but none of us could concentrate, so we went back to the TV. When we knew it was a terrorist thing, we posted security people outside the Hotel St. Paul and Pazzaluna (restaurant), and we put TVs into the public area so everyone could watch," he said. 

As the airports shut down, Morrissey and his staff were hit with cancellations of business meetings almost immediately, as well as requests from guests who had to get out right away and others who wanted stay longer. 

"I've never seen any business that I was associated with come to a screeching halt that fast," he said. 

For the people who needed to leave, improvisation was the watchword. Four buses were hired to take 120 insurance company employees back to Connecticut. For the guests who needed rooms for additional nights, friendliness was the key, in the form of rates discounted by 25 percent. 

For the business community, the hotel waived all meeting cancellation charges. 

"I bet we lost 30 pieces of business in the next two weeks," he said, referring to the hotel, restaurant and catering businesses he runs. "It probably cost us in the neighborhood of $50,000 to $75,000. 

"It was short-term damage control and client relationship-building, so they knew the first thing in our minds wasn't money," Morrissey said. "It was taking care of their needs and events." Yet, Morrissey had to keep an eye on the basics. Get the meeting buffets back into the cooler. Reduce the order for more food, especially perishables. 

So much to do, and while you're angry, yet. When terrorists took down the two towers in New York, Morrissey, like the rest of the nation, said he was filled with anger. When the Pentagon was attacked, he said the feeling turned up a notch. 

"I spent three years in the army. When the Pentagon got hit, then it was true anger, or a mix of anger and fear, quite frankly, about what the military might do." Soon after Sept. 11, Morrissey made the decision not to lay anyone off. 

"For an $8-an-hour worker, losing a paycheck for a few weeks is very serious," he said. "It's not like a $250,000 executive with some wiggle room." He did cut back on hours, however. At the St. Paul and St. James, he reduced the hours of lodging employees by 20 percent to 25 percent, and food and beverage workers by 10 percent to 15 percent. Some workers were able to make up some of the time by working at Wildside Catering. 

Since then, Morrissey and his staff have engaged in "guerrilla marketing." Trying to recoup lost business, they're reorienting marketing plans by advertising special rates and perks to businesses within 250 miles whose executives can jump in the car and drive. A direct mailing is about to go out, and a radio campaign is being mulled. 

"None of us can predict the future, so we have to deal with what we know," Morrissey said. "But we're not fundamentally changing our business. The ship is still the ship. We're just adjusting the sails." For how long? It's one man's opinion that most tourism businesses will be following the old course sooner than later. 

"I think this rift in the economy will be over early next year," Morrissey said. "I think we'll get back to normal. We don't want to have armed guards around us all the time." 

CAMPAIGN IN THE WORKS TO HASTEN TOURISM'S RECOVERY: Pioneer Press Minnesota tourism executives plan a public relations campaign encouraging people to visit and do business in the state despite continuing tensions in the aftermath of the Sept. 11 attacks. 

A group of business leaders have been meeting with the Colle & McVoy advertising agency in Bloomington to create the campaign, several tourism executives said. 

Among those involved are Northwest Airlines, the Minnesota Office of Tourism, the St. Paul and Minneapolis convention and visitors' associations and Hospitality Minnesota, an amalgam of hotel, restaurant and resort groups. 

The campaign will be aimed at people in the Upper Midwest and in Minnesota itself, where automobiles are a reasonable alternative to air travel, said Tom Getzke, president of the St. Paul Convention and Visitors Association. 

Officials hope the campaign will quicken tourism's slow recovery. "We're bouncing back. How high is that bounce? We really need to get through October before we'll know," Getzke said. 

Minneapolis officials so far are buoyed by the lack of convention cancellations in October, as opposed to 10 cancellations in September. 

"We have 37 conventions and meetings scheduled for October, a 40 percent increase from last year," said Susan Scofield, spokeswoman for the Greater Minneapolis Convention and Visitors Association. "We're expecting the travelers to spend $56 million here." 

Still, corporate travel is slow, said Greg Ortale, the association's president. Roughly 50 percent of hotel occupancy in the Twin Cities is dependent on traveling business people, he said, and downtown restaurants are equally reliant. 

"Until that business travel comes back, we're going to be in trouble," Ortale said. 

As for the fear that American reprisals in Afghanistan will cause a renewed decrease in travelers, Getzke said tourism officials are not concerned. They are uneasy about the potential for domestic terrorism, however. 

As travelers head to the cities again, they join others who never stopped flocking to the countryside. Many outstate resorts and hotels report big numbers, "with the sense of safety up here in the boonies," as one spokeswoman put it. 

"If anything," said Zach Johnson, a spokesman for Grand Superior Lodge, which offers 75 rooms and cabins just north of Two Harbors, "our business is increasing." 

The refrain is oft-repeated. "Fortunately or unfortunately, our business has benefited from it," said Mike Pazlar, owner of Bearskin Lodge in Grand Marais. "People are sticking close to home." 

A few exceptions: At Bluefin Bay in Lutsen, spending has declined, even though lodging volume is unchanged. "People are opting to cook in their rooms rather than come to the restaurant," spokesman Bob Kueler said. "When they come to the restaurant, they go for the $10 to $12 meal rather than the $20 to $22 one." 

Cozy Bay, a small resort in Nisswa, reports a 60 percent decrease in occupancy. "The money people have to spend at my resort is luxury money," owner Bret Jebning said, "and they're not going to be quite ready to let go of that money right now." 

-- By Aron Kahn and Nicola Saminather 

-----To see more of the Saint Paul Pioneer Press, or to subscribe to the newspaper, go to http://www.pioneerplanet.com 

(c) 2001, Saint Paul Pioneer Press, Minn. Distributed by Knight Ridder/Tribune Business News. NWAC, 


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