February 12, 2002 - Curtis Nelson,  president and chief executive officer of Carlson Hospitality called on delegates at the American Lodging Investment Summit held in in Los Angeles from February 3-5, 2002  to contact their senators as a matter of urgency over reforms to travel and tourism which are under consideration.  If the reforms are carried they are likely to raise the profile of travel and tourism and provide a boost to business travel with measures such as a tax credit of $1200 per couple for up to three trips.

Meanwhile, hotel occupancy is showing strong signs of recovery but this is not being matched in terms of the ADR, according Mark Lomanno, president of Smith Travel research. But the rebound in the ADR may be a long slow process with all of the global discounting  which is going on, said Mr. Lomanno.  In a comprehensive statistical presentation, Mr. Lomanno referred to 15 gateway cities  which have been severely impacted by the downturn. Atlanta, Boston, Chicago, Dallas, Honolulu and Las Vegas and San Francisco are among their number.  Smith Travel Research anticipates the  the industry will return to Year 2000 levels by 2003. 

However Bjorn Hanson, of PricewaterhouseCoopers, is less optimistic saying that any substantial recovery might take as long as  5-6 years.  Unsurprisingly the views of hoteliers and financiers are similarly mixed.  

As someone who focusses efforts at the badly impacted top end of the market Lawrence Geller, chief executive officer of Strategic Hotel Capital, is more pessimistic than most in his view that he thinks that a speedy return to work is unlikely for the thousands of  staff  who have been laid off.  Geller also has mixed feelings about measures taken by hotel companies since 9/11. �I am a critic and a fan of what happened after 9/11. I am a critic because across the country I have seen irrationality in cutting of rates and the haste to maintain revpar penetration without thinking of impact on bottom line.  There is a need for discipline to and forget revpar and to focus on that little discussed thing called profit,� he said.  

Juergen Bartels, chief executive officer of Le Meridien is channeling his efforts in other directions. He says that he is concentrating on converting his group from a traditional operations driven group to a marketing - driven company  with a new incentives scheme for the 100 strong sales force.  �This is a cyclical industry and even after September it is still cyclical,� said  Mr. Bartels.  

The toughest thing for all business since September ll, said Paul Whetsell, chairman and CEO of Meristar Hospitality Corporation, is to maintain a sense of business. � We reacted quickly to reduce costs but from day one we focussed on what could come out of this that  we could incorporate  in our operations and what things would stay.�

"A great deal of focus is put on rates but the most demanding problem is labour", said Paul Whetsell. �We have cut out a whole layer of labour but we also have trained some members of our administrative staff to work front of house from time to time."

"But pricing  is on most peoples� minds. We have discounted well beyond  the value of  the yield�, said Curtis Nelson. �With too many rooms being sold through wholesalers, when we give away the ultimate pricing decision that�s a very dangerous point - we are just admitting to be a commodity.� 

But  price cuts are not the answer, says Juergen Bartels. �Even if we took off £100 of a room in gateway city such as Rome it would not bring an extra traveler.� 

Instead the focus should be on cost, says Geller.  �By cutting out layers of management and some hotel services  which were not high yield, we have a wonderful opportunity not to put these things back,� said Lawrence Geller.