Sep. 21--Arizona hotel lobbies, restaurants and meeting rooms sit empty, as nearly every out-of-town group scheduled for the last half of September has cancelled. As the hoteliers ponder what will happen next month, they are hurting but hopeful in the wake of the terrorist attacks on the World Trade Center and Pentagon. Since then, the airline industry has been in a tailspin, and the potential negative fallout on the travel industry is growing. Many local hotels say the cutbacks by virtually all domestic airlines, including Tempe-based America West, erase any hope about a rapid recovery. 

"The impact will be tremendous," said Debbie Johnson, executive director of the Valley Hotel & Resort Association. "We hope the airlines get help, and we hope the public feels safe flying again. We're hearing some single-digit occupancy rates (the percentage of available rooms that are booked), and you can't support a hotel on those occupancies." 

"This is the lowest occupancy I've ever experienced, " said Tom Silverman, general manager of the Chaparral Suites Hotel in Scottsdale. Silverman's family has operated a hotel in Scottsdale for more than half a century. Neither Silverman or several other East Valley hoteliers queried would reveal September occupancy rates. 

But David Muth, general manager of the Hilton Phoenix East/Mesa said his hotel lost $125,000 worth of booked business in September, and so far $100,000 worth already canceled October meetings. 

Nationally the picture wasn't any prettier. 

Smith Travel Research, Memphis-based national hotel industry trackers, said Wednesday U.S. hotel room nights sold for the week of Sept. 9-15 were 2.8 million less than the same week a year earlier. And room revenue plunged more than $318 million for the week, or about $45 million per day. 

Arizona, and especially Maricopa County, is a "fly-in market," said Mark McDermott, executive director of the Arizona Office of Tourism. McDermott spoke Wednesday to Valley Hotel & Resort Association members at the Hilton Scottsdale Resort about the dire situation and asked the hoteliers to lobby Congressional leaders to pass a proposed $24 billion bail-out of the airline industry. 

"The bottom has fallen out," McDermott said. "We're in a difficult situation." 

About 40 percent of the Valley's visitors come by plane, McDermott said. And 36 percent come from at least 1,000 miles away. The percentages are much higher for the "high-value" travelers who stay in resorts and spend a lot of money in Arizona, he said. 

About 90 percent of the Doubletree Paradise Valley Resort's guests come by air, said general manager Don Bomer. He agreed with McDermott the airline industry's recovery is essential to local tourism. "If the airlines hurt, we hurt," Bomer said. So far this week, the airlines have slashed flights and more than 100,000 jobs, but McDermott said that for every airline job cut, five or six jobs in related industries will be lost. 

Many of those are in hotels, as empty rooms and empty resort restaurants have caused hoteliers to trim expenses and workers' hours. 

Several East Valley hoteliers said they are hoping to avoid layoffs despite the lost business. But as much as 50 percent of a hotel's staff may be working in hourly jobs that are based on business volume, Bomer said. So if there aren't enough rooms to clean or restaurant diners to serve, workers in those jobs get severely reduced hours. 

"There's no question tourism is in a terrible situation," said Ann Lane, marketing director of the Hyatt Regency Scottsdale Resort at Gainey Ranch. "And business dictates staffing. Obviously our business dropped drastically, and managers have to schedule employees based on house counts." 

So while they are not out of work permanently, a lot of hotel employees around the Valley are working shorter and fewer shifts, the hoteliers said. 

And that impacts the whole local economy, said Rachel Sacco, president of the Scottsdale Convention & Visitors Bureau. 

"Just like we say the benefits of tourism trickle through the community, a tourism slow down does too," Sacco said. "If the airlines aren't flying, the hotels will have less guests and will schedule fewer employees. That will have a big ripple effect because they'll cut back on spending, filling their gas tanks, buying goods, eating in restaurants. This permeates through the community." 

Getting airlines flying full schedules again will be important, said Francis Kercheval, local hospitality industry consultant. But just as critical is persuading Americans that it's safe to fly on them. 

Several East Valley hoteliers said they are seeing hopeful signs as several groups that canceled in September have said they are planning to re-book in November or December. 

About 60 percent of the groups that cancelled September bookings at the the Fiesta Inn in Tempe said they plan to come later in the year, said general manager Sherry Henry. 

Shaun Robinson, general manager of Hilton Resort Scottsdale, said many of his cancellations are re-booking for late in the year too. 

But for many East Valley hoteliers, October business is up in the air. While groups haven't officially canceled, many have called to say they are waiting to see what happens next before making a decision about whether to keep the business on the books, the hoteliers said. 

But even if more than half the canceled business re-books later, it won't be enough to save the year, Kercheval said. 

"This month has been such a disaster, and this market wasn't healthy to begin with," he said. 

McDermott said that if something isn't done nationally and locally to bring back business, the impact could extend through the winter tourism season. "Winter markets like Arizona will be hurt the most , especially if this leads us into recession," he said. 

McDermott and the leaders of Valley and state hotel groups and convention and visitors bureaus plan to meet today to plot positive action, he said. 

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(c) 2001, The Tribune, Mesa, Ariz. Distributed by Knight Ridder/Tribune Business News. AWA, HLTGY,