The need to revive the sick economy with bailouts and a stimulus package has prompted a lot of chatter about the industries of banking, automobiles and construction. But scant attention has been devoted to one of America's largest corporate sectors: Travel/Tourism.
According to the U.S. Travel Association, the tourism industry is the fifth-largest in the nation, yet, to the chagrin of some professionals working in the battered sector, it is not among the proposed beneficiaries of the $790 billion stimulus package that is being finalized this week on Capitol Hill.
"I think it is really amazing that there was nothing there to try to promote travel and tourism," said Angela Gonzalez-Rowe, president of the Hispanic Hotel Owners Association. A few years ago, she added, the governments of several Latin American countries stepped up their promotion of tourism in an effort to revive the economy, and it worked.
"When you think about travel and tourism, and the means of transportation to a destination -- you can travel by car, by plane, even by boat -- and then the hotels, and all the food chains and shopping outlets, there's a whole segment of business that is inter-related," she said.
Roger Dow, president and CEO of the U.S. Travel Association in Washington, D.C., sounded a similar alarm in a press release early this week, shortly after the Senate passed its first version of the stimulus package. (The Senate and House are both expected to vote on a final version as early as today; President Obama said he hopes to sign it before Monday.)
Though Dow generally voiced approval of the package, he also lamented "that neither version of the stimulus package includes language to create a nationally-coordinated travel promotion campaign . . . and welcomes more overseas visitors to the United States."
Regardless of whether the government should give the industry a shot in the arm, this much is certain: the tourism trade is reeling.
After holding steady for the first 12 months of the recession, business went into a free fall a couple months ago, Gonzalez-Rowe said.
During the middle week of January, occupancy in U.S. hotel rooms fell 13 percent below what was posted for the same time frame a year ago, according to Smith Travel Research, which bills itself as the nation's leader in lodging-industry research. Revenue was down even more, because room rates across the United States have dropped by 4 percent.
Put another way: Even as rooms get cheaper, the number of travelers continues to shrink. And, unfortunately, economists see no end in sight for this year.
The slowdown has led to widespread layoffs.
For instance, at Benchmark Hospitality, the umbrella organization for some 30 hotels across the country -- most of them geared toward business travel -- about 1,500 of the company's 6,000 jobs have been lost. (Some have been eliminated through hiring freezes rather than layoffs.)
Burt Cabanas, the company's Chairman and CEO, said he's seen his share of serious slumps over the years, but never one like this, in which the rebound seems so far away.
By comparison, Cabanas pointed to the crisis that swept over the industry in the wake of the Sept. 11 terrorist attacks. In that case, he knew it wouldn't be long before peoples' air-travel jitters died down. This time, he said, the light at the end of the tunnel seems more distant: "I believe all the way into 2009, and probably through the first quarter of 2010."
Still, Cabanas doesn't quite buy into the notion that the tourism industry should receive a bailout or be included in the stimulus package.
"I just wonder how you would do that," he said, adding that he thinks a travel-industry bailout would be even more complex than the bank bailout, which he believes has largely been a failure so far. "I think the simpler the better."
Carlos Rodriguez, executive vice president of Driftwood Hospitality Management -- whose 25 hotels across the nation range in scale from the Holiday Inn Express to Crowne Plaza -- said while the crisis of 1991still tops his worst-ever list, the current one may soon surpass it.
Hardest hit, he said, are his upscale Crowne Plaza hotels in Minneapolis and Cleveland. Interestingly, the company's most successful property at the moment is the Flamingo Beach Resort in Costa Rica.
Rodriguez speculated that this owes partly to how many high-end travelers are choosing to go to Costa Rica in lieu of more expensive destinations, like Europe.
All in all, though, things aren't good, he said.
"We're really hurting, and we expect it to be a bad year," he said.
Meanwhile, of the 175 Hispanic-owned-or-operated hotels affiliated with the Hispanic Hotel Owners Association, none have had to close down due to the economic turmoil, said Gonzalez-Rowe.
"Generally in the lodging business, we try to save for that rainy day," she said.
Hopefully, most businesses have enough reserves for a rainy year.
