Friday, June 21, 2002 | 11:27 a.m.
The different sectors of the travel industry -- transportation, lodging and restaurants -- must work as partners to change public policy and revive tourism, an industry leader said in Las Vegas Thursday.
Jonathan Tisch, chairman and chief executive officer of Loews Hotels, said the events of Sept. 11 should serve as a rallying point to elevate the United States tourism industry. Tisch made his remarks in a keynote address that wrapped up the two-day Las Vegas International Hotel & Restaurant Show at the Las Vegas Convention Center.
Tisch said while there are signs the tourism industry is rebounding from 2001's soft economy and the effects of the terrorist attacks, occupancy and room rates at hotels are down and airliners aren't as full as they were a year and a half ago.
"People are still afraid," Tisch said. "The fear of airplanes has been replaced by the fear of airports."
Tisch, who chairs New York Rising, a task force set up by New York City's convention and visitors bureau to revive tourism after the attacks, said people also are afraid of being stranded away from their families in the event of another disaster and are staying closer to home when they do travel.
The solution to the problem, he said, is to offer incentives to people to travel. Some proposals have already been met with a lukewarm response by lawmakers -- a $1,000 tax credit for travel and the restoration of income tax deductions for business meal and entertainment costs and for spousal travel.
Tisch also said expanding and liberalizing Small Business Administration programs would help some of the small travel industry businesses that have been hurt in the past year.
Being united in efforts to convince lawmakers to make those legislative changes is critical, Tisch said. He also suggested the formation of an advisory council to the president on travel and tourism issues.
"It's a cabinet-level position in other countries," Tisch said of travel industry advisers to presidents and prime ministers of other nations.
Such a council could advise the president on another critical issue -- how to get international visitors back to the United States. About 50.9 million foreign visitors came to the United States in 2000, ranking it second behind France as a global destination.
"But there's virtually no international travel now," Tisch said, and part of the problem, he added, is the United States doesn't spend any money to market the nation as a tourism destination.
The governments of Spain and Mexico annually spend more than $100 million to promote their respective countries, but the U.S. government budgets nothing for tourism promotion to foreign countries according to statistics form the World Tourism Organization.
The Travel Business Roundtable, a coalition of travel industry chief executives that Tisch has chaired since 1995, has been working to educate and lobby lawmakers, but Tisch says a greater push is needed to boost the industry.
And many participants at the show -- the 23rd annual event sponsored in part by the Nevada Hotel & Lodging Association and the Nevada Restaurant Association -- concur the industry could use a boost.
A panel of experts earlier Thursday said it may be the third or fourth quarter of 2002 before occupancy and room rates return to pre-Sept. 11 levels.
Panelist Robert Baldwin, president of the Mirage Resort Group, a division of MGM MIRAGE, said the average room rate is still down 5 percent to 10 percent in Las Vegas, one of the cities that have rebounded fastest in the United States. While weekend occupancy is strong, Las Vegas continues to be plagued by weak midweek performance, indicative that the leisure market has come back stronger than the business market.
Those same trends are being seen by the airline industry, as companies have saved money by cutting into their travel budgets.
Panelist Peter Yesawich, chief executive officer and president of industry consultant Yesawich, Pepperdine & Brown, said many business executives "used 9/11 to implement a decision that had been on the back burner" since early 2001.
Panelist Mary Mahoney, president and chief executive officer of Howard Johnson International, said the weak economy and the terrorist attacks have forced hoteliers to be more efficient with resources at the same time that customers have become more sophisticated by using the Internet to choose where they stay. Using the brand name effectively online, she said, has never been more important in winning customers.
Baldwin said training has been increased to keep hotels operating at maximum efficiency. The downfall of some hotels, he said, has been "to be fat in the good times, then cut too deeply in the bad times." He added customers have always been sophisticated in finding the best prices for hotel rooms, but "the difference is that now we know it."
Panelists said while the hotel industry is looking for recovery to occur later this year, suppliers may not see an improvement until 2003 or 2004.
Many of the 350 exhibitors at the convention's trade show agreed that times are slow for suppliers, but how bad -- or good -- things are depend on the product being marketed.
"It's been tough," said Ahmed Ayoub of Courtesy Products, St. Louis, which supplies hotels with ironing boards, hangers, hair dryers, bathrobes and in-room coffee products.
"We had a lot more foot traffic (at the show last year)," he said. "Last year, we were getting leads left and right. Today, I've only had five leads in an hour and a half."
Esmail Suleiman of the Denver Mattress Co., which sells bedding supplies to hotels, said he heard complaints that business was slow, but he had no basis to compare since this was his company's first appearance at the show.
"We only need one or two strong contacts to make the show a success for us," he said, adding that retail mattress sales are making up for weakness in supplying the hotel industry.
Tom Dixon of Las Vegas-based Mission Industries, which sells uniforms, towels and linens for the hospitality industry and offers laundry and dry cleaning services, said business has rebounded dramatically after being off by about 20 percent immediately after the terrorist attacks.
Higher utility costs have helped make the show a success for PQL Inc., Los Angeles, which manufactures and distributes energy-efficient light bulbs to the hotel and restaurant industries.
"We've gotten a great response," said Andy Sreden, vice president of sales and marketing for the company.
And Selma Sayin's company is having a banner year in 2002.
The owner of Selma's Cookies, Altamonte Springs, Fla., said business is up about 10 percent over the previous year because "people are coping by eating comfort food."
The company began supplying cookies, brownies and Rice Krispies treats to Las Vegas resorts in 1995.
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