Ask most hoteliers and they'll tell you the same thing: These are desperate times in the hospitality business. The economy was already weak and hotel occupancies were already low when the Persian Gulf War commenced Jan. 16.
Since then, it has become hard to detect a heartbeat at some U.S. hotels. Now those hotels, along with a few large hotel chains, may soon be joining airlines such as Pan Am, TWA and Continental on the endangered species list.
A random sampling of major hotels throughout the country revealed that occupancies which averaged 64%--and higher--at this time last year are now hovering just above 30%.
Many businesses that have already banned overseas travel for their executives, among them the conglomerates Corning and Bayer, are now frowning on domestic travel as well, opting for large conference calls and liberal use of fax machines.
In a Jan. 22-23 telephone survey, Runzheimer International, the Rochester, Wisc.-based travel and management consulting firm, found that of businesses queried on the subject of domestic travel, 36% said that there had been some change in their travel guidelines. However, when the subject of international travel was broached, 62% reported having altered policy, including severe reductions in overseas travel. Only 38% reported business as usual.
Not surprisingly, many large hotel chains find themselves confronted with a major cash squeeze. For example, the Marriott Corp. announced recently that a group of major banks had agreed to lend the company up to $400 million to help meet its debts and cover losses caused by the drop in travel business.
When air traffic dropped after Iraq invaded Kuwait Aug. 2, many airlines discounted fares. Then, a number of airlines reintroduced triple-mileage programs for their frequent fliers.
With significantly fewer people flying, hotels felt an immediate--and large--hit. And now, many hotels are copying the airlines and offering their own version of triple-mileage programs for frequent travelers.
"We're trying to remain calm and maintain business as usual," says Werner Braum, senior vice president of the Ramada Inn Corp. "We don't want to panic."
Still, Braum reports a major slowdown in business, though he declined to offer specific numbers.
Ramada's old frequent-stay program awarded 10 points for every dollar spent by guests. Between now and April 30, Ramada will award 30 points for each dollar spent. Accumulated points can be used for free rooms, rental cars and airline tickets. For example, 40,000 points now gets you three free nights at any Ramada, plus two free weekend days of rental car use.
Marriott just announced that members of some airline frequent-flier programs can double their bonus miles received from the hotel every time they stay at any of the chain's 223 hotels, resorts or suites worldwide. What this means is an additional 1,000 or 2,000 airline miles per stay, depending on the participating carrier.
Through March 31, frequent fliers get double airline bonus miles when they stay at Marriott and fly Delta, Continental, Northwest, USAir or the Trump Shuttle.
Hyatt has launched an aggressive marketing campaign to award free hotel stays to frequent travelers. Until April 30, any Hyatt Gold Passport member who stays just three times at any Hyatt hotel--worldwide--will receive a certificate good for one free weekend night at any Hyatt hotel in the United States or Canada. If you stay five nights, you get two free weekend nights.
Note: If you're not currently part of the Hyatt program, don't worry; the hotel chain is only too glad to accommodate new members. It's free. Call (800) 634-9288.
Confronted by low occupancies at hotels in the United States and abroad, InterContinental recently launched its USA Plus '91 program. With this deal, travelers staying a total of nine nights at any of 39 InterContinental hotels in North America between now and Dec. 31 receive a free ticket on any one of four partner airlines (American, United, SAS or Pan Am), to destinations in Europe, Hawaii and the Caribbean, in addition to the continental United States and Canada.
In years past, InterContinental tried similar programs during slow travel periods. But back then, travelers needed to stay just seven nights, paying regular rates, to qualify for the free airline ticket.
The new nine-night program requires guests to pay the special USA Plus '91 rate. But don't pack your bags just yet. In many cases, these rates are even higher than most published room rates.
For example, the USA Plus '91 rate for a room at the Hotel InterContinental in Chicago is $210. But the regular rate for that room is just $180. (And the hotel is now discounting the same room for $125 a night.) If you stayed at that hotel for nine nights to earn your free trip, you'd spend $1,890. At the discounted rate, you would only be spending $1,125.