November 01, 2001
Meetings & Conventions: Newsline newsline.gif (8042 bytes)   CHAINS SHELVE PLANS, CUT STAFF NATIONWIDE
Hotel Market Hangs On for Recovery
Robert Moore of Starwood Already hurting from a lackluster economy, hotels were dealt a severe blow by September's events. As occupancy levels in some cities plummeted to 40 percent and below, many chains were forced to lay off or furlough staff and shelve projects.

White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide was the first to cut staff. Some 12,000 were laid off, and $3 million worth of construction projects were deferred. In September, PricewaterhouseCoopers estimated 6 percent of hotel projects scheduled for completion in 2002 and 2003 would be canceled or deferred.

In October, Dallas-based Wyndham Hotels & Resorts announced 1,600 workers would be let go, following layoffs of 850 earlier this year. Wyndham also halted nearly all capital expenditures. Both Loews Hotels and Marriott International cut staff hours to trim operational costs.

Some hoteliers remained optimistic. "I don't expect any deterioration in service," said Robert Moore, Starwood's executive vice president of sales and marketing, North America, and senior vice president of global sales. "When occupancy increases, we will ramp up quickly," he added.

Mike Beardsley, senior vice president of field sales for USA and Canada at Bethesda, Md.-based Marriott International, concurred. "People have to get back to business," he said. "When they do, we will adjust our staff accordingly."

Steve Armitage, senior vice president, sales, of Beverly Hills, Calif.-based Hilton Hotels Corp., said some lost business has been rebooked for early 2002. By late September, he noted, the property's occupancy rates were near 85 percent of pre-Sept. 11 levels.

"Our greatest exposure is whether groups scheduled for the next few months will come through with their projections," said Jill Cady, Atlanta-based director of business development North America for Six Continents Hotels.

Analysts agree that recovery will take time. "I suspect we won't see any real improvement until the second half of 2002," said Robert Mandelbaum, director of research for PKF Consulting in Atlanta.


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