NYC Scrambles for Visitors

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SUFFERING RECORD LOSSES, SUPPLIERS GET CREATIVE
NYC Scrambles for Visitors

Near ground zero: Lower Manhattan's Millenium Hilton has not set a date to reopen following Sept. 11.
PHOTOGRAPH COURTESY OF FEMA At ground zero of a battered industry, hotels and tourism groups in New York City are initiating a barrage of efforts to restore confidence among travelers. Most expect, however, the road to recovery will be long.

While hotels have reported some return of clients since Sept. 11, rates are "way down" from last year and from pre- attack levels, said Sean Hennessey, director of hospitality consulting at PricewaterhouseCoopers. "Hotels are gaining back the demand, but it is coming at a cost."

Lower rates are expected to continue, he said. "There will be strong pressure on room rates well into 2002."

Hardest hit have been boutique and luxury hotels, added Hennessey, a trend prior to Sept. 11. He also predicted up to 10 hotels will file for bankruptcy.

Some properties are recouping losses by renting out space to corporations. Among them are the Sheraton New York and Sheraton Manhattan.

One unprecedented move was an arrangement worked out by Mayor Rudolph Giuliani and Delta Air Lines to give away 10,000 airline tickets to the city.

Actions taken by the Hotel Association of New York City include a work-sharing agreement that allows employees to voluntarily reduce work hours to avoid others from being laid off.

As to how long these efforts will go on, Joseph E. Spinnato, president of the Hotel Association, said, "It's going to last as long as it takes to get the city back to 85 to 88 percent occupancy. That's not going to happen until people get back on airplanes."

• CARLA BENINI