By Campbell, Steven E.
Diversity Employers , Vol. 32, No. 2
Two years ago, the hospitality industry was economically sound with bright prospects for continued profitability. The travel industry, international lodging in particular, was exceeding analysts' predictions thus securing record corporate profits. However, the year 2001, with the change of White House Administrations, corporate downsizing, escalating fuel prices, "mad cow" disease, and the unforeseeable, barbaric attacks on the United States last fall, brought forth an industry in turmoil. All aspects of the hospitality/travel/tourism trade have suffered enormous losses. However, as the economy and consumer confidence continue to stabilize, demands for industry professionals increases. In addition, last fall Congress held hearings to discuss a number of aid packages designed to boost the travel/tourism economy.
Several prominent hospitality executives spoke to Congress. Jack Connors, executive vice president for governmental affairs of the American Hotel and Lodging Association (AH&LA) noted:
* The lodging industry has 53,500 properties with 4.1 million rooms located throughout the nation.
* In the year 2000, the tourism sector not only supported more than 7.8 million jobs, but directly and indirectly employed one out of every seven Americans.
* In 2000, the tourism sector paid $171.5 billion in travel-related salaries and $99 billion in federal, state, and local taxes.
William S. Norman, president and CEO of Travel Industry Association of America, stated during his appearance before Congress, "The primary reason for NOT traveling is finances and time, not safety." Norman further stated, "The good news is that we are seeing travel return to some levels of normalcy. But, these are still very fragile times for the industry, and gains could be lost quickly if some events further shake consumer confidence in the U.S. economy."
As a result of the hearings, Congress passed several packages to assist the hospitality industry. Following the Federal government's lead, many state and local municipalities have initiated marketing campaigns to encourage domestic and international travel to the United States. The states that have suffered the most for decreased tourism are New York, Florida, California, Hawaii, and Nevada.
Travel and Tourism
The United States Government finally acknowledged the importance of the hospitality industry, in particular, the travel/tourism segment. Few people realize that a large portion of the GNP is derived from tourism dollars. Consequently, as the traveling public diminishes, so does "tourism commerce" which, in turn, produces a negative economic impact on peripheral services such as ear rentals, furniture manufacturers, small businesses at travel destinations, and uniform manufacturers, etc. Grapelynn Fengress, Conference and Meetings manager for the State of California (Education Branch) notes, "Based upon actual and projected bookings, conferences are expected to improve through 2002 bringing much needed revenues to the California economy."
* More than 75% of all vehicles rented are from airports.
* Companies such as Hertz, Avis, and Enterprise purchase tens of thousands of new cars from the "Big Three" auto makers, thus insuring employment for the auto industry.
* Manufacturers of computers, furniture, telephones, uniforms, flatware, etc. depend largely on the business received from hotels and resorts.
* Small businesses at travel destinations both domestically and internationally have felt the rippling effect of an injured tourist market.
Revised Arrival Forecasts
Forecasts of arrivals to the United States for 2002 and beyond are being revised by the Department of Commerce, the International Trade Administration, and the Travel Industry Association of America based upon the markedly decreased numbers from the previous year. …