- The Washington Times - Friday, August 23, 2002

Bargain-basement prices and increased airport security since September 11 have enticed leisure and business travelers, but a new survey from the Travel Business Roundtable and Orbitz, the online airline reservation service, shows economic uncertainty is the biggest factor keeping Americans at home.

"Though lower prices and increased security measures have helped get Americans traveling again, the ongoing economic uncertainty in the U.S. is a barrier to the industry's recovery," said Jonathan Tisch, chairman of the Travel Business Roundtable, an organization that works to increase government and public awareness of the travel industry.

"With consumers seeing their savings significantly decreased or wiped out by the recent performance of the stock market or their 401(k) retirement plans, they are cutting back on discretionary spending, including travel," Mr. Tisch said.

The good news: Nearly 90 percent of Americans are traveling more or at about the same level as before the September 11 terrorist attacks.

However, frequent business travelers who make up the majority of the industry's revenue because they tend to pay higher airfares and stay in pricier rooms continue to make fewer trips.

"We can be optimistic if the economy moves forward in a constructive way," said Jeff Katz, chairman and chief executive of Orbitz.

In an effort to increase traffic, hotels and low-cost airlines have slashed prices. This appeal to cost-conscious travelers has worked.

"Overall traffic levels are up," said Tom Oliver, chairman and chief executive of Six Continents Hotel, which owns Holiday Inn, Crowne Plaza and Inter-Continental Hotels and Resorts.

"There's a lot of desire to travel stimulated by the low fares and low hotel rates."

But the lower rates make it "difficult to pay the bills associated with the business," Mr. Oliver said.

In the District, hotel occupancy is about 74 percent a 1 percent drop from a year ago, said William A. Hanbury, president and chief executive of the Washington, DC Convention & Tourism Corp.

But rooms cost less and revenue is down. The average hotel rate in Washington is $151 about $10 less than a year ago, he said.

The average room rates around the country are between 5 percent and 15 percent lower than they were a year ago, but "we still remain a fairly profitable industry," said Mr. Tisch, who is chief executive and chairman of Loews Hotels.

Industry officials say a drop in the number of international travelers, who spend six times more than domestic travelers, and a nonexistent national marketing budget are hurting the industry significantly.

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