The US summer travel season is shaping up to be better than had been expected, with the impact of government security alerts fading and foreign travellers looking to take advantage of the weaker dollar, senior US hotel executives said.
Voicing cautious optimism, the executives forecast a good season for driving vacations, although they added that there were still plenty of risks to that forecast, from the state of the economy to the potential spread of the Sars illness.
The US government's "orange" mid-level terrorism alert ahead of the May 26 Memorial Day holiday did nothing to slow the unofficial kickoff to summer travel, said the heads of Marriott International Inc., Hilton Hotels Corp. and Carson Cos., the owner of Radisson hotels.
That is a different story from just after the September 11, 2001 attacks and around the outbreak of the US war on Iraq, when alerts appreciably slowed travel.
"We didn't get any impact at all. We were very concerned that we would," Marriott Chairman and Chief Executive J.W. Marriott told journalists at a hotel industry conference.
"All Americans pretty much understand that nothing changes with orange alert status. I doubt that many people value that as much of an indication as to how to behave," said Stephen Bollenbach, president and chief executive of Hilton Hotels.
Marilyn Carson Nelson, chairman and chief executive of Carson Cos., said that her company's cruise ship and hotel operations had seen a pickup in business in the last couple of weeks.
The falling value of the dollar compared with the euro was helping lure Europeans to the United States, she said.
Florida, easily accessible from Europe, would especially benefit, said Bollenbach and Jonathan Tisch, chairman and chief executive officer of the Loews Hotels unit of Loews Corp. and also chair of the hotel conference organised by New York University.
"We are very optimistic about our business down in Florida," he said.
Smith Travel Research Chief Executive Randell Smith forecast that for all of 2003, revenue per available room, a key barometer of industry health, would rise 1.4 per cent, mostly due to a slight increase in room rates, for which the industry longs.
The summer looks good partly because the past couple of years have been very bad.
"We are bullish, but only relative to where we've been," Henry Silverman, president, chief executive and chairman of Cendant Corp., told the conference. Cendant owns travel Web sites, Avis car rental and Days Inn hotels.
Marriott said that the Sars virus which has swept through Asia could be devastating if a major outbreak happened in a US city. He said he was "cautiously optimistic" on the industry outlook but warned: "You've got Sars; you've got terrorism threats; you've got the war."