The September 11th attack
U.S. hotels hurting, but see upturn

Bloomberg News Service

Hendersonville, Tenn. — Demand for U.S. hotel rooms fell by more than one-third last week from a year earlier as the Sept. 11 terrorist attacks fanned fear of flying, a report found.

Revenue per available room, a measure of average occupancy and daily room rate, fell about 37 percent for the week ending Saturday, after falling 20 percent the week of the attacks, according to Smith Travel Research.

The one-week drop may herald a longer slump for the hotel industry.

"There are a lot of people that aren't going to fly for 60 to 90 days, period," said Michael Guerrasio, a partner and hotel consultant with KPMG LLP.

The Standard & Poor's Hotel/Motel Index has fallen 23 percent since Sept. 11. As many as half of the 1.5 million people who work for U.S. hotels and restaurants may be laid off, said Matt Walker, general vice president for the Hotel Employees and Restaurants Employees International Union.

So-called "upper-upscale" hotels, which include Ritz-Carltons and Four Seasons, fared worse than lower-priced properties, Smith Travel said. Revenue per room fell 62.1 percent, compared to a 15.2 percent at economy chains.

But there are some signs that travel is picking up. Average daily rate and occupancy increased as the week went on, the Hendersonville, Tenn.-based firm said.

The revenue figures are "reflective of the cancellations of events that took place the week after (the attacks)," ABN Amro analyst Joseph Greff said. "I would expect October and November to show gradual improvement."