Zagat says N.Y. top of the heap for travel

By Nina Siegal
Bloomberg News Service

NEW YORK — New York is the most popular U.S. destination city among frequent travelers and people who work in the travel industry, according to the annual Zagat Survey of U.S. hotels.

Forty-one percent of 7,722 regular travelers — those who average 31 nights a year away from home — and travel agents polled on the Internet from March to May said New York was the best U.S. city to visit.

San Francisco was second with 23 percent, followed by Los Angeles, 10 percent, and Chicago and Las Vegas, both 5 percent.

Tourism contributed $25 billion to New York's economy in 2000, the most recent year for which records are available, and supported about 282,000 jobs, according to NYC & Co., the city's convention and visitors' bureau. Hotel occupancy is 1 percent to 3 percent lower compared with August 2001, and room costs dropped an average of 10 percent to 15 percent.

"New York has come through this incredibly difficult time without a seriously damaged image in the eyes of Americans and American travel agents," said Tim Zagat, chief executive and co-founder of the Zagat Survey LLC, which produces a guidebook to the U.S. hotel industry and restaurant guides to 70 international cities.

Cristyne L. Nicholas, president of NYC & Co., has said the number of visitors would increase this year to about 32.3 million from 32 million in 2001, and tourist spending would drop an estimated $1 billion.

"We're expecting very strong occupancy in this holiday season, but it's much cheaper," she said.

The U.S. hotel and resort industry is struggling and the revenue per available room, a measurement of hotel earnings, declined 2 percent to 6 percent this year compared with 2001, said William Marks, managing director and senior analyst at JMP Securities. He said it might grow 2 percent to 5 percent in 2003.

"There has been some recovery since October 2001, but certainly not as much of a recovery as we would have expected just six months ago," Marks said.

Zagat said room rates have declined as much as 30 percent.

"The market has shifted to a buyer's market," he said.

Thirty percent of frequent travelers said they are less likely to fly and more likely to drive, according to the survey. Of those who are flying less, 31 percent said they were concerned about airport procedures, 26 percent said they were worried about safety, and 13 percent said their air travel had diminished because of decreased business travel budgets.