Hotels could suffer as vacationers turn thrifty
NEW YORK (Reuters Life!) - The tough U.S. economy will force most Americans to cut vacation costs this summer which could be bad news for hoteliers, according to a new survey released on Tuesday.
About 57 percent of the nearly 6,700 respondents to the online poll said they have less money to spend this year on summer vacations than they did last year and are looking to save costs.
Jitters about the U.S. economy and record average gasoline prices of $3.60 a gallon are forcing Americans to cut vacation costs, said Jim Kovarik, the general manager for AOL Travel, which commissioned the poll.
Nearly 20 percent of people said they planned to rent a house so they could save money by cooking their meals, rather than stay in a hotel, the poll showed. And nearly a third planned to stay with friends or family to save money.
This summer could be the worst for U.S. hotels since 2002, the first vacation season after the September 11 attacks on New York and Washington, D.C., Kovarik, said in an interview.
"Year after year after September 11, hotels had started to come back and capacity increased," Kovarik said.
"Heading into this year there was a lot of concern about the economy factors. They are anticipating a tough year."
But Joe McInerney, of the American Hotel and Lodging Association, said high gasoline prices simply mean travelers will go on short trips instead of long trips, and stay at hotels closer to home. The weak dollar could also mean that more Europeans and Canadians will vacation in U.S. hotels.
"Advanced reservations are strong for the summer," McInerney said in an interview.
Still, the weak economy has already hurt profits at some hotels. Earlier this month, Marriott International Inc the world's No. 3 hotel operator, reported sharply lower quarterly profit, hurt by higher costs as the slowing U.S. economy takes its toll on travel spending.
Starwood Hotels & Resorts Worldwide Inc, which operates the W, Sheraton and St. Regis hotel brands, also reported lower quarterly profit last week, with CEO Frits van Paasschen citing slowing growth in revenue per available room, a common industry measure of growth.
(additional reporting by Bill Rigby)
