N.Y. hotels, attractions suffer steep downturn

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NEW YORK -- From hotels to tours to Broadway, the $25 billion tourism industry here is suffering from a sharp drop in business following the attacks on the World Trade Center.

The city's hotels, which had been hoping for a rebound after a drop in business travel, are grappling with some of the lowest occupancies in history.

John Fox, senior vice president of PKF Consulting's hospitality practice, said the big question concerns the long term -- whether there will be a fundamental change in traveler attitudes.

A widespread fear of flying might prove temporary, but if people stay home because they don't want to deal with airport security, the impact might be lasting, Fox predicted.

In addition to coping with reduced demand, Marriott and Hilton were directly impacted by the loss of hotels in the financial district.

Five Broadway shows were expected to close as a result of the dearth of tourists. Marriott said it had 940 guests registered at its World Trade Center hotel and 620 at the Financial Center hotel at the time of the attacks.

The company moved its displaced guests into eight hotels in the city and is issuing refunds for unused portions of prepaid bookings. It also waived cancelation and no-show fees worldwide until Sept. 26.

Hilton said guests displaced from the Hilton Millenium and the Embassy Suites Battery Park were moved into its other four hotels in the city. Hilton waived cancellation and no-show fees companywide for individual travelers through Sept. 30. It waived cancellation fees on events and groups through Oct. 31.

Other hotels are coping with empty rooms by dropping rates and hoping for the best. One hotelier said as many as half of the city's 30,000 hotel workers could lose their jobs.

At New York-based Quikbook.com, the online hotel reservations firm, New York business dropped by half.

To boost bookings, just about all of Quikbook's 100 New York hotels have dropped their prices by at least 50%.

The Parker Meridien, for example, dropped its rates from $289 a night to $179, while prices at the Bentley, the Marcel and the Ameritania fell to $95 from more than $200.

At the city's five Apple Core hotels, occupancy fell from more than 80% to as low as 40%, said Vijay Dandapani, chief operating officer.

With the influx of relief workers, "the guest mix also has changed completely.... In terms of tourists, only 30% of our guests are real tourists," Dandapani reported. Apple Core also dropped its daily room rates by 33%.

The city's convention business also is suffering. The U.N. postponed its annual General Assembly, scheduled for Sept. 24 to Oct. 5, citing security considerations.

George Kurth, director of reservations for Manhattan East Suite Hotels, said the U.N.'s decision will cost the hotel company "more than $1.5 million" in canceled bookings.

"We were expecting 95% occupancies through the end of October at our 10 hotels," said Kurth. "Right now we're down in the 40s."

Tour and sightseeing firms, meanwhile, are reporting some encouraging signs.

"It's almost as if someone pressed a button," said Joel Cohen, vice president of New York City Vacation Packages. "We started getting phone calls asking for availability. It's a very good sign. It's the first time in a week and a day that we are starting to get a substantial number of inquiries."

Robin Tauck, co-president of Tauck World Discovery, said the company hasn't had to curtail any itineraries, and hasn't seen a rash of cancellations.

As for New York's resilience, she said, "We were about to put an independent city package on the market for 2002, short city tours in Tauck style. We had to decide whether to put these on the market. We decided to go ahead."

Mike Alvich, vice president of sales and marketing of Gray Line New York said, "We're getting calls from Nevada saying, 'We can't get there this week, but we're going to come the next week. We're not going to let you down.'"

Alvich said Gray Line's numbers are down, but "are growing every day."

It might, however, be too late to save some Broadway shows, five of which were expected to close last weekend as a result of lost business: "The Rocky Horror Show," "Stones in His Pockets," "A Thousand Clowns," "If You Ever Leave Me, I'm Going With You" and "Kiss Me, Kate."

Business at Theater Direct International is down 50% since the attacks, and bookings at its Broadway.com Web site are a mere 20% of normal. But Maupintour president Heinz Niederhoff predicted that New York's woes will be temporary.

"New York will always be a magnet. If anything, this has pushed it more into the forefront. People from all over the world will say, 'I want to see New York. I want to see what it's about, to see the people.' In the long run, New York will be the winner."

David Cogswell contributed to this report.

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