ean-Jacques Reibel, like many hotel
managers, has seen his share of cancellations, particularly in the
wake of 9/11 and now with the U.S military action in Iraq. But even
Reibel, who runs the historic Willard InterContinental in
Washington, was left befuddled by what happened the day before
April Fool's Day.
That's when the Willard, an architectural grand dame that's
considered one of Washington's preeminent hotels, received 150
cancellations.
The wave of cancellations was unusual because it didn't center
around a particular meeting, tour or convention group.
Astonishingly, the calls came throughout the day as 150 people from
around the world, one at a time, independently decided to cancel
his or her travel plans to Washington.
By any measure, it was a tough day for the Willard.
The high number of cancellations didn't go unnoticed by the
hotel's staff, so Reibel held "town meetings" with all of the
employees and a second meeting with the hotel's managers.
"They are very much worried about their jobs," Reibel said.
"They have seen layoffs in the airline industry and various [other]
industries, so, of course, they are worried."
Since the war started, Reibel said, the call volume on the
Willard's reservations lines has dropped about 25%.
Reibel said during slow times, the hotel does reduce the hours
of some employees.
"But we certainly don't want to lay off people," Reibel said. "I
think this is a [temporary problem], and the business in one or two
months will come back."
Supply and demand
Meanwhile, Reibel said, the hotel is carrying on, and occupancy
levels, which hit 80% in March, are solid.
"We did very well last month, but in order to sell rooms, we
have had to discount. It is just like a retail shop. When business
is slower, they have to have a fire sale. What we have to do in
order to book business is lower our rates. By lowering our rate we
were able to get a very good occupancy," he said.
Reibel said he expects to hit an occupancy level of about 75% in
April.
"It is an excellent occupancy," he said, "but the rate is not
what it was last year. Or even in 2001."
The stresses and strains at the Willard are being played out, in
varying degrees, in a wide range of hotels and resorts as the
lodging industry copes with an ongoing downturn in travel triggered
by terrorism and war.
In addition to wrestling with the age-old questions of supply
and demand, hotels and hotel workers are trying to do the right
thing.
The cocoon syndrome
At the Marriott Marquis, in the heart of New York's theater
district, employees in recent weeks noticed an increase in
"cocooning" by business travelers. In response, Marriott changed
its menu for in-room dining to include more comfort foods.
A spokeswoman said, "We want people to go out, but if they are
staying in their rooms, we might as well make it fun and make some
money."
At the Derby Alma Hotel in Paris, the giant plasma TV screen in
the lobby used to be tuned to the latest war news, but director
Zeina Bawab said guests demanded that she change channels.
"Customers say guests who want to watch the news should do so in
their rooms," she said.
The 32-room hotel -- a Best Western Premier property where U.S.
visitors normally account for 75% of bookings -- cut rates by 50%
through April 30 after reservations dropped in half two weeks
ago.
Bawab said the response has been good.
At the Hilton-owned Waldorf-Astoria in New York, management
decided to close the hotel's Peacock Alley restaurant soon after
9/11, leaving only one restaurant in the hotel -- Oscar's --
serving breakfast.
Peacock Alley was a popular breakfast spot but did poorly during
lunch and dinner, a spokeswoman said. Still, the closing has been a
nuisance for guests who need to conduct a breakfast meeting in a
more formal space.
A concierge at the Waldorf said he recommends Terrance Brennan's
Seafood & Chop House at the Benjamin Hotel across the street to
guests who want a quieter and more formal spot to conduct business
because the "buffet breakfast at Oscar's can get a bit loud."
Hot tickets
Josephine Danielson, chef concierge at the Four Seasons New
York, said that despite the war, "Four Seasons guests expect the
same level of service."
"The reality is that people must travel to New York for
business, and they still need to get work done," she said.
Danielson added that the city's most popular restaurants still
are hard to get into, and many Broadway shows remain "hot
tickets."
However, Yvette Wulff, concierge at the Grand Hyatt, next to
Grand Central Station in New York, said guests seem to be seeking
cheaper restaurants, adding, "Not many are requesting French
restaurants."
Even before the start of the war with Iraq, hotels were trimming
costs by cutting or reducing services and staff.
A report by PricewaterhouseCoopers said the hotel industry's
aggressive cost-cutting efforts during the past two years have
brought the average break-even occupancy to a record low of 47.4%,
down from approximately 60% in the mid-1990s.
According to the report, about 40% of hotels reduced sales and
marketing budgets in the last two years; some 60% of hotels
eliminated front-office manager and assistant manager positions;
and approximately 60% reduced the hours of operation of services
and facilities like room service and fitness rooms.
The war, meanwhile, is keeping travelers at home, according to
tracking firm Smith Travel Research, which reported that the hotel
industry suffered a sharp drop in occupancy, average daily room
rates and revenue the first week of the war with Iraq.
For the week ended March 22, occupancy dropped 4.8%, to 61.8%;
the average daily room rate dipped 3.8%, to $83.69; and revenue
earned on occupied rooms, or RevPAR, fell 8.4%, to $51.76.
Nadine Godwin, Kenneth Kiesnoski, Michael Milligan and Jorge
Sidron contributed to this report.