Swine flu fallout

It might have been a well-intentioned admonishment, but its economic impact could hurt
hospitality venues hoping for room reservations to accelerate this autumn in a recovering economy.

“Cancel business conventions, conferences, meetings and socials,” advised the Connecticut Department of Public Health this summer, as one possible way for the state to check the spread of the novel H1N1 influenza virus this fall and winter.

That ounce of cure could prevent businesspeople from pounding the halls of area hotels this fall, though following the Labor Day holiday several venues were active as trade groups such as the Business Council of Fairfield County and the Stamford Chamber of Commerce sponsored gatherings to address the recently passed state budget and the state economy.

That economy could falter more if the area”™s hotels, restaurants and caterers see cancellations mount along with diagnoses of swine flu. Hotel occupancy was down 12 percent nationally the last full week of August compared with a year earlier, according to Smith”™s Travel Research, while revenue per available room was off a full 22 percent.

 

The H1N1 outbreak last spring had a negative $10 million impact on second-quarter earnings at Starwood Hotels & Resorts Worldwide Inc., the White Plains, N.Y.-based owner of the Westin and Sheraton brands. Starwood Hotels & Resorts indicated the impact of swine flu was particularly pronounced in key destination markets such as  Hawaii and Orlando, Fla.

 

Marriott International Inc., which has several hotels in Fairfield County, said that occupancy in its Mexico hotels dipped below 20 percent at the height of the swine flu scare last spring.

During the spring outbreak, travel to Mexico was the lone business activity that appeared to be significantly affected, with 60 percent of companies polled by the National Business Travel Association canceling all but essential travel to Mexico.

What”™s more, nearly a third of companies cautioned employees against traveling to other areas with a high incidence of the disease. And a third of companies said the pandemic had cost their company at least $10,000 in business, through the form of canceled meetings, rebooked trips, lost sales or other costs.

 

The American Hotel & Lodging Association published a 25-page guide to help its member inns deal with the threat of a swine-flu outbreak. While the manual mostly concerns itself with handling any occurrence of swine flu in employees or guests, it also provides advice on how to handle events that are affected by any swine flu closure of a facility, including cancellation clauses in contracts, and being prepared to shift an event to an alternate site nearby, ideally under the same hotel “flag.”

 

Left unsaid in the manual, however, is how to minimize the loss of business due to businesses delaying or canceling plans for meetings. AH&LA is advising hotels to suspend penalties for cancellations by companies hosting meetings or guests attending them.

In an extreme scenario, the possibility even exists that government agencies could commandeer hotels for use as quarantine sites, according to AH&LA.

Of course, those businesspeople pressing ahead with travel plans will reap at least one benefit ”“ according to Norwalk-based Priceline.com Inc., the fall is shaping up as a banner season for last-minute travel deals.