Revival of travel?

Gas prices and high air fares did not immediately stifle business or even leisure travel last year but a steady decline in the latter and finally a spate of discounts in the air just might get people on the road as these reports point out. A fair presumption is that there will be some relief for a beleaguered hotel industry with many parts of the country reporting near dire slippages in Revpars.

Britain's Daily Telegraph paper reports that falling demand is putting pressure on airlines to reduce their fares and, thereby creating some bargains for holidaymakers. There are unprecedented falls in air fares as carriers
try to combat a declining demand for air travel with fares to many destinations – particularly long-haul – cheaper than ever. The paper reports that "return fares to New York this week fell to as low as £225 (inclusive of
charges and taxes). At today's exchange rates that amounts to approximately $320.00, a remarkable bargain if one were to compare that to an Amtrak one ticket from Boston to DC which amounts to $168.00.

On a similar vein, closer to terra-firma, Reuters has a report headlined "Americans hit the road again as gas prices fall". The report rightly notes that "U.S. consumers pinched by the economic crisis, falling gasoline prices
have created what some analysts call a sort of stimulus package that
has pumped billions of dollars in disposable income back into their
wallets.

Events like the foregoing usually bring about a revival in consumption. This time though economists and Wall Street seem unsure with the former noting a shift from consumption to thrift. Wall Street in the meanwhile seems in a terminal malaise with a relentless dive to a never-ending bottom. Till there is a true reversal there are going to be more stories in the hotel industry of the negative variety than those that hint at optimism for the future

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

Leave a Reply

Your email address will not be published. Required fields are marked *