13 JUN 2012: Leading US hoteliers had a blunt message for all government - local to federal. When it comes to international travel policies and airport operations, it needs to get fixed – the sooner the better.
At a New York University International Hospitality Industry conference the executives acknowledged that many people are resuming pre-recession travel patterns, but noted that some potential travellers are discouraged by a combination of aging US airport infrastructure and stringent Department of Homeland Security policies that prevent wealthy travellers from countries like China and Russia from getting travel visas to the US in a timely manner.
In his keynote speech, Loews Hotels chairman Jonathan Tisch, cited two recent Frommer’s lists of the world’s “most beautiful” and “worst” airports which included four US airports among the “worst” and only New York Kennedy’s Terminal 5, operated by JetBlue, among the most beautiful.
Missing the revolution
Tisch argued that more airport operations need to be privatized.
“We’re on the verge of potentially the greatest boom market in our industry’s history,” Tisch said.
“But there’s a giant elephant in the room. Travelling today can be an enormous hassle. We’re deluding ourselves if we don’t understand and fix that problem.”
Vasant Prabhu, CFO of Starwood Hotels & Resorts, said post 9/11 US visa policies have caused the US to lose international tourist market share as it fails to take advantage of rapidly growing middle class travellers in developing nations.
“There’s a revolution in travel going on outside the US, and we’re missing out on it completely,” said Prabhu.
“If you’re in China or the Middle East, it’s extremely hard to come to the US.”
The comments were unusual because the hoteliers focused on an area outside their sector – looking at aviation being a deterrent to further recovery.
Revenue is up
In fact, hotel revenue is up. A recent report by Smith Travel Research (STR) said US hotel revenue increased 7.5%, to $137.5 billion, last year, marking the industry’s fastest sales-growth rate in a decade.
Whether such improvements are occurring as a result of or despite airport and visa initiatives is debatable.
In 2011, the US hosted 62.3 million international travellers, who spent $153 billion, according to the US Department of Commerce.
Compared with 2003, which had the lowest level of inbound travel since 9/11, visits are up about 45%, and spending has doubled.
Privately operated airports?
The idea for privatizing airport operations was originally introduced as an option in 1996 when the FAA was authorized to start a pilot programme with a small group of selected US airports, which included Chicago’s Midway - none of the airports has yet reached an official agreement with a potential private operator.
“We cannot look to Washington to help us solve this problem,” Tisch said. “The Washington legislative process is as gridlocked as our airports.”
Many believe that privately operated airports are unrealistic. The liability issues concerning air-traffic control would be too great, and it is thought that the American public would be unwilling to support privately operated airport security while as terrorism still remains a threat.