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The State of the U.S. Tourism Industry
Subcommittee on Commerce, Trade, and Consumer Protection
Mr. J.W. Marriot Jr.
Mr. Chairman and members of the subcommittee, I'm Bill Marriott. Thank you for the invitation to testify this morning. These past four weeks have been the most difficult weeks for the travel and tourism industry that i have experienced in the 45 years i have been in the hotel business. On September 11 we had our World Trade Center hotel completely destroyed and our Financial Center Hotel, one-and-a-half blocks away, severely damaged. Hopefully, we will be able to reopen it in four or five months. Tragically, two of our managers were killed at WTC as they stayed behind trying to make sure that our guests had been evacuated. Between the two hotels we successfully evacuated over 2000 people. When the weapon of choice for a terrorist attack is four airliners filled with fuel and passengers, it is bound to have a devastating effect on all of us. Immediately following the attack, our net reservations dropped 94%. Our room revenues were already down about 10% prior to September 11. Business has come back. But only part way. In the last three weeks in September we were off about 40% in revenue. In the first week of October we are 25% below last year in combined occupancy and room rate - or what we call REVPAR. Our big city and resort convention hotels have been hit the hardest with massive group cancellations. Business and vacation travel are far below what they should be. September and October are the best months for business and convention travel. Our industry has lost all of the profit that these months usually provide. The hotel industry employs over two million people in the U.S. Today, one half of these employees either have been laid off - or are working one or two days per week. While some conventions have rebooked for next year, the airlines are running an 80% schedule and planes are half full. The big travel agencies report future bookings are very soft and now we are coming into the slow season. December is the worst hotel month and January is the second worst. The lodging industry is very capital intensive, carrying $150 billion of mortgage debt. Many hotels will not make their debt service payments. We are not asking for a bailout - just your leadership in recognizing a major problem and its tremendous impact on our economic stability and jobs. Your immediate action is needed to help us resolve this situation before it completely erodes not only the U.S. economy, but also the global one. We in the travel and tourism industry are doing everything within our power to act responsibly in doing our part - both labor and management. We are embarking on a massive Advertising campaign to "get America traveling again". We have lowered our rates and are offering the most attractive travel packages ever. We have waived the minimum hours required for our benefits eligible employees so that they can keep their health coverage for themselves and their families during this emergency period. And we have frozen or reduced executive salaries. We are looking at every conceivable possibility to build back our business in this difficult time. We ask our government to do the same - join us, labor and management, as partners in solving our travel and tourism crisis. We need your leadership as never before. In bipartisan meetings with members of congress, we have been challenged to make recommendations of those measures which would provide an immediate stimulus to our economy for a temporary period. The one best proposal I think congress should consider, because it will provide an immediate shot in the arm for travel and do more to save jobs now is a travel tax credit. The congress should enact, as part of any economic stimulus plan, a temporary - and i stress temporary - business travel tax credit, targeted and limited in time and cost. The "Travel America Now Act Of 2001" has been introduced in both the House and Senate. The House legislation is H.R. 3041 introduced by Representatives Shadegg of Arizona, Abercrombie of Hawaii, and Wilson of New Mexico. We support their proposal. Let me quote from a recent issue of Newsweek: "Business Trips Are Among The Terrorists' Victims". The article goes on to state that in this post-attack period 58% of American business corporations have plans to curtail travel. I know that many members of Congress do not like tax credits - but they can be effective when used prudently and cautiously. A great example is the work opportunity tax credit, in which our government and business have worked in partnership to get many of our citizens off the welfare rolls and onto payrolls where they want to be and deserve to be. All of you know how this small investment has saved money, helping both employee and employer. Our company alone has been able to train and put 3,000 former welfare recipients on our payroll through our"Pathways To Independence" program. Now is the time for the Congress and the Administration to be creative by using the tax credit process to get us traveling again. There is nothing that will get businesses "back to normal" faster - and more effectively - than a travel tax credit. We must do something immediately to get people traveling again - or the consequences for our economy could be disastrous. Let me also stress that labor and management are united in this effort. Just as labor supports our efforts to stimulate the economy through a travel tax credit, we strongly support their efforts to assist our workers who have been laid off as a result of the events of September 11. Travel and tourism is the first, second, or third most important industry in 28 states and the District of Columbia. It employs 18 million Americans, and pays over $100 billion per year in federal, state and local taxes. Last year it generated a $17 billion trade surplus. I hope you will help us get America moving again. Thank you, and i request that my entire testimony be included in the record.
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