Miami Touirism Hiring Rebounds -- Still Soft in Las Vegas

Miami Herald: The recession hit South Florida hard, but Las Vegas got clobbered.

By many measures, Sin City’s economy sunk deeper than Miami’s did. Among all of the major metropolitan areas in the country, Vegas has the highest unemployment rate: 13.6 percent. Property values sunk 58 percent from their peak in the housing crash, compared to the 49 percent drop in South Florida. Vegas also leads the nation in foreclosures.

So perhaps it’s not surprising that Miami’s tourism industry bounced back much faster from the recession than did the tourism industry in Vegas.

Vegas relies much more heavily on conventions than South Florida does, and the meetings industry got hammered in the recession as corporations scaled back on anything that looked lavish. Spending on gambling also took a dive during the recession.

These Vegas-Miami comparisons, of course, are taking on new importance as Florida considers allowing a law that would bring mega casinos to South Florida.

While Vegas is essentially a one-industry town, South Florida thrives on economic activity from tourism and construction — two Vegas staples — it also can count on international finance, trade, and a sizeable professional services industry to provide jobs and spending power.

Gambling opponents point the region’s tourism statistics as proof South Florida doesn’t need gambling, since the hospitality industry appears to be strong without it. But gambling supporters also point to the region’s economic diversity as an argument for bringing in casinos, since they would serve as an extra outlet for hiring and development — not the only one.

U.S. Tourism's Lost Decade

US News: The travel industry today became the latest to slam federal rules and bureaucracy, charging that tough visa rules for potential tourists have robbed the nation of $600 billion and hundreds of thousands of jobs.

Two grim facts: More Chinese now visit France than the United States, in part because it's hard to get a U.S. visitors visa. And while the U.S. used to be the destination for 17 percent of the world's tourists in 2000, that's dropped to 12.4 percent and shows no sign of changing.

"Even as world travel grew by more than 60 million travelers between 2000 and 2010, the U.S. share of the market remained essentially flat. During this 'lost decade,' our economy squandered an opportunity to gain $606 billion in total spending from 78 million additional visitors—enough to support 467,000 more jobs annually," said a new report out this afternoon from the U.S. Travel Association.

"We know that we are not getting our share," said USTA spokesman Robert Bobo.

The key issue: The U.S. is slow to issue visas, especially since 9/11, and visitors from distant nations are going elsewhere. Among the key problems are the post-9/11 requirement that visa applicants be interviewed before traveling and a lack of visa offices. In China, for example, 20 cities with 20 million or more citizens have no U.S. visa office.

To reverse the slide, travel officials today unveiled a broad plan to speed the issuance of visas, potentially leading to the creation of 1.3 million new jobs and additional economic output of over $850 billion.

The key suggestions on the plan dubbed "Ready for Takeoff" include:

— A presidential directive to boost tourism from countries like China, Brazil, and India.

— Have the State Department do more to promote travel to the United States.

— Hire 440 new consular offices and put them in China, Brazil, and India over the next five years.

— Allow existing visa holders, including many business travelers and student and exchange visitors, to renew visas in the United States instead of returning to their home countries to do so.

— Utilize demand management tools and techniques to analyze and predict periods of high user demand and lower wait times.

The industry, however, gives credit to the Obama administration for realizing the problems and working to boost foreign travel to the United States. Just this week, for example, the agency charged with pushing travel to the United States, the Corporation for Travel Promotion, renamed itself "Brand USA" and plans to launch an advertising and marketing campaign in the spring of 2012 to push the U.S. as a business and vacation hot spot.

Business Travel Expected to Slow in 2012

Fox Business: Amidst a gloomy economic outlook, business travel is expected to slow down for 2012.

Corporate travel budgets are increasing, but mostly to cover the rising costs of airfare and hotels in a tough negotiating climate as airlines and hotels restrict volume discounts and other perks.

Despite these challenges, businesses recognize that the benefits of in-person meetings far outweigh the cost savings of scrapping travel programs - and some bright spots remain for road warriors in 2012:

Corporate travel departments will get more organized. With tight budgets under more scrutiny, look for corporate travel managers to streamline policies and procedures, making it easier for travelers to use the proper channels, from booking to reimbursement.

More flight options. Even with U.S. airlines’ planned capacity cuts, you’re more likely to get a seat on the domestic flight you want if fewer people are traveling - especially helpful for business travelers who often need to take an earlier or later flight home if their meeting schedule changes on the day of travel.

International travel still comfortable. According to the Global Business Travel Association (GBTA), U.S. companies are still spending on foreign travel to growing markets such as Asia - and they’re still allowing premium class upgrades and amenities on these trips since happy employees are more effective. Expect about 3% more trips overseas next year, with international travel topping $34 billion.

While corporations will likely restrict the number of business trips next year, employees will be traveling smarter - and each trip will be that much more important to the company’s strategic growth.

Hotel Occupancy Predicted to Increase 5% Over Next Year

USA Today: Travelers in the coming year should prepare to pay higher rates and compete for the best rooms, a new analysis of future hotel bookings suggests.

Occupancy nationwide is expected to increase by about 5% and rates by about 4%, according to industry tracker TravelClick's analysis of North American hotel bookings for the 12 months ending Sept. 30, 2012.

"While there is much uncertainty regarding where the overall economy is headed, hotel industry performance over the remainder of 2011 and heading into 2012 continues to look strong," said Tim Hart, a TravelClick executive vice president.

The gains should please hotel owners, who endured steep drops in occupancy and room rates in the recession. Revenue per available room, the industry's key financial measure, is expected to increase by almost 7%, the analysis says.

The recovery will not be across-the-board. Five markets in the next 12 months are expected to see hotel occupancy sink, with Minneapolis-St. Paul (-9%) and Denver (-8%) predicted to fare the worst.

On the other end of the spectrum, a handful are projected to see occupancy gains of 15% or more.

Charlotte is expected to experience a 20% increase in occupancy, followed by 15% gains in Houston, Seattle and Philadelphia, which will mean renewed competition for rooms and perhaps a wait in the check-in line.

It's Detroit, however, that TravelClick predicts will emerge the biggest winner during this period, with an expected 22% increase in occupancy.

"We're well ahead of the curve from a national improvement standpoint," says Thomas Conran, principal of Greenwood Hospitality Group, owner of The Henry hotel in Dearborn, Mich., a Detroit suburb.

Reflecting Detroit's economy, the Henry had previously been a luxury Ritz-Carlton hotel where the auto industry frequently met and had functions, but Conran's group repositioned it last year. Out were the dark-wood-covered walls that gave the hotel its clubby atmosphere. In were a lighter color palette, a vibrant restaurant, reduced room rates and marketing by Marriott's "anti-chain" Autograph Collection. On busy mid-week nights, a guest might today pay about $200 a night — less than during the auto industry's heyday.

But what the Henry lost in rate, it's starting to make up with volume. "There's an energy that this hotel has not seen for many, many years," says Conran.

Conran credits Detroit's recent recovery to the state's efforts to lure more leisure travelers via its Michigan.org website, as well as the success of Detroit's resurgent sports teams, which has helped lure weekend visitors.

Finally, Conran says, the Detroit area is seeing "significant" year-over-year gains in business travel thanks to the recovering auto industry.

"We can't underestimate the fact that the health of the auto industry has improved dramatically," Conran says.

Travel Forecast for 2012

Fox Business: Financial turmoil that has already started to weigh on corporate balance sheets may start to seep into the wallets of business travelers, according to an industry survey set to be released later on Wednesday by American Express.

Travel costs for businesses will continue to increase in 2012 as airlines and hotels squeezed by rising expenses push their fees higher, according to the credit card company’s Global Business Travel Forecast.

Calling business travel essential to global economic performance and an “enabler of business growth,” Christa Degnan Manning, director of Expert Insights research at American Express Global Business Travel, predicts the combination of demand and the pricing pressure on travel suppliers will push rates up in 2012.

“As more and more companies understand the importance of putting people on the road and its criticality to converting prospects, retaining clients, and ultimately driving growth, particularly in emerging nations, we expect to see travel prices go up,” Manning said.

Airfare has already been rising as airlines increase fares to offset sharply higher jet fuel costs and ailing demand. As major U.S. carriers such as AMR’s American Airlines and Delta Air Lines reduce capacity heading into next year, reduced supply will likely lift fares higher, even in the face of a potential economic slowdown, according to the AMEX forecast.

North America short-haul economy fares could be up 3% to 5%, with North America long-haul prices for economy passenger climbing 0.5% to 3.5%, AMEX said. For business class, short-haul prices are slated to rise 5% to 7%, while long-haul could be up 3% to 5%.

Hotel prices are also slated to increase, albeit slightly, the survey notes, building on gains that began this year as those suppliers aimed to reach pre-recession room-rate levels.

“Hoteliers increasingly seek to remove these from contracted rates to drive their own revenue-generated opportunities next year,” Manning said.

AMEX warned that price increases will vary depending on location and suggested companies looking to keep costs in check calculate the value of services offered by hotels that help improve employee productivity, such as Internet connectivity and business center usage.

In Europe, the Middle East and Africa, hotel rates are expected to increase conservatively, however there will likely be declines in Spain and Greece that are facing particularly tough financial turmoil.

In Latin America, airfare is expected to increase by as much as 6% to 9% for business short-haul fliers and 5% to 8% for long-haul fliers. The hotel market down there is also projected to have moderate increases, particularly in the business hubs of Buenos Aires, Mexico City, Santiago and Rio De Janerio.

As companies continue to look toward Asia’s emerging markets for new business, the region is once again expected to lead business travel demand. Pricing for business-class short-haul fliers is slated to rise 2% to 6%, while those for long-haul passengers could be up as much as 6% to 10%.

In Asia, the uptick in business travel will inevitably weigh on hotel prices, AMEX said, however prices will likely fall in certain cities such as Shanghai, which has an excess of capacity after building more than enough hotels after its Expo 2010.

Why Companies Keep Traveling

Even with the higher price, though, companies are expected to continue traveling.

“There’s a link between travel and a company’s top-line growth,” said Alicia Tillman, vice president of global communications marketing services for American Express’ global business travel.

In an earlier AMEX survey, the company found that companies that utilize business travel estimate that they won over roughly 50% of their perspective customers through face-to-face contact, compared with just 31% without in person meetings.

“Despite emerging technologies that can serve as alternatives to travel, nothing really replaces what you gain with those in person interactions,” Tillman said, noting that travel is seen as a competitive advantage and helps build client relationships.

At the height of the nation’s latest economic recession, many companies started to slash travel budgets, which are typically one of the top two or three expenses after human capital and technology. However, AMEX noted that those companies that held onto the person-to-person client relationships realized stronger and more profitable growth than those that cut the budget out completely.

Of course, there are alternatives to travel such as telepresence and virtual meetings. And while AMEX says companies should avoid those less personal meetings with clients, it encourages cost-efficient technology-enabled meetings for inter-office affairs.

One of the best ways to tackle immense travel costs is to “managing spending more strategically,” Tillman said.

She suggested companies invest in sophisticated reporting tools so that they can keep tabs on employees spending habits while traveling on the job to ensure the money being spent is not on non-critical things outside of policy.

Survey Says Christmas Travel Spending to Increase

Los Angeles Times: Despite continued high unemployment rates and a volatile stock market, American who plan to travel for the holidays expect to spend up to 43% more this year, according to a new survey.

The online survey released Monday by the American Express credit card company found that the percentage of Americans planning to travel for the holidays will stay about the same as last year.

But the survey also found that those Americans who plan to travel expect to spend about $659 on holiday travel this year, an increase of $200, or 43%, over last year.

Most of the additional spending, according to the survey, will go toward dining out and entertainment.

Although most Americans plan to drive to their holiday destinations, the percentage of travelers who will fly is expected to increase 10% to 36%.

"No matter where consumers choose to go, there is a clear interest in getting more out of travel," said Claire Bennett, senior vice president and general manager of American Express Travel.

Still, Americans continued to look for bargains. When asked what their first consideration was in planning holiday travel, 40% of those surveyed said budget while 25% said destination.

The survey, conducted by Echo Research for American Express, was completed online by 2,017 adults between Sept. 28 and Oct. 2.

Hotels Have Less to Cut if Economy Falters

USA Today: If the economy worsens and people start curbing travel again, will hotels cut their payrolls to the extent they did in 2009?

The short answer: No. There are fewer managers, housekeepers and clerks to cut today than during the depths of the recession, according to the CEO of the nation's largest real estate investment trust.

A Wall Street analyst posed the question yesterday to Ed Walter, CEO of Host Hotels, during Host's fairly optimistic third-quarter earnings call. Since Host owns 120 hotels with well-known names such as Marriott, Four Seasons, Hilton, Sheraton, Fairmont, Westin and Hyatt, I thought you might like to hear his reply.

Hotel staffing levels, after all, can have a direct impact on the quality of your stay.

So what did Walter say?

First of all, remember that over the last two years, we saw hotels cut operating hours for a variety of services to shrink labor costs - a hotel's biggest expense. Some properties cut hours at the VIP lounge since there were fewer VIPs around, while others reduced room-service hours.

In response to the analyst's question, Walter yesterday said that he could see cutting staff at Host hotels if - and that's a big if, given the company's relative optimism - corporate and consumer optimism faded and travel demand sank.

"If you start to see a meaningful falloff in occupancy, then you're going to see that you're going to go back and cut the hours that food and beverage outlets are open. You're going to end up with fewer housekeepers and you're going to end up with fewer managers than we have right now."

The cuts, however, couldn't be as deep as they were in 2008 and 2009, he said on the call. That's because Host has been "working hard with each of our operators" to ensure that staffing levels didn't balloon as times improved.

"Where we we thought cut fat last time, we haven't wanted that to return," he said.

Asked whether Host had added back employees in its hotels since the industry's darkest days in 2009, Walter said yes, but only in proportion to the occupancy growth seen at its hotels. On an estimated full-year basis, occupancy levels at its hotels will be 72% this year, up from about 66%, he said.

Starbucks Asks for Donations to Help Economy

CBS Seattle: Starbucks hopes customers will be willing to pay at least $5 more when they stop in for their morning cup of Joe.

Starting Nov. 1, Starbucks will begin collecting donations of $5 or more from customers to stimulate U.S. job growth through its “Jobs for USA” program. The Seattle-based coffee chain is collaborating with the Opportunity Finance Network, a nonprofit that works with nearly 200 community development financial institutions to provide loans to small businesses and community groups. Starbucks says 100 percent of the donations will go toward loans for firms and organizations that can add jobs or stem job losses.

Starbucks, which pioneered how Americans drink coffee, declined to estimate how much money it plans to raise, but millions of people visit its nearly 7,000 company-owned U.S. stores each day. Customers who give will get a red, white and blue wristband that says “Indivisible.”

“This is about using Starbuck’s scale for good,” said Howard Schultz, Starbucks Corp.’s CEO.

The program is the latest effort by Schultz to address the nation’s economic woes. In August, he sent more than 200,000 Starbucks employees a memo urging them to do what they can to help business thrive. Then, he asked fellow CEOs to stop contributing to political campaigns until the nation’s leaders reached a long-term economic solution. After that, he hosted a national telephone forum, bought full-page ads in two major newspapers and started a website, Upwardspiral2011.org.

Schultz said he feels personal responsibility to do something to stimulate the U.S. economy. Starbucks is hiring about 200 people a day in the U.S. as part of its efforts to remodel thousands of stores and add about 200 more locations in the next year. But Schultz said he wanted to do more.

Starbucks is covering the operational costs to get loans out through the program, which will run indefinitely. Its charitable arm, The Starbucks Foundation, is giving $5 million to get the program started, with the hope that funds will be invested in communities within a month of a donation being made.

Opportunity Finance Network works with 180 financial institutions — banks, credit, unions, loan funds and venture capital funds — that give loans in low-income communities that don’t have easy access to credit. The organization, created 27 years ago, has invested $23.2 billion and generated nearly 300,000 jobs through 2009.

Loans through the network have supported everything from charter schools to grocery stores nationwide. The organization found that, even during the recession, more than 98 percent of the money loaned out has been repaid, which is in line with traditional lenders.

Through the program, businesses will apply to financial institutions, which along with the Opportunity Finance Network will assess their potential for adding jobs. Preference will be given to applicants who can add jobs within six months. An outside organization will audit the program within a year.

“We want to match up every person who has $5 to share with every person who can’t spare $5,” said Mark Pinsky, CEO of Opportunity Finance Network.

The effort has the potential to be successful, say some experts. Community institutions succeed, they say, because they understand the needs in the areas they serve.

“I think it’s a really worthy effort,” said Mark Zandi, chief economist at Moody’s Analytics. “In theory, this is a great idea and should have impact.”

Hotel Industry Outlook Beginning to Brighten

USA Today: The doom-and-gloom attitude that's plagued the hotel industry for about three years is starting to lift.

During the annual Phoenix Lodging Conference last week, hotel developers, executives, designers and financiers huddled in discussions over possible deals — something not seen since the financial crisis.

"There was more positive activity at this year's event than last year's," says Nancy Johnson, an executive vice president at Carlson Hotels, which runs Radisson, Radisson Blu and Country Inns & Suites brands.

A prime reason why hotel development sank was financing dried up after Lehman Bros. crashed in September 2008, sending the globe into a financial crisis and keeping travelers at home.

"The pall of the recession has psychologically passed, if not financially passed," says Hotel Interactive's Glenn Haussman. "Everyone realizes it's time for things to happen."

But the financial pall may be lifting, too.

A senior executive with GE Capital's hotel financing arm told the audience that the giant is hiring sales people, and he invited them to call for loans.

"If you haven't heard from GE in a while, you're going to," said Scott Andrews, senior vice president of GE Capital's franchise finance. "We are fully back in the market."

Other signals of optimism:

•Budget hotel company Choice Hotels International just announced deals to build three locations of Cambria Suites — Choice's most upscale brand — in Washington, D.C., Houston and White Plains, N.Y.

Those are urban markets where it's easier to get new hotels financed, Choice Hotels CEO Steve Joyce says. "We are out providing significant seed capital to get deals over the finish line because we're sensing now is the right time," he says.

Choice also has started helping owners of its budget Sleep Inn hotels finance renovations.

•The Country Inns & Suites chain, specifically, signed twice as many hotel deals this year as last year, Johnson says. That exceeded expectations, although it's still not back to pre-recession levels. Most of the deals are conversions because financing has been lacking. But one deal will mean a new Country Inn in Port Orange, Fla., near Daytona.

•Major West Coast hotel developer R.D. Olson plans to open four new limited-service hotels in the next nine months. It's also working on a full-service hotel in San Diego, CEO Bob Olson says. With construction costs down as much as 30% from four years ago, he says, "It's an incredibly opportune time to build in certain markets."

The company invested in the four hotels that are slated to open, he says.

Some of the optimism stems from improving forecasts from hotel prognosticators. Revenue that hotels get per available room at the end of this year is expected to be 7.2% higher ($60.54) and rise an additional 7.3% in 2012, according to PKF Hospitality Research.

The average daily room rate this year in U.S. hotels is expected to reach $101 by year's end, a 3% gain. An additional 5% gain is expected next year, PKF says.

Still, any rebound in the hotel industry depends on the market.

For instance, at the Arizona Biltmore, the Waldorf Astoria-affiliated hotel where the conference was, average daily rates remain as much as $85 below pre-recession levels, says Andrew Stegen, the hotel's general manager.

Prices for Luxury Hotel Spa Treatments Down

USA Today: Like to indulge yourself at a luxury hotel spa every now and then? Well, here's some good - and bad - news for your wallet.

First, the good: The average price of a treatment in a luxury hotel spa in the USA this year is $134, or 7% less than the peak ($144) in 2008, according to a new spa report by Smith Travel Research.

"The average dollar per treatment has deteriorated with the recession and has not quite come back up yet," Smith Travel's Jan Freitag tells me.

The bad: Prices - for now - have stopped sliding as much as they did during the recession.

Those are among the main findings from Smith Travel Research's spa report.

The industry tracker's been expanding its research on the subject as luxury hotels try harder to squeeze profits from their spa operations. STR's latest report are based on findings from 55 luxury hotels in the USA, or about 20% of all the total. The figures reflect January through July business.

Treatment rooms mostly empty; sales ahead?
Even though luxury hotel spa prices appeared to have stopped sliding, the report shows that the rate at which spa treatment rooms are used has dipped. This year so far, spa treatment rooms have been used as little as 23% of the hours that they're open every month.

The only other time the rate fell below 25% in recent years was in September and October 2008, when two things happened: Lehman Brothers crashed, prompting a meltdown of financial markets and a reduction in travel, and the disclosure that AIG executives wined, dined and pampered their well-paid employees shortly after the insurance giant accepted a multi-billion-dollar federal bailout.

This year's decreased use of spa treatment rooms could mean two things, Freitag notes:

- Fewer treatments: In some cases, it means spas are selling fewer massages, body scrubs, facials and other treatments.

- Longer hours: It other cases, spas may be doing the same amount of treatments but they're staying open longer than in the past.

"In this environment, they may have more open hours because they have to accommodate guests' needs even more," Freitag tells me. "So instead of noon to 8, they may stay open 10 to 8."

Some spas selling specials on TravelZoo
It's a figure that might make more spa managers seek new ways to fill their rooms - a trend that's already underway.

TravelZoo, for example, has a growing number of luxury hotel spa deals, says Mike Stitt, who created TravelZoo's Local Deals discount program.

A current example: For $99, the InterContinental Los Angeles Century City hotel will let you book a 60-minute massage and 30-minute body scrub normally valued at $245. As of this morning, 473 of the packages were purchased. The deal includes pool access, fitness center access and even a glass of sparkling wine.

Spa industry expert's take on the situation
Spa industry expert David Stoup tells me he's not surprised by the report's main findings.

"The spa industry is overdeveloped, saturated and lacks differentiation," says Stoup, chairman of Trilogy Spa Ventures, which works on hotel spas. "The consumer demand for differentiated service at spas has yet to be answered and when it is, rates will rise."

In the future, he expects hotels will bring in spas that feature brands that consumers "know and trust" - and, thus, are more willing to try and pay premium prices. It's the strategy that Trilogy is, in fact, selling to hotels such as the Waldorf Astoria in New York, where Trilogy created the Guerlain spa.

(Stoup, by the way, is the reason why you've heard of Elizabeth Arden's Red Door day spas. In early 1990s, he bought the rights to the brand from Unilever and grew the two locations into a chain of 146 in 26 markets, and then he sold off the company.)

In this post-recession era, Stoup says the days of building the biggest and most opulent spas are over.

Hotels across the price spectrum also need to do a better job of figuring out a realistic number of treatment rooms that they'll need so they avoid wasting valuable real estate. Trilogy's now working with the Marriott San Diego to design "a very efficient 5,500-square-foot spa" with room to grow as business grows, he says.

"This is a departure from the old method of building the biggest and most opulent spas," he says. "I see this careful planning process as a trend going forward."

Hotels Sprucing Up After Years of Neglect

USA Today: Hotels are spending more to spruce up rooms, lobbies and workout facilities after three years of holding the line.

Spending by U.S. hotels on improvements will increase 30% to $3.5 billion this year, New York University's Tisch Center for Hospitality, Tourism, and Sports Management newly estimates.

It's the first increase since 2008 and is driven by a recovery in customer demand and a push from national chains, the research says.

Hotels spent aggressively in the years leading up to the 2008 recession. They installed amenities that have since become standard at even midprice chains: thicker beds , Wi-Fi Internet access, flat-screen TVs and redesigned lobbies. The estimated $5.5 billion spent on improvements in 2008 was an industry record, says Bjorn Hanson, NYU professor and author of the study.

But capital investment swooned quickly when the recession kept travelers at home. Capital spending on improvements fell 40% in 2009 and an additional 18% last year, Hanson says.

Many hotels are ripe for investment, Hanson says. "They are getting to the point where travelers are starting to notice," he says. "Carpeting, wall covering, upholstery — they're starting to show their wear. So now is a good time."

Greg Mount, president of Richfield Hospitality, says spending on improvements has increased at about half of the 30 hotels he operates. "You're seeing those dollars that should have been put in the last three or four years," he says. "There's a lot of deferred maintenance."

Investment also is coming in from new owners who have bought foreclosed hotels that need renovation.

Richfield Hospitality, for instance, bought a 565-room Sheraton in Bloomington, Ind., earlier this year and is spending about $30,000 per room on upgrades. "(The previous owner) didn't have the cash to complete product improvement," Mount says.

National hotel chains have been tolerant with local owners of their brand-name properties but are starting to demand upgrades, some owners say.

Kirby Payne, president of HVS Hotel Management, which owns a group of hotels, says he's been able to defer some upgrades on some of his properties for two years. Now, he says, he's installing flat-screen TV sets in five properties, including a Holiday Inn Express, Hampton Inn and Country Inn & Suites.

Despite the new spending, Hanson says, many hotels will remain cautious, as profit margins remain at 18-year lows on a per-room basis and occupancy is expected to remain at or below 60%.

Myrtle Beach Summer Tourism Good, Not Great

Myrtle Beach

The Sun News: As the last summer vacationers visit the Grand Strand this Labor Day weekend, area business owners say they are satisfied with the season, but most aren’t celebrating.

Revenue growth this summer was minimal, many said, held back by the still-lagging economy that prompted visitors to stay fewer days and spend less money while here. But at least revenues didn’t drop, they say.

“We had a good summer, not necessarily a great summer,” said Peter MacIntyre, general manager of Ripley’s Aquarium in Myrtle Beach. “Certainly I think that the economy showed in the spending habits of our customers. People were here in town, but they didn’t have as much to spend on the entertainment side and made choices accordingly.”

Several new high-profile attractions – including the SkyWheel and Pirates Voyage theater show – helped lure crowds and generate publicity for Myrtle Beach, but it wasn’t enough for a home-run summer for the destination, officials said.

Sagging consumer confidence and stubbornly high jobless rates continue to weigh on travelers’ psyches – and their pocketbooks. Most area businesses are thankful for the slight gains they managed to pull off this summer. But like so many others, they wonder when the economic mess will be cleaned up.

National reports out Friday hinted that it won’t be soon, though tourism promoters say they are optimistic about extending summer’s subdued success into the fall. “Things could always be better, but all in all, we are doing remarkably well,” said Gary Loftus, an Horry County councilman and director of Coastal Carolina University’s Center for Economic and Community Development.

All the statistics for the summer haven’t yet been tallied – usually there’s a two- to three-month lag in calculating accommodations, admissions and sales taxes, which are key gauges of tourism, an industry that drives the Grand Strand’s economy. The Grand Strand had a couple of things on its side this summer: new attractions – the SkyWheel, Pirates Voyage, a relocated Legends in Concert, WonderWorks – and a reputation as an affordable destination, which appeals to the bevy of budget-conscious and recession-weary vacationers, experts said.

“We’ve enjoyed a solid summer season,” said Brad Dean, president of the Myrtle Beach Area Chamber of Commerce. “The summer season started a little slower than some of us hoped, but once the tourists started arriving in late June, the summer appeared to build stronger and stronger week by week.”

Attractions reported good crowds, and traffic at the Myrtle Beach International Airport was up, including a nearly 24 percent jump in the number of incoming passengers in June and a 6 percent increase in July thanks to additional flights and bigger planes that could carry more travelers; August traffic numbers haven’t yet been released.

Broadway at the Beach saw a surge of visitors thanks to new additions such as WonderWorks and Legends, said Patrick Walsh, senior vice president of asset management for Burroughs & Chapin Co. Inc., which owns Broadway. “This has clearly helped attract more visitors to the complex,” he said. “We have a strong repeat business and have seen a lot of new faces at the complex. This has been a tremendous summer for Broadway at the Beach.”

Overall, lodging properties weren’t as full as they were last year, but vacationers paid more for their rooms than they did a year ago – the first room-rate increases after two summers of declines, experts said.

The Grand Strand’s lodging occupancy for the summer was down 3.8 percent from last summer, falling to 79 percent, according to CCU’s Clay Brittain Jr. Center for Resort Tourism. Room rates were up 6.4 percent from last year, with RevPar – revenue per available room, a key gauge of the industry – ticking up 2.3 percent, according to CCU.

Though the price increases offset the occupancy declines this summer, that’s not a combination that can be sustained in the long run, said Taylor Damonte of the Center for Resort Tourism. “We need to continue to drive volume,” he said. “At some point, those price increases will not be sustainable.”

The 100-room Court Capri in Myrtle Beach wasn’t one of the properties that raised rates, general manager Jason Anderson said. Travelers, who have gotten used to deep discounts since the recession, still were searching for deals, he said, adding that the hotel frequently offered the fourth night free with a paid three-night stay. Still, this summer was better than last summer, Anderson said. “We did have to discount more this summer,” he said. “There are still a lot of people not back to work.”

Unemployment continues to stifle any economic recovery nationally or along the Grand Strand. On Friday, the government released the weakest jobs report since September 2010, reporting that employers stopped adding jobs in August – an unexpected setback – and that the national jobless rate stayed at 9.1 percent. The news sent the stock markets down more than 250 points Friday and increased fears that the United States might slip back into a recession. Along the Grand Strand, jobless rates continue to hang in the double digits, and South Carolina has the third-highest unemployment rate in the nation.

“Once we have jobs, everything is going to start falling back into place,” said Matt Morris, spokesman for Myrtle Beach Mall, where revenue was up slightly this summer. The job uncertainty and lagging economy has kept consumers from spending and Myrtle Beach Mall from reaching the revenues it would like, he said.

“We’ve had solid traffic and our sales reflect that,” Morris said. “Certainly, we’d like it to be stronger. There are still some residuals left over from the economy itself.”

The SkyWheel, a nearly 200-foot-tall Ferris wheel that debuted on the oceanfront in Myrtle Beach in May, had a good summer, but it wasn’t quite as good as officials had hoped, general manager Chris Trout said. “We’re satisfied with the summer. We came real close to our projected number of riders,” he said, declining to give specific numbers. “It was steady from the get-go. It was a good year.”

Business was booming this summer at another somewhat new attraction in Myrtle Beach – the overhauled Dolly Parton theater that switched to Pirates Voyage in June after a 19-year run as Dixie Stampede. Demand was so great, the theater added a fourth show on some days, which it didn’t do last year, and many days, all the shows were sold out, said Larry McCoy, the theater’s sales and marketing director. “We had a lot of new people come to the show for the first time,” he said. “It’s exceeded our greatest expectations.”

Businesses aren’t sure what to expect for the fall season, with many travelers booking their trips just a couple of weeks in advance. Morris is optimistic that spending might pick up, but Friday’s jobs report didn’t signal improvement. Lodging is likely to follow the same pattern it did all summer: occupancy slightly down or even with last year, with room rates higher than last year, Damonte said.

But the beach, like destinations across the country, won’t be back to better times until people are back to work and until those who are still working aren’t trimming their trips out of economic fear, Loftus said.

“That’s what’s out there,” he said. “People say, ‘We’ve got to cut back. Why? Because the economy is bad.’”

AAA Predicts Fewer Will Travel for Labor Day

Business Week: AAA says fewer Americans will travel over the Labor Day weekend than did a year ago because of the weak economy and higher airfares.

The auto club predicted Wednesday that 31.5 million Americans will travel at least 50 miles from home between Thursday, Sept. 1, and the holiday on Monday, Sept. 5, a decrease of 2.4 percent.

Most will travel by vehicle, but 8 percent will fly. AAA said air travel will decline because fares are 13 percent higher than a year ago. Airlines raised prices early this year to offset jet fuel costs and have held prices steady even as fuel has fallen since April.

Other numbers:

-- Rates at mid-quality hotels are expected to be 6 percent higher than a year ago, costing travelers about $148 per night.

-- Weekend daily car rental rates are expected to be 7 percent lower than last Labor Day.

AAA based its forecast on research by Boston-based IHS Global Insight.

States Cutting Back on Tourism Advertising

USA Today: Fewer state and local governments are urging Americans to "come and visit us" — just as more people say they're hitting the road or are ready to go. About 20 states have cut spending in the past year on advertising and other promotion and support to try to lure tourists and their vacation dollars, the U.S. Travel Association says.

That includes states that depend heavily on tourists' dollars such as Hawaii, Washington, New York, South Carolina and Arizona. One state — Washington — has shut down its tourism promotion office after lawmakers couldn't come up with the $2 million they usually spent to attract visitors.

Tight budgetary times are the reason for the cuts. They're resulting in less advertising aimed at getting visitors. Many tourism offices are laying off employees, inviting fewer travel agents and writers in on "familiarization" trips, and avoiding expensive trade shows, where state travel officials traditionally have courted corporate travel and convention planners.

"Everybody has to figure out how to do more with less," says Mike McCartney, CEO of the Hawaii Tourism Authority, which had its budget lowered and capped at $69 million each of the next four years compared with $81 million a year ago. "You're not going to see a lot of our ads on CNN."

The cutbacks come as many Americans and businesses have shaken off their recession-induced skittishness and are traveling again. Spending on travel and tourism increased 0.6% in the first quarter of the year after an increase of 2.6% in the fourth quarter of last year, according to the latest figures from the U.S. Department of Commerce's Bureau of Economic Analysis.

Reflecting a growing demand for travel, overall growth in prices for travel and tourism goods and services rose 9.8% in the first quarter after a 1.7% jump in the fourth quarter of 2010. Many Americans — more than six of 10 — said they were tired of sitting at home and were ready to travel again this summer, a USA TODAY/Gallup Poll found in May. According to the poll, they were willing to go on vacation knowing it would probably cost them more than a year ago.

Selective ad spending

With slashed budgets, state marketers are learning to do without expensive advertising tools they've relied on. Few states buy national ads. Instead, some spend what advertising money they have on select, targeted markets.

The Nevada Commission on Tourism, for instance, has stopped advertising in publications such as Conde Nast Traveler and National Geographic. It's pouring its ad dollars into ads in cities such as Los Angeles, Phoenix, San Francisco and Seattle, says spokeswoman Bethany Drysdale.

New York no longer has money for television ads, says New York Economic Development Commissioner Ken Adams, whose tourism marketing budget was cut 39% to $7.4 million in the past two years.

Many state tourism officials say the budget cutting is shortsighted and costs them visitors, which ultimately hurts their states economically.

In bypassing national advertising, Arizona has "missed some marketing opportunities," says Sherry Henry, executive director of Arizona's Office of Tourism. Like other states, Arizona has tried to target markets it thinks will deliver visitors. Now that its fiscal year 2012 budget is $8.6 million compared with $19 million in 2009, Henry's office focuses on Chicago and Los Angeles. "We don't have the bandwidth we once had," she says. In 2007, when its budget was $26 million, her office spent $9 million on advertising.

"That's more than our budget right now," Henry says. "When you don't advertise, (travelers) don't keep Arizona on top of (their) mind. And they're going to choose somewhere else."

Social media

Fewer dollars means tourism directors turn to other ways to try to lure visitors. Some have turned to less-expensive online options — such as Facebook, Flickr photo contests and other social media channels.

Nevada tourism officials met with Google to learn about the keywords and search results related to state tourism — such as Hoover Dam or Highway 50, the loneliest road in America. They paid the search engine to ensure that Nevada's online ads show up on websites that discuss these topics and terms, Drysdale says.

Tighter budgets foster more partnerships with the travel industry. In a deal with JetBlue, New York saved money by allowing the airline to paint the state's iconic "I Love New York" logo on an Airbus A320 in a co-branding campaign.

The Hawaii Tourism Authority has partnered with hotels to buy large newspaper ads in San Francisco. Smaller cities and towns that have relied on state marketing efforts could be disproportionately hurt by cutbacks, some say.

"The biggest challenge will be in rural areas, in smaller communities who don't have the budget that Seattle has to market itself," Marsha Massey, outgoing tourism director for Washington told the Seattle Weekly.

Some states that salvaged their tourism budgets had to fight for every penny. Texas had drafted a budget to slash tourism promotion funding to $5 million for 2012-2013 from $32 million projected for 2011. State lawmakers eventually voted to retain spending levels after hundreds of tourism officials rallied in Austin this year to lobby against the cut.

"We were disheartened when we saw the (draft) budget," says Texas Hotel & Lodging Association CEO Scott Joslove. "We've never had that low of a begging point."

Las Vegas Hooters Files Chapter 11 Bankruptcy

Vegas Inc: The owner of the Las Vegas Hooters resort on Tropicana Avenue filed for Chapter 11 bankruptcy reorganization on Monday to block a threatened foreclosure — the latest in a series of financial debacles to hit the local casino industry since the onset of the recession.

The company, 155 East Tropicana LLC, in its initial filing in U.S. Bankruptcy Court listed assets of $10 million to $50 million against more than $162 million in liabilities.

A sister company, 155 East Tropicana Finance Corp., also filed for Chapter 11 reorganization. Under Chapter 11, companies continue to operate while they propose a plan of reorganization that creditors at some point will vote on.

Mike Hessling, president of the property, said the bankruptcy was filed after efforts to negotiate another solution with the company’s main bondholder, which bought the debt at a discount, were not successful. “So we’re going to negotiate this way," he said of the bankruptcy filing.

Hessling declined to name the bondholder, but records show Canpartners Realty Holding Co. IV filed a claim against the property in December and has been threatening to foreclose since February, with the latest foreclosure date set for Aug. 8.

The bankruptcy filing will likely halt the foreclosure on that date, although Canpartners can ask the Bankruptcy Court later for permission to foreclose. Records indicate the property is encumbered by mortgage and bond debt totaling $162 million plus hundreds of thousands of dollars in trade claims. The initial filing didn’t fully disclose exactly how much is owed or exactly how much 155 East Tropicana feels the property is worth.

The Hooters bankruptcy aimed at blocking a foreclosure is in contrast to another recent Las Vegas gaming bankruptcy — Riviera Holdings Corp. — that was far friendlier. In that case, much of the company’s debt was purchased by an investor (Barry Sternlicht), who went on to assume control of the company through a prearranged plan.

Hessling said it will be business as usual at the Hooters property — which has 696 rooms and about 650 employees — while the bankruptcy case is resolved. The company’s license to use the Hooters name won’t be affected by the filing, he said.

"The company is throwing off a lot of cash. The place has been busy," he said.

The case is likely to last for months or even years, depending on whether debt holders and other creditors sign off on reorganization plans. It may take until the end of the year before a plan is voted on, Hessling said.

Hooters has been in default on its debt since April 2009 as the recession harmed its ability to service its debt. Hooters, which stopped filing public finance reports after the first quarter of 2010, had repeatedly warned before then that a bankruptcy was possible.

155 East Tropicana is owned by Hessling and other investors who acquired the property just east of the Strip in 2004 — during the economic boom — when it was called the San Remo.

Big unsecured creditors listed in Hooters’ initial filing including Sysco Food Services, $139,000; NV Energy $129,000; International Game Technology, $126,000; and Hooters of America, $69,000.

The filing was preceded by several gaming bankruptcies in and affecting Las Vegas including: Tropicana Entertainment LLC, Herbst Gaming, Station Casinos, Black Gaming, Riviera Holdings and Fontainebleau Las Vegas.

Las Vegas Strip Clubs Offering Discounts & Freebies

LasVegas Review-Journal: Times are rough in Las Vegas, even for Sin City's second-most lucrative vice.

With the recession still dragging down discretionary spending, just the opportunity to ogle -- or fantasize about your chances with -- dozens of beautiful naked women isn't enough to pack in the tourists these days. So a number of Las Vegas strip clubs are offering discounts and freebies to seal the deal, particularly during off-peak hours.

Some, such as Cheetah's, will give you two-for-one lap dances every afternoon. Others, like the Can Can Room and Crazy Horse III, halve the price of a lap dance that usually costs $20 for three to 4½ minutes at an all-nude club or two minutes at a topless joint.

And if the prospect of a nude woman writhing a few millimeters from you isn't enough to get your business, how about a nice brisket? Treasures lays out a free buffet, featuring brisket, pizza, bratwurst and Italian sausage to entice customers during the early evening hours, when business typically is slow.

"For people getting off work at that time, it's quite a draw," says Nicholas Foskaris, assistant general manager at Treasures. "The early hours are very tough in this business, and always have been. When I was young, that (free food) was what the hotels did to bring people in. So that's what we do.''

He says that business began to sink as the recession deepened at the end of 2008 and that 2009 was rough. “But we started to pick up at the end of 2009 and it has been busy ever since," Foscaris notes.

The club also offers deep discounts on booze during slow times -- as low as $1 for drinks that normally might cost $10.

FOLLOW THE DOLLARS

"For years, Las Vegas has pretended like the adult community doesn't exist," says Wayne Bridge, CEO of the Sin City Chamber of Commerce, an alliance of adult-oriented businesses. "It's a huge part of the economy and it's really helping to carry a lot of people.''

At last count, there are 32 active strip clubs and between 30,000 and 40,000 registered exotic dancers in the Las Vegas Valley. On weeknights, some 1,500 women bump and grind at clubs here; weekends, that number doubles or triples.

"It's huge," Bridge says.

How huge? An estimated $8 billion per year, second only to gaming as a component of the Las Vegas economy. Strip club managers say the freebies and discounts are big draws, and Las Vegas local C.J. Duncan agrees. He drops by the palatial Larry Flynt's Hustler Club for free food and drinks at least once a month.

Duncan's reason is simple: "It saves me money."

He seldom springs for a lap dance, the strippers' financial mainstay. He eats, drinks and just enjoys the scene at the Walmart-size "erotic events center" staffed nightly by 100 dancing "honeys."

"Gentlemen's clubs have a taboo feel, but more often than not it's pretty chill," Duncan says. "It's an interesting dynamic."

Diana, a manager from Cheetah's who didn't want her last name published, says her club doesn't provide free pizza and wings specifically to draw in customers: "I don't want to have to worry about people drinking and not eating. When people get off work, they're hungry."

At Strip Hop, a couple miles off the Strip and where music is all hip-hop all the time, free booze is poured nightly. And Sherri's Cabaret, a short cab ride from the Strip, recently opened a tattoo parlor. Have a $200 tattoo inked between 7 p.m. and 5 a.m. and you get a free lap dance, too.

Jacko Smiley, a VIP host at Treasures, says promotions help attract a lot of clients: "They want a deal. They want something for free."

WORKING HARDER, BUT MAKING IT

If Treasures' business is indicative, such marketing moves seem to be helping a skin-industry comeback. In 2010, its business increased by 45 percent.

"It's not as high this year, but it's pretty close," Foskaris says. "It's still steadily improving."

The club's VIP hosts, too, are hustling to bring back customers. Smiley, for instance, has been working his client list, calling out-of-state, repeat customers and promising them deals and free luxuries. "I'll say and do whatever I can to get them back here," he says.

Smiley gave a bachelor party from Los Angeles a bottle-for-bottle match on top-shelf vodka while they celebrated at Treasures. They wanted four bottles? No problem. He gave them eight.

"They're happy as clams," Smiley says. "And they're going to share alcohol with the girls. They'll get lap dances. They'll pay with credit cards, and they will tip everyone. It's a win-win for everybody."

On weekend nights, Treasures sees 8,000-12,000 customers, but on weekdays, the club only has from 350 to 450 patrons. Smiley says the clientele tends to arrive in larger herds now, rather than smaller groups of one or two people. "They get a better entry deal with a group rate," he theorizes. The $20 cover charge is waived and VIP seating is offered to any bachelor party-sized groups that will buy a $300 bottle of liquor.

STRIPPERS FEEL THE PINCH

Less than a mile away at Diamond Cabaret, the club experienced its own rough patch a couple of years ago, says Alexis, a six-year dancer at the club. Now, customers, mainly tourists, have been coming back. On a good night, Alexis says, dancers can take home $1,000. Strippers in Las Vegas work as independent contractors, not club employees, and tips are 100 percent of their take-home pay.

"Guys probably tip a little less than before the recession, but it's still good money," she says. On slow nights, a $100 take-home makes for a sad exotic dancer. "You at least want to make more than what you could make at any other job because why else would we do this?" she asks.

The average customer expects to spend about $100 on a visit to a strip club, Alexis says, but that can increase quickly if he meets the right girl: "Obviously, if they like somebody, they end up spending more money." In response to the recession, Alexis and her colleagues have adjusted their own marketing efforts.

"The girls now are nicer to the customers," she says. "You want to make sure the guy feels comfortable spending. We actually put more time into it."

Most men at strip clubs just want companionship, she says, so the longer a dancer talks to him, the more memorable his lap dance will be. "It's a good way to get repeat business," Alexis says.

Shannon Colcord, a dancer at Spearmint Rhino for four years, says strip clubs usually are slower during the summer, when fewer conventions are in town. "It's more a party crowd now," she says. "And they're just not spending as much." Colcord's income has dropped by two-thirds since May, in part because of the seasonal difference and in part because of the continuing recession.

Dancers at the Rhino actually pay the house $45 to $85, depending on the shift and also tip the disc jockey, hosts and valet. If it's a slow night, Colcord says, some strippers can lose money.

"Now I go into work, and I'm not sure if I'm going to make money," she says. "It's all relative to the girl. It's just a gamble. You never know."

Colcord now cultivates a regular clientele, most of whom live in other states. "I make sure when they're going to be in town, I work," she says.

Most locals, Colcord says, don't spend as much as tourists: "Basically, they want to have a beer with a good view."

GOOD TIMES AHEAD?

Like the other venues, Cheetah's had a couple of tough years, but one manager says things have gotten better recently. "It's starting to pick up now," Diana says. "I think people are becoming secure with themselves right now."

She also has noticed an increase in female customers, a trend that Treasures' Foskaris has seen, too. "It's an extension of a nightclub," Diana says. "I don't think there's an insecure feeling anymore. Women get dances as well as men."

She says the industry also has been affected by the Strip itself. "The business gets a little tougher because the casinos are more self-contained," she explains. "It's tough on any kind of nightclub that is free-standing. Every time another nightclub opens, it hurts our industry a little more."

Foskaris says the competition is tough, and that a lot of strip clubs have closed. Publicly held Rick's Cabaret International, for instance, closed its monstrous Las Vegas location in April.

"We have done everything possible to make this location viable since its acquisition in 2008, and we now believe it is in our shareholders' best interests not to continue these efforts," Eric Langan, president and CEO, said in a statement at the time. "We do not believe the Las Vegas market itself will return to its former strength in the near future, and thus it is more logical for us to use our financial and management resources to focus on viable acquisitions and grow our other properties."

Treasures disagrees.

The club, a Romanesque pile that bills itself as "The Most Luxurious Gentlemen's Club & Steakhouse in the World," is obtaining permits to expand to a three-story, 20,000-square-foot building with a rooftop deck and 45-foot stage.

Gushes Foskaris: "It's going to be amazing."

The Decline of Las Vegas Quickie Weddings

MSNBC/Bloomberg: The quickie wedding, long a Las Vegas tradition for romance-besotted tourists, may be the latest casualty of rough economic times. Fewer couples have been pledging their love in Sin City as the number of visitors has fallen and some couples postpone marriage or shun it entirely. “If you don’t have a stable job, it’s hard to say, ‘Let’s get married and start a family,’ ” says Diana Alba, clerk of Nevada’s Clark County, whose office issued 91,890 marriage licenses last year, down 16 percent from 2007.

Dianne Schiller, owner of Renta-Dress & Tux Shop, a wedding and formal wear store in Las Vegas, says her business has dropped 15 percent from two years ago, forcing her to stock more inexpensive gowns. “People are spending way less,” Schiller says. Adds Cliff Evarts, founder of chapel operator Vegas Weddings: “Gas prices, airplane ticket prices, all those things impact people’s ability or desire to come to Vegas.” Some 37.3 million people visited the city last year, down from 39.2 million in 2007, according to the Las Vegas Convention and Visitors Authority.

The slump is prompting the 90-plus wedding chapels in the county — where there are no requirements for blood tests or a waiting period — to shift their focus to husbands and wives seeking to renew their vows and “commitment ceremonies” for same-sex couples who can’t legally wed in Nevada. “Just because there is a decline in marriage certificates, there isn’t a decline in love,” says Charolette Richards, owner of the Little White Wedding Chapel, which offers drive-through service in its “Tunnel of Love.” Richards, who in 1987 married Bruce Willis and Demi Moore and has hosted weddings for Britney Spears and Joan Collins, says recommitment ceremonies now make up about a third of her business, a big increase over prior years. “People today are renewing their vows more than ever,” she says.

At $60 for a marriage license, Clark County has lost some $2 million in annual fees from weddings since the peak in 2004. Now the county is considering official certificates for couples renewing their matrimonial commitments, which could help make up some of the difference, Alba says. “If we did 1,000 annually and we charge, say, $45, that would still be some revenue that we didn’t have before,” she says. The certificates under consideration would be optional and would display the couple’s original wedding date. “We want it to be something fun,” Alba says. “There is a market among tourists, particularly from foreign countries, who want … a certificate that contains an official seal that says Las Vegas.”

Chapel operator Evarts is lobbying local officials to issue the certificates. Since 78 percent of visitors are married, he says, it’s smart to shift the focus away from weddings. That would allow companies such as his to market to some 30 million potential customers a year, as opposed to the far smaller number of single visitors. “There’s a real opportunity,” Evarts says, “for Vegas to reinvent itself as the vow renewal capital of the world.”

The bottom line: As the economy suffers, Las Vegas is seeing fewer quickie weddings, but at one chapel vow renewals now make up a third of business.