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How’s Business?: Hotel worries

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Feeling the sting in an economy of war is the hotel industry. The main culprit hindering this industry is not the war, but the anticipated possibility of terrorism.

The reservations decline and negatively soft bookings have hotel managers taking alternative actions. For example, managers have enhanced marketing tactics and refined user-friendly booking policies, such as the waiving in current cancellation policies.

And although winter is centered on the corporate market, it is the upcoming spring and summer leisure market that can prove quite decisive in this year’s bottom line. Actual damage to the industry will be contingent on the duration of the war and after effects, which at the moment remain unknown.

So long as any expectations exist for future conflict, business improvement remains difficult. The big boys in the city center such as Hilton, the Waldorf-Astoria and NYC Marriott are finding themselves in a general market where daily room rates are averaging less than $180. The third successive year of a steady decline has begun.

Rates are off sharply at nearly 40 percent. But what about hotels in Queens? I spoke with Charles Patel, manager of the Howard Johnson in Woodside. Patel says they are well-balanced between the leisure and corporate markets but have a niche in the Irish market.

Patel said corporate groups have maintained consistent business via Internet advertising with competitive rates.

Notwithstanding travel cutbacks, the business has continued to maintain a good group balance with out-of-town customers who are here for functions such as weddings and funerals.

Howard Johnson guests are pampered with amenities such as complimentary breakfasts and newspapers and magazines, as well as coffee makers in the rooms, Patel said. The hotel’s staff pays close attention to detail with cleanliness and client comfort, and with prices complimenting real value, he said. This leads to great word-of-mouth advertising.

This competitive spirit has paid off for Patel and his Howard Johnson by breaking even in this tough market, where most have sustained substantial losses. So how’s business at this local Queens hotel? Surprisingly well, considering in such a tough market its bottom line held steady. One can only estimate a strong upcoming forecast following an economic reversal.

Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718-461-8317.

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