New York City—consistently the costliest domestic destination in which to do business in Business Travel News' annual Corporate Travel Index
(BTN, Feb. 24)—arguably was hit hardest by the downturn in the economy and certainly received the worst fallout from the terrorist attacks of 2001, but recent figures show travel is on the rise to the destination, which also has been the slowest to recover from the triumvirate of the recessive economy, Iraq war and terror attacks and alerts.
The number of domestic travelers to the city has improved, according to recently reported full-year 2002 data from NYC & Co., New York's convention and visitors bureau. "Despite the challenges over the past two years, the city saw an increase of 2.2 percent in 2002 for domestic travelers, setting a new record of 30.2 million," said NYC & Co. president and CEO Cristyne Nicholas. The city "reaped the benefits of traveler interest in drive-distance, getaway and cultural travel opportunities."
Though travel buyers point to security issues far and near—in addition to the economy and corporate cutbacks—for the fall in business travel, New York City's crime rate in 2002 decreased 5 percent to the lowest level since the 1960s, as crime nationwide has increased—making New York the safest big city in America, according to figures from the FBI.
Derived from the Federal Bureau of Investigation's 2002 Crime In The United States report, the city's murder rate last year also dropped—nearly 10 percent to the lowest level since 1963. According to the data, of all U.S. cities with populations of 1 million or more, New York City has the lowest rate of total crime committed. "These new FBI crime reduction figures reinforce what a safe place [the city] is," Nicholas said.
Much of the increase in traveler volume, however, is attributed to leisure travel, which rose 3.2 percent to the highest recorded level of 25.9 million travelers. The slow economy continues to contribute to an equally slow recovery of business travel in New York, which was down in 2002 for the second consecutive year, from 10.1 million to 9.4 million. The majority of the decline occurred in the first eight months of 2002. However, "business travel is weathering the recession and shows signs of recovery, especially in the last quarter of 2002," the CVB said.
International travel in 2002 also picked up following the one-year anniversary of Sept. 11. "International travel for the last four months of 2002 came closer to the peak levels for the same period in 2000," totaling 3.4 million for the year, according to the CVB.
The city has experienced a 25 percent drop in international visitors since 2000, but international travel to the United States as a whole fell by 12 percent last year versus 2001, according to the CVB, while New York City only recorded a 10 percent drop. Though international travelers comprise only 14 percent of the total visitor market in New York City, they contribute roughly 40 percent of the total direct spending in the city, the CVB said.
Yet, the good news for hoteliers is that overnight travel to the city increased 11 percent in 2002, to a total of 14.1 million trips, surpassing 2000 levels of 12.7 million. For corporations and their travelers, this could mean a rise in hotel room rates (see story, page 32) as demand catches up with supply.
If room rates rise significantly, travelers are in for a surprise, as, according to BTN's Corporate Travel Index, the 2003 average hotel room rate in New York City was $211.80, putting the city behind only Honolulu as the costliest city in which to stay overnight. (A midprice hotel room in New York City in 2003 cost an average of $129 per night, while an upscale hotel room cost $294.60.)
New York & Co.'s domestic visitor data derive from D.K. Shifflet & Associates Ltd., while the U.S. Department of Commerce provides the international figures.