Fallout From Poor Winter Business Affecting D.C. Hotels

<H1> Fallout From Poor Winter Business Affecting D.C. Hotels</H1>By Barbara Cook

<I>Washington, D.C. </I>- The capital's travel industry is still struggling to gain back the losses it suffered in January and February because of the severe snowstorms that paralyzed the city, as well as continued uncertainty over the federal budget that caused unprecedented shutdowns of government facilities late last year.

The good news is that the upcoming presidential election seems assured to result in an upswing in individual business trips and small meetings as corporate America seeks to understand and influence the setup of a new government.

Indeed, politics influences economics in the local travel industry. A change in political parties at the presidential level translates into a major growth spurt for business travel here because the entire infrastructure of the executive branch will be transformed by new people and new policies. The return of an incumbent president still spurs travel growth, however, because many strategic changes in personnel and programs are effected during a second term.

The bad news is that hotel managers in Washington are labeling this "a tough year," in the belief that 1996 receipts will fall behind those of 1995. Although November's election will boost future business, Congress will spend fewer days in session in 1996 and will adjourn early to campaign, dampening the level of business meetings during the fall months.

"We were hoping April to June would pull us up," said Dan Mobley, president of the Washington Convention and Visitors Association. "Overall, it's close, but we can't get back what we lost in January and February." Preliminary hotel occupancy figures for June show the city at 79.78 percent compared with June 1995, which was 80 percent. "It's hard to be any closer," Mobley said, "but we want to be ahead."

However, Emily Vetter, president of the Hotel Association of Washington, pointed out that the average daily lodging rate was up 5.9 percent in the first six months of this year, reaching $132.04-which she said indicates a higher corporate mix in the city, resulting in higher spending.

Officials at the Hyatt Regency Washington, which books a substantial number of corporate meetings and transient travel, are hoping for a much-needed gain in business during the remainder of 1996. "We're suffering a short-term impact, but with the election and inauguration coming up, Washington will see a definite upswing in business travel and groups," said public relations director Susan Jacobsen.

According to Mobley, individual business travel this year is up by 5 percent. This growth trend, which has been evident more recently in Washington, can be attributed to the improved economy nationwide, according to industry observers.

Small-group business through May improved, while big meetings were off "substantially," Mobley said. Several large meetings were canceled during the snowstorms of early winter, and either weren't rescheduled or were held at a later date with a reduced number of registrants. For example, the Grand Hyatt had booked the American Institute of Certified Public Accountants for January, with 700 to 800 delegates expected. The meeting was postponed due to bad weather and, when it was held in February, attendance was way off.

Advance bookings for large-scale meetings are down, Mobley said, because Washington is slated to have a new and substantially bigger convention center in late 1999 (<I>Meetings Today</I>, April 22). "People are waiting for the new center," Mobley said, "so they won't squeeze in a meeting at the old building." Meetings officials here hope the new center will generate a return to a healthy citywide convention business.

The decline in large meetings here has forced hotels such as the suburban Radisson into competition for business with city hotels that formerly specialized in citywide conventions. At the Radisson Mark Plaza Hotel in Alexandria, Va., director of sales and marketing Amy Copeland said she expects to see a rise in the volume of small meetings during the fall and the first part of 1997. "We don't see an increase in the 400-person meeting," she said. "Companies are having smaller meetings, probably due to cutbacks in the companies themselves."

Copeland said the hotel is promoting its Business Class accommodations. Business Class, an all-inclusive package available for $159 per night, includes upgraded accommodations in the Plaza Club, free local phone calls and fax service, complimentary continental breakfast buffet, computer modem hookup and free in-room movies. Guests also receive complimentary shuttle service every 30 minutes to and from Washington National Airport, the Pentagon and Pentagon City Mall/Metro subway station.

Vetter expressed optimism that as the groundbreaking for the new center takes place in the first quarter of 1997, "it will start a morale boost among hoteliers."

For 1997, Mobley predicts an improvement in business because of the election, adding that the boost in travel receipts due to a new administration lasts about 12 months. "When Clinton came in 1992, that was a great year," he said. "The White House changed, and it was reflected in our numbers."

The early Clinton legislative agenda-which included efforts at health care and welfare reform-also provided a healthy spur to business and meetings travel to Washington as corporations and associations gathered here to follow the progress of the congressional debates.

Looking ahead, the year 2000 may provide a heartening increase in the travel industry overall, not just in Washington, D.C., according to many officials. "2000 will be a fantastic year," Mobley predicted. "People have already selected where they want to be for the millennium year. A lot of people want to be in Washington in 2000, both for meetings and personal travel.