Hotel Leaders Tell Congress to Back Off

Some of the biggest names in the hotel industry banded together and sent Congress a message Thursday: Back off and remember a “robust travel industry is a powerful economic stimulus,” the letter from 10 executives reads.

It begins: “We understand the economic pressures that have caused many companies to reduce business as part of broader cost-cutting measures. However, we are concerned that legitimate meetings, business events and recognition travel are now being portrayed as perks and symbols of excess. Consequently, many large groups—including those not receiving government assistance—are canceling business meetings and events because they fear being criticized. Make no mistake, these decisions have serious economic consequences.”

The letter cites a Department of Labor report that shows nearly 200,000 travel-related jobs were cut last year and a Commerce Department prediction of another 247,000 lost this year. “That number may grow if the rhetoric is not toned down,” states the letter signed by Jay Witzel, Carlson Hotels CEO; Jay Rasulo, chairman of Walt Disney Parks and Resorts; Thomas W. Storey, president of Fairmount; Christopher Nassetta, CEO of Hilton; Mark S. Hoplamazian, CEO of Global Hyatt; James R. Abrahamson, president of IHG’s Americas Group; Jonathan Tisch, CEO of Loews; J.W. Marriott Jr., CEO of Marriott; Frits Van Paasschen, CEO of Starwood; and Stephen P. Holmes, CEO of Wyndham Worldwide.

John Wolf, senior director of public relations for Marriott said: “This issue is impacting all hotel companies and we're trying to tone down the rhetoric and have a more balanced conversation about the issue, as well as educate members of Congress about the unintended consequences: job losses in a recession.”

The growing concerns have come after many recent meetings have been canceled, some, seemingly because of perception alone. Goldman Sachs reportedly paid a $600,000 cancellation fee recently and moved a technology conference from Las Vegas to San Francisco, potentially a more expensive city in which to meet. It all stems from the reaction, from Congress and the public alike, to AIG’s junkets immediately after receiving federal bailout money. But the trend has continued and companies not receiving federal money are now scared to meet for fear of the backlash.

Businesses small to large are cutting back incentive trips once used to reward top employees, at least according to a USA Today story this morning titled “Posh trips for jobs well-done are fading away.”

“The vast majority of business events serve an essential business purpose,” the letter reads, adding business travel creates 2.4 million jobs, injects more than $240 billion into the national economy and generates $39 million in tax revenues.

The letter “urges” Congress to champion new guidelines established by the industry and the U.S. Travel Association (www.ustravel.org) on best practices for companies to use as a resource for legitimate travel, “instead of legislating rules that may unintentionally hinder economic recovery.”

The guidelines were announced earlier this month by the U.S. Travel Association and can be found on its website. "Members of Congress and all Americans should demand accountability from companies receiving taxpayer dollars—what we need are rules, not rhetoric," said Roger Dow, president and CEO of the U.S. Travel Association. "That's why U.S. Travel Association and our partners have created model guidelines for corporate boards to adopt when determining if a meeting or event has legitimate business return on investment.”


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