Are flying coach and staying at budget hotels the “new normal” for businesspeople who travel for work? If so, what does it mean for airlines, hotels and casinos still trying to recover from the economic downturn? Chris Woronka, Senior Gaming, Lodging and Leisure Analyst at Deutsche Bank Securities shares his thoughts with us on what’s in store for the Travel and Leisure Industry in 2010. Will the industry once again be flying high? Or, will the prospects for a better year ahead get grounded?
Be it through optional newspaper delivery, a fee for blankets, or shuttered restaurants, travel and leisure companies have had to trim costs creatively as the recession hurt revenues and profits. The sector has recently been buoyed by expectations of recovery amid signs that business travel demand is starting to rebound. But discounted airfares and hotel rates and volatile fuel prices pose challenges to profitability. Room rates at hotels remain under pressure, while casino operators are looking to Asia to spur growth as prime U.S. destinations such as Las Vegas struggle to rebound. And airlines, which have cut jobs and reduced capacity in the past two years as the economic downturn battered demand, face new security concerns that also could slow recovery. Executives of some of the world’s biggest and best-known airlines, hotel and casino companies will address these and other issues at the Reuters Travel and Leisure Summit, to be held in New York from Feb. 22-24.