Rep. Porter - Cooperative Spirit: A Jumpstart to Recovery for the U.S. Travel & Tourism Industry

There is a looming optimism in the industry; an important sign for the economy as the hotel industry alone employs 1.8 million people nationwide.  The optimism is rooted in core economic indicators and, most appropriately, by the successful opening of CityCenter, an $8.5 billion mega development in Las Vegas.  However, 2010 will not be without challenges as the economy slowly heals itself.  It is crucial for the industry to find ways to work together, realizing how a concerted effort on key issues can result in positive gains for all those involved.
 
There is no shortage of economic indicators out there and it seems few can agree on which ones truly signify important truths about our economic situation.  However, for the hotel industry there is one indicator that has always proven to be crucial; the consumer confidence index.  Last February, this indicator was at an all-time low of 25, but has risen three out of the last four months and now sits at 53, according to the The Conference Board.  Most economists define a healthy economy when the index is 90 and a flourishing economy when the index is 100 or more.  
 

Beyond numerical indicators the industry can find reason for hope in the recent opening of MGM’s CityCenter in Las Vegas.  This project faced challenges that were exacerbated in the height of the recession.  Overcoming these challenges was a testament to the ingenuity of those involved and indicative of the strong resolve and cooperative spirit so often found in the industry.  The Las Vegas Convention and Visitors Authority is projecting a 3 percent increase in visitation in 2010, estimating Las Vegas will host more than 37 million visitors.    
 
More importantly, the immediate success the complex is seeing demonstrates Las Vegas beginning to reinvent itself yet again and the strength of the underlying fundamentals of the industry. CityCenter is demonstrating the future of the industry in a time where hotel executives are unsure about pursuing changing business models.
 
CityCenter has utilized cutting edge technology throughout the entire complex using more than 90 IT technologies, many of which are first generation. The importance of this marriage of technology and hospitality cannot be understated, as it is undoubtedly the future of the industry.  However, too many executives are shying away from this growing trend in the face of this challenging market.  Certainly sticking to an older, proven business model may provide short-term comfort, but might very well irreparably damage a hotel’s long-term viability.
 
Positive signs are beginning to show in 2010, but the year is still very young and day-to-day challenges are still abound.  Most notably, Oxford Economics projects the economy will grow at 3.4 percent during the year following the strongest growth in six years in the fourth quarter of 2009.  Financing will remain a hurdle for executives in the near-term.  Overcoming these obstacles will not only require individual ingenuity by executives but an industry realization that teamwork can help lift the industry over these common challenges.
 
The U.S. economy is healing, but we must remember that healing is a process that takes time and patience.  It is all too easy to become consumed with the important day-to-day challenges of operating a business and lose sight of a long-term strategy.  Those inclined to make doomsday predictions, declaring the industry is settling in for many hard years to come are often consumed by a day-to-day focus.  A look at long-range predictions and a close look at industry trends will quickly reveal the travel and tourism industry is proving resilient.  I am confident the leaders of the industry will be able to take advantage of strategic opportunity in 2010, explore new ways of doing business and set new standards for industry collaboration.
 
Congressman Jon Porter is Director of Public Policy for Akerman Senterfitt LLP in Washington, D.C.  While serving in the U.S. House of Representatives, Nevada Congressman Porter was Co-Chair of the Travel and Tourism Caucus and co-sponsored the Travel Promotion Act currently pending passage in Congress.  Rep. Porter is also a former Board Member of the Las Vegas Convention and Visitors Authority and is Past President of Las Vegas Events.  
 
750 9th Street N.W., Suite 750
Washington, D.C., 20001
202.393.6222
jon.porter@akerman.com

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