The entire hospitality industry has taken a huge hit as a result of Sepember 11th. Below we report on the various segments of the travel and hospitality industry, ending with some predictions on the fate of the spa industry:

The government is providing $15 billion in compensation for losses stemming from a two-day aviation shutdown after the attacks and the decline in business since service was restored. 'The airlines could give tickets away and people won't get aboard because of the fear,' said Michael Wascom of the Air Transport Association. 'Restoring passenger confidence in the security of the system has to happen first.'

Travel Agencies
Marilyn Carlson Nelson, chairwoman and chief executive at Carlson Cos. Inc., is leading a delegation to Washington in search of $5 billion in federal help for travel agencies. Without government help, many travel agencies will go under. The industry currently employs about 300,000 people.

Corporate Meetings
"Corporate demand will decline even further than it already has," says global industry leader Bjorn Hanson, Ph.D, of PricewaterhouseCoopers. In a recent Business Travel News feature story, Hanson cited five reasons for the erosion: business pessimism overall, safety concerns, volatility in the stock market, the cost and inconvenience of increased security, and the dislocation being experienced specifically in lower Manhattan."

Hotels and Resorts
Smith Travel Research expects that demand for U.S. hotel rooms for the rest of the year will fall 6 percent, month over month. PricewaterhouseCoopers, which had been predicting an improvement in occupancies and RevPAR (revenue per available room) in 2002, now predicts a RevPAR decline in 2001 of between 3.5 to 5 percent—the industry's worst performance in 33 years. Smith Travel has projected a RevPAR decline of 4.7 for the entire year.

According to PricewaterhouseCoopers, hotel construction scheduled for completion in 2002 and 2003 will decline 18.5 percent below the level expected in PricewaterhouseCoopers' July 2001 Lodging Forecast. Bjorn Hanson, Ph.D expects six percent of hotel projects scheduled for completion in 2002 and 2003 to be cancelled or deferred.

Starwood Hotels & Resorts Worldwide--whose brands include Sheraton, St. Regis, Westin and W—announced that it will reduce its workforce by 23 percent, in an effort to curtail the damage by the terrorist attacks this month affecting the travel industry. Starwood, along with the rest of the industry, had been experiencing weak occupancy rates and lower room revenues before the attacks.

Slowing resort and hotel development, along with the decline in corporate meetings, will throw the "stay" spa market a one-two punch. The day spa industry will most likely fare better. "The day spas industry may receive a positive push forward a result of the Sept 11th events," says Fran Acunzo—CEO of Sage Management.
Reports from day spas are mixed. Some day spas have reported a sharp decline immediately following the events. Some are still experiencing a slow-down in sales—especially retail sales. Other day spas report business is booming. One thing is certain; spas providing a safe harbor from the turmoil surrounding us in these troubled days will have all the business they can handle.