Speaking during this week’s New York University International Hospitality Industry Investment conference, Best Western International CEO David Kong said since June 4 hotels located around the Gulf Coast experienced a "tremendous amount of cancellations" and "the number of inquiries coming in have dropped significantly" due to the British Petroleum oil leak raging through the Gulf of Mexico.
"I am worried about the hotels on the Gulf Coast," he said. "I was just talking to a couple of our hotel owners and they were [trending] just fine and bookings were the best they had expected for the summer. But since Friday they had tremendous cancellations and that was when there was mass media coverage of all the oil being found on beaches. They have had a disastrous couple of years so this adds up."
In a recent survey of 50 hotels located across the Gulf Coast, 60 percent said they are experiencing group booking cancellations due to the oil spill, while 28 percent said they are seeing increased difficulty in booking future events, according to the Knowland Group. According to the survey, 39 percent of polled hotels said they have had cancellations last weekend that were "directly related to the spill."
Ashford Hospitality Trust CEO Monty Bennett said demand may be pushed to other locations as travelers will typically still travel, just to another location.
"When Katrina happened, what you saw was a huge influx of business into Houston, Austin and Dallas. You may have all these travelers that may not go to the Gulf Coast, but usually people are set on traveling," Bennett said. "It is going to be interesting to see what happens, where that demand is pushed. I am pretty optimistic that the demand won’t go away, it will go to other places."