Obama's Anti-Stimulus Economic Damage Not Limited To Las Vegas

We know how President Obama's call for corporate America to cancel corporate trips has hurt Las Vegas... but now it's coming to a town near you!

Congress ‘Hypocrisy’ on Company Trips Irks U.S. Hotel Industry
By Lorraine Woellert

March 23 (Bloomberg) -- The U.S. Senate last month passed a measure limiting “luxury” spending for corporate travel by recipients of federal bailout funds. Two weeks later, about two dozen senators of both parties left town for political meetings on the Florida coast.

Hotel-industry leaders are seizing on those trips as ammunition in a campaign to get lawmakers and the Obama administration to tone down the rhetoric against business travel, which they say is adding to their economic difficulties.

On March 11, hotel executives including Jonathan M. Tisch, chairman of New York-based Loews Corp., which operates a chain of 18 hotels in North America, Bill Marriott, chairman of Bethesda, Maryland-based Marriott International Inc., the biggest U.S. lodging chain, and Jay Rasulo, chairman of Walt Disney Parks and Resorts, a unit of Burbank, California-based Walt Disney Co. that operates its theme parks, met with President Barack Obama and three Democratic senators to express their concern.

Cancellations

The executives said the political attacks are having a broad effect on their business -- even though the restrictions are intended to apply only to recipients of federal bailout money -- and cancellations have been increasing as the rhetoric heats up.

“We’ve seen companies cancel meetings last minute, leaving 100 percent on the table just to avoid criticism and ridicule,” said Frits van Paasschen, president and chief executive of White Plains, New York-based Starwood Hotels & Resorts Worldwide Inc., the third-largest U.S. lodging company, who attended the White House meeting.

“We’ve also seen meeting planners move meetings from resort locations to city locations, at a greater cost to their companies, again, for optics’ sake,” he said.

A preliminary survey by the U.S. Travel Association, a Washington trade group, suggests the hotel industry suffered about $1 billion in cancellations in January and February. Las Vegas has been hit especially hard, losing more than $131 million in non-gambling revenue in recent months.

On March 18, the U.S. Commerce Department reported that spending on travel and tourism fell 0.4 percent in 2008, the first yearly decline since 2001. Spending on accommodations fell 10.1 percent in the fourth quarter of 2008.

‘Sense of McCarthyism’

The political rhetoric “has a terrible sense of McCarthyism about it,” said Laurence Geller, president and chief executive of Chicago-based Strategic Hotels & Resorts Inc., which owns 19 properties, including the Hotel Del Coronado in San Diego, and who didn’t attend the Washington meetings.

Christopher Dodd, a Connecticut Democrat who heads the Senate Committee on Banking, Housing and Urban Affairs, sponsored the amendment to the $787 billion stimulus package that requires companies that received funds from the Troubled Assets Recovery Plan to curb “excessive or luxury expenditures,” including spending on events and private jets.

Over the weekend of Feb. 27, two weeks after the Senate passed the measure, the Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee, the party fundraising arms for Senate candidates, each held their annual winter meetings in Florida.

Naples Fundraiser

About a dozen Democrats, including Dodd, 64, gathered at the Marriott-operated Ritz-Carlton resort in Naples, Florida. Donors who gave at least $15,000 were invited and offered a “coastal view” room at the group rate of $469, according to the Democrats’ invitation.

Dodd spokeswoman Kate Szostak didn’t return phone calls and emails seeking comment. Afshin Mohamadi, a spokesman for Senator Robert Menendez of New Jersey, the chairman of the Democratic Senatorial Campaign Committee, didn’t return a call seeking comment.

Democratic committee spokesman Eric Schultz said the group doesn’t comment on its fundraising.

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