US slowdown hits hotels, casinos
The US economic slowdown and credit crunch is hitting the once-booming hotel industry there, a Reuters report said.
“As the economy slows down, there is going to be slowing of activity by business travellers,” Tim Behle, manager at Ernst & Young’s transactions advisory services, was quoted saying.
“There is definitely going to be a noticeable impact on hotels in the U.S.”
The report said because of reduced meetings and conventions, casinos, which depend on these, are also expected to be hit.
“I think the industry is certainly going to be down when you add it all up in ’08,” Jim Murren, president of MGM Mirage, told Reuters.
“There’s no doubt that at the lower end of our business, we’ve seen some softening in occupancy, some reduction in spend,” Murren was quoted said. “That’s clearly a result of the economy.”
The report added that the credit crunch is also hampering expansion plans of hotels.
“The single biggest challenge that the hospitality industry is facing right now is actually the credit market,” was quoted saying.
He was quoted saying that some 5,000 hotels in the development pipeline are having difficulties getting the financing they need.
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