Hotels Boom as Storm Evacuees Seek Rooms

Hurricane evacuees have created an unprecedented demand for hotel rooms in the Southeast. Many hotel owners are working around the clock to meet the many needs of guests who aren't tourists.

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Turning now to business news, one person's misfortune can be another's opportunity. That's how it is these days with hotels and people displaced by the recent hurricanes. Analysts say demand from evacuees is helping to drive hotel revenue to its highest level in five years. But for some hotel managers, high occupancy also means more headaches as NPR's Frank Langfitt reports.

FRANK LANGFITT reporting:

It takes more than six hours to drive from the Gulf Coast to Little Rock, Arkansas. But hotel rooms are so scarce in the region that hurricane victims have been making the journey anyway. Evacuees from Katrina and Rita have moved into places like the Wingate Inn, boosting room occupancy. Hotel manager Phyllis Closkey(ph) says she's happy to have the extra business, but she also says that serving the evacuees is stretching her staff.

Ms. PHYLLIS CLOSKEY (Manager, Wingate Inn): Usually one or two people might be in a room. Right now there's four and five and some rooms with six, two adults and three or four children. And it is taking longer to clean the rooms. It takes more food to feed them. They require a lot more of our attention because they just really don't know what to do, so they need to talk. They want to talk to the maids, so my maid minutes have increased simply because the room attendants are taking the time to talk for a few minutes to anyone that wants to talk to them.

LANGFITT: Closkey says evacuees aren't like other hotel guests. They aren't interested in tourism and have no business meetings to attend. One of Closkey's biggest challenges is keeping them occupied.

Ms. CLOSKEY: They come to the lobby and they just let the children run wild in the lobby and scream and yell, and I've had to go and ask the mother if they could please, you know, contain the children. The younger mothers ask me what are they supposed to do with them; they're stuck in a room.

LANGFITT: But a challenge for individual hotel managers is proving a boon to business overall. Jan Freitag is director of Smith Travel Research, an industry analysis firm. He figures Katrina will increase national hotel revenue half a billion dollars this year, and as victims leave hotels for new housing, Freitag says others will take their place.

Mr. JAN FREITAG (Director, Smith Travel Research): The evacuees are just the first wave. The second wave of that will then be, you know, cleanup, insurance adjusters, people working to rebuild the other infrastructure that is damaged. So there's definitely going to be a steady stream of demand.

LANGFITT: Relief and construction workers are already jamming rooms in Jackson, Mississippi. Occupancy there usually runs at 58 percent this time of year. Now it's about 94 percent, according to Scott Sledge, president of the state hotel association. Sledge also runs a Cabot Lodge outside of Jackson. He says that in September alone, his hotel will earn an extra quarter-million dollars.

Mr. SCOTT SLEDGE (President, State Hotel Association): Well, it's certainly like nothing we've seen before.

LANGFITT: Joe McInerney can't recall any event that has driven demand like Katrina. McInerney heads the American Hotel and Lodging Association. He says what makes Katrina different is the scope of destruction.

Mr. JOE McINERNEY (American Hotel and Lodging Association): The 9/11 devastation really took place in nine blocks, and when the relief workers and emergency workers went home at night, they got to sleep in their own beds. Here the people didn't have that luxury.

LANGFITT: Some evacuees complained about price gouging just after Katrina hit. But McInerney says the reports soon ended. Phyllis Closkey, the manager of the hotel in Little Rock, says she dropped rates by nearly $23 to help out evacuees who were maxing out their credit cards. She says that with lower prices and higher expenses, the hotel is actually making less money than usual.

Ms. CLOSKEY: It's taking a lot more money to handle the evacuees; again, food, time, linen. Usually a room with two double beds will have four bath towels while they're requiring six, seven, eight bath towels. So I'm not making more money now.

LANGFITT: And then there are those hotels that aren't making any money at all. Several weeks after Katrina, Smith Travel did a survey of hotels along the Gulf Coast. It estimated that more than 200 remain closed because of damage.

Frank Langfitt, NPR News.

MONTAGNE: And this is MORNING EDITION from NPR News. I'm Renee Montagne in Washington, with Steve Inskeep in New Orleans.

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