Jim Tisch, the leader of Loews Corp., said the U.S. did a “good job of killing” the hotel business by lambasting corporate travel and hurt American International Group Inc.’s ability to return bailout funds by curbing pay.
“The criticism that took place of group travel was really a death knell for the industry,” Tisch said yesterday in an interview at an office of the New York-based holding company, which owns hotels. “It’s easy for the politician to get the sound bite. What they are doing with those sound bites is putting maids and bellmen out of work.”
Loews’s hotel unit posted a $34 million loss in 2009, compared with a $40 million profit in 2008. Tisch, the chairman and chief executive officer of Loews, said group travel comprises about half the firm’s hotel business, and operations suffered as lawmakers disparaged corporate trips amid the $700 billion rescue of financial firms. In 2008, bailed-out AIG canceled about 160 events costing a total of $80 million.
Loews’s fourth-quarter average room rates fell 14 percent from the year-earlier period to $217. Occupancy decreased to 61.6 percent from 65.8 percent, Loews Chief Financial Officer Peter Keegan said yesterday in a conference call.
President Barack Obama last year said companies receiving aid should curtail travel and pay. “You are not going to be able to give out these big bonuses until you’ve paid taxpayers back,” Obama said at a town hall meeting in February 2009. “You can’t get corporate jets. You can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers’ dime.”