Travel industry says bailout rhetoric goes too far

Hotel and tourism industy officials are warning about a damaging “AIG effect” on their local businesses.

Alarmed at the fall-off in corporate bookings at local hotels, restaurants and other venues, the hospitality types say congressmen need to tone down their anti-business rhetoric. And they specifically said Sen. John Kerry’s plan to crack down on extravagant events organized by Wall Street bailout recipients is sending a bad message to other businesses.

“The rhetoric coming from Washington that has turned the meetings and convention industry into red meat for politicians is chilling,” said Pat Moscaritolo, head of the Greater Boston Convention & Visitors Bureau. “Real private-sector jobs are now suddenly in peril unless our elected officials tone down the rhetoric.” Paul Tormey, general manager at the Fairmont Copley Plaza Hotel, said the recession has clearly hit hotels and the entire hospitality industry hard. But he said some corporate meeting planners who work for non-bailout businesses are reluctant to book events, afraid they’ll get criticized.

Among others, American International Group, the insurance giant that’s received $170 billion in bailout funds, came under intense criticism last year for hosting a corporate retreat at a resort spa – after it received federal funds.

“We call it the ‘AIG effect’ and it’s bleeding over to other” nervous businesses, said Tormey.

But Kerry, who has filed a bill limiting what bailout recipients can do with their money, rejected the notion that his proposal will hurt other businesses.

“I introduced this legislation based on a simple concept: If a company accepts bailout funds from the taxpayer, it can’t waste money on lavish parties, expensive dinners and Tiffany trinkets,” said Kerry in a statement. “This bill is not aimed at banning fun of any kind. Normal marketing and travel won’t be affected one iota.”