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Hotels Copes With Flu Fallout

It’s a tough time to be a hotelier in Mexico. First, drug-related violence put a crimp in spring-break business. Now, a rapidly widening swine flu crisis in the country and around the world makes Mexico a less-than-attractive travel destination. And, as a topper, a 6.0 earthquake rocked the country yesterday.

U.S. hotel chains generally report slight rises in cancellations of bookings into their Mexican properties, and all companies are either waiving cancellation fees until the crisis passes or are working with individual travelers on a case-by-case basis. So far, there have been no reports of the illness among guests or employees at U.S.-owned or –managed hotels in Mexico.

While no U.S. chain seems to know what effect the crisis will have on future bookings, travel in Mexico will surely decrease in the coming days and weeks. Both the U.S. Department of State and the Centers for Disease Control issued warnings against travel down south. Yet, Europeans don’t seem to be as rattled by the outbreak. European flight search engine Skyscanner says it hasn’t seen any downturn in res activity to Mexico, particularly to coastal resorts.

Most chains operating in Mexico are coping with the outbreak by stepping up sanitation protocols throughout their properties. Starwood, for example, requires employees in certain job functions, such as housekeeping, to wear protective masks and gloves and promotes frequent hand washing. It’s also using disinfectants on phones, computer keyboards and other devices.

Like most of the worldwide lodging industry, business has been down significantly at Mexican hotels so far this year. According to Smith Travel Research, through March, countrywide occupancy was 57.3 percent, off 11 percent from last year. However, rates have risen a whopping 15.1 percent, based on 20-percent-plus hikes in January and February. First-quarter RevPAR was up 2.4 percent, despite a 4.8-percent drop-off in March.

Most public U.S. hotel companies took a beating in the stock market yesterday. Starwood share prices tumbled 6.1 percent, while Wyndham stock fell 5.3 percent. Marriott was down 5.0 percent, and Choice shares decreased by 3.2 percent.

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