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FEMA cuts the purse strings


A lot of people, hurricane refugees and many hoteliers included, aren't happy with yesterday's news that FEMA is pulling the plug on Dec. 1 on payments for hotel rooms for people driven from their homes following Hurricanes Katrina and Rita. As of today, evacuated families occupy 53,000 hotel rooms in Texas, Georgia, Mississippi, Louisiana and a few other places.

Hoteliers face the prospect of occupancies plummeting from 100 percent to nearly zero overnight. But their problems go beyond the simple arithmetic. First and foremost, they need to find ways to fill these rooms. Many of their regular customers have probably gone elsewhere, so it will take a combination of shoe-leather selling and fast-acting marketing (via the Internet, for example) to lure some of these guests back.

A bigger problem for hotel owners is the mess they face as the evacuees vacate. Many of these guests have occupied their rooms—often four or six to a room—for nearly three months straight. They've cooked in them and generally spent 24 hours a day in facilities not designed for long-term residential use. In many cases, these rooms will need substantial and expensive renovations to restore them to usable service, let alone to meet most chain and AAA standards.

One franchise chain executive I spoke to earlier this week at the New York Hotel Show showed sympathy for their franchisees faced with this dilemma but said his brand probably won't be willing to lessen its standards, even for a short period of time, to allow the owners to make necessary repairs.

A lot of hoteliers viewed the evacuees as a bonanza during the traditionally soft shoulder season of fall. They may think twice once they assess the costs they face.—Ed Watkins, Editor

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