Hurricane Sandy’s Travel Toll Continues to Mount
Lost revenue from business travel and tourism in storm-affected areas is contributing to billions of dollars’ worth of damage.
As Wall Street and many businesses along the East Coast reopened Wednesday, the travel and tourism industry was taking stock of the economic effects of Hurricane Sandy. Transportation in several affected areas is still at a standstill, and lost business in these areas is expected to contribute substantially to the estimated $10 billion to $20 billion worth of storm damage.
In a recent report, pre-Sandy, the Global Business Travel Association (GBTA) estimated that a Category 3 hurricane on the East Coast could curb $606 million in travel spending and interrupt 514,000 business trips.
The same report predicted that New York City could stand to lose $157 million in travel spending per day.
“New York is a critical economic center and global travel hub, and we are extremely concerned about the ramifications of the city being essentially shut down for business travel,” GBTA spokeswoman Meghan Henning told USA Today. “While trips and meetings can be rescheduled, there is obviously no clear timetable for this to happen right now.”
Several airports in the New York area have reopened, but travelers around the globe remain stranded as many airlines have not resumed full operations. Angela Gittens, director general of the Airports Council International, told the AP on Monday it could be a week before operations return to normal at many East Coast airports.
“The storm has such a wide swath and so many major airports are involved that it’s going to take some time [to recover] because those airplanes are so far away,” said Gittens.
Losses in the hotel industry are also expected to contribute to the storm’s overall economic cost. Lodging analyst Nikhil Bhalla told Bloomberg Businessweek that hotels in New York City, Boston, and Washington, DC, account for 10 to 12 percent of U.S. lodging revenue, and hotel revenue growth—already slow before the storm—will be even slower. Bhalla estimated that the industry will see 5 to 5.5 percent fourth-quarter growth, as opposed to the pre-storm prediction of 6 percent.
Casinos are reportedly faring better. Of the 12 casinos on Atlantic City’s waterfront, most reported only minor property damage such as leaks and broken windows. The establishments remained closed, however, as many employees and customers are unable to access the area. The closures are costing the casinos a combined $5 million a day.
“Even though we could all reopen within 24 hours if we wanted to, the bigger question is the infrastructure: access roads, power, and the situation in the local communities where our employees and our customers live,” Tony Rodio, president of the Tropicana Casino and Resort and head of the Casino Association of New Jersey, told the AP. “There’s no sense opening if we can’t get people in here.”
(photo via @JetBlue)