Monday, June 29, 2009

All the fat cats went home. Happy now?

Part of the reaction to the recession has been a definite anti-rich attitude. It began with concern that companies receiving U.S. government aid were still holding fancy events in exotic locations, but then graduated to attacks on business practices in general, whether companies were receiving government aid or not. Recently I saw that one of my technical publications was warning its readers that CIO pay would be capped.

Well, those who are worried about the so-called excesses of business can take heart that their dreams came true at the recent U.S. Open:

The sun was shining and the temperature was around 70 degrees at Bethpage State Park on Tuesday afternoon, perfect for watching golfers prepare for the United States Open this week. Indeed, tens of thousands of fans who paid $40 were walking the course.

Few fans, though, seemed to be in the 50 or so hospitality tents, some of which cost $230,000 to rent for the week. Several tents lining the first fairway had signs on their doors that read, “Tent Closed.”

Their absence, although early in the week, was another reminder that corporate spending on sports — even at premier events like the Open — is continuing to sag as the recession wears on....

To help make ends meet, the U.S.G.A. has trimmed spending this year. The tents for the news media and others are less ornate, for instance, and silverware in the dining areas has been replaced with biodegradable plastic forks and knives.

That will only partly offset the decline in revenue from the hospitality tents. Some companies that agreed to rent them before the financial crisis took hold are not using them to avoid having to pay for food and beverages, or to steer clear of unwanted scrutiny....

The more muted atmosphere at the event...could trim hopes of an economic windfall for the municipalities near the golf course. In 2002, when the event was also at Bethpage, security was so tight that fans could not stop in nearby areas. Business dried up.

Of course, this only affects isolated municipalities. A few months ago, an entire state was targeted.

Hawaii has suffered one of the worst winters for tourism in recent years....

Hotel occupancy rates in the winter were the lowest in at least five years, and in February -- traditionally the state's busiest month -- the rate dropped to 75%. That was the lowest level since 1991, during the Persian Gulf War, when it fell to 69.7%, according to Smith Travel Research.

The firm said today that the rates for February have ranged from about 80% to 88% over the last five years. The average daily room rate -- another key measure of the industry's health -- dropped 12.4% in February from the same month in 2008....

Hawaii's problems are compounded by an increasingly hostile attitude toward business travel, particularly when major corporations are laying off hundreds of workers and accepting government bailouts.

In 2008, business travel, such as conferences, conventions and business incentive programs, accounted for about 7% of all tourism in the state, or 442,000 visitors, according to state officials....

132 meetings and business trips have been canceled so far this year and next year, representing a loss of 87,003 room nights. The cancellations amount to a loss of $58.8 million in direct revenue and the loss of 694 full- and part-time jobs in the state's tourism industry....

So who gets the blame for this precarious state of affairs in vacation destinations?

Obama himself may have contributed to what many tourism officials see as the vilification of business travel during an Indiana town hall meeting in February.

Asked about corporate spending and the federal bailout, the president said: "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 taxpayer's dime."

Later, the White House tried to clarify the statement, saying the president encouraged travel, except for companies accepting government bailout money.

However, one forgets that imposition of these restrictions on government beneficiaries puts them at a competitive disadvantage. Think of it; you're a top salesperson, and you have a choice between working a Firm A, which sends its top performers to Hawaii, and Firm B, which caps sales incentives to five times the minimum wage in response to political demands. Where are the good salespeople going to work? And where will the bad salespeople end up?

That is, of course, assuming that people can get jobs. I don't think that cities near prestige golf courses are hiring a lot of people right now. I don't think that Hawaiian travel firms are hiring a lot of people right now.

But I assume that this is what the fat cat condemners wanted. Not only are the fat cats staying away, but now their absence is throwing other people out of work.

Happy now?
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