The consequences of the global economic crisis on the tourism industry and citizens in societies dependent on it are governed by the same fundamental principles. However, we can’t ignore the diversity between regions and countries where tourism revenues are the primary source of domestic wealth, such as southeastern and southwestern European countries, as well as many Mediterranean countries in northern Africa.

Recently, a competent and client-revered hotel sales director was fired. No surprise there. As hotel operators continue to cut costs to satisfy owner and lender fiduciary responsibility demands, talented sales directors have been laid off and terminated in alarming numbers since the economic downfall of 2008.

Take a closer look | The industry is adopting new trends and practices. To handle the crisis successfully, hotel companies must understand the broader picture and the downturn’s specific features—what makes it different. In doing so, they must come to a true realization of their surroundings, not one that suits or satisfies their particular needs.

What started in the summer of 2007 as a U.S. subprime mortgages crisis eventually became a liquidity crisis that spread throughout the world and turned into an economic crisis that affected all social classes. This is precisely the feature that differentiates downturns from crises. During downturns, corrective government interventions are welcomed by the markets. Negative consequences on the broader social classes, if any, are smoothed out relatively quickly in most cases.

I was invited recently to speak at a life science industry (LSI) meetings conference in Philadelphia end of the year. Puzzled, I asked the conference manager why in the world he would want a hospitality sales and marketing consultant to speak at such an event.

In our previous article, we introduced the Foreign Corrupt Practices Act, discussing its basic provisions, its growing importance as a law enforcement tool by U.S. authorities, and its broad potential application to hotel industry vendors in the context of the government’s prosecution of York International, a global heating and air conditioning company. As we noted, the FCPA generally prohibits giving “anything of value” to a foreign official to acquire an unjustified benefit. The nature of the offence, and hence the penalty, is measured more by the amount of the benefit obtained than by the size of the payments.

Meeting planner guru Joan Eisenstodt responded to my 'Meeting Planners and Hotel Suppliers: Let's Be Fair' article of last month calling for 'a whole bunch of cooperation' right now in hopes that when we do come out of this recession. 'We can do business smarter next time.' Eisenstodt agreed that it’s good that meetings are being booked again, but that it’s 'bad that some of the contracted rates are sometimes as much as 75 percent higher than the published rates' for a given period of time.

Many people have said that spas are recession-proof. People go to a spa in tough times to relieve stress, and they go in good times to celebrate. Spas are places for “me” time to relax and find some balance, but they are also places for “we” time to connect with others for personal and professional reasons. While spas can physically, psychologically, socially and emotionally meet the needs of many people, the challenge is to do so in a financially feasible way. Many spas have been their own worst enemy by getting caught up in the “greed” factor (very high treatment prices). This has caused consumers to re-evaluate the genuine “need” and ability for them to visit the spa. Spas are realizing that their “feel good” bubble may burst if they do not respond to the challenging economic realities.

With the U.S. Department of Justice issuing subpoenas like free rooms to high rollers in Las Vegas, the Foreign Corrupt Practices Act (FCPA) rapidly has become a growing hazard for individuals and businesses operating abroad. As seen by the U.S. government’s case against York International, vendors to the hotel industry are not being spared. And it is only a matter of time before the government looks more closely at other industry practices, including hotel development and operations. Given the potential for jail time, multimillion-dollar fines and the high priority the government is placing on FCPA enforcement, it is the kind of guest best avoided.

With 2009 nearly half over, the hotel sector is clearly in a brave new world. The trends for the first few months of the year showed average national declines of 10.5% in occupancy and 6.5% in average daily rate. This decimated gross operating profits and related EBITDA by at least 30%, even with significant and successful efforts by hotel operators to cut expenses. Few owners today actually know the value of their individual assets. Those that do are part of a minority who were actually able to sell.