Sep. 28, 2003 - As a major financial and tourist center and a target of the Sept. 11 terrorist attacks, the New York metropolitan area was hit hard by the recession and the downturn in pleasure and business travel that resulted.

Since then, travel to the region has picked up but, with peak season for business trips under way again, it's clear that the return of business travelers to New York continues to be painfully slow.

"It's still not close to being back," said economist Ken Goldstein of The Conference Board, a Manhattan-based group that tracks the economy to assist businesses. "The business traveler has been a missing ingredient in the New York economy, and a full recovery in business travel is at least six months away and easily 12 to 18 months."

Business travel is at its seasonal peak between mid-September and mid-December.

Goldstein and other local economic experts said that corporate belt-tightening, not lingering post-9/11 security concerns, is the major reason that business travel to the city hasn't fully recovered.

"It's not a fear of flying, it's a fear of spending money," said John Fox, senior vice president in the Manhattan office of PKF Consulting, whose clients include NYC & Co., the private nonprofit corporation that serves as the city's convention and visitors bureau.

He estimates that business travel to the city is off by a fourth to a third from its recent peak in the fall of 2000.

In response to the decline, he says, prices for lodging have fallen from their pre-recession levels. Hotel rooms averged $210.74 a night last October, Fox said, compared with $262.59 in October 2000. Rates vary seasonally. In June, the average hotel room cost $182 a night, Fox said, down from $239 in June 2000.

"We're still well above a lot of other major cities," he said, "but not as much as before 2000."

Average occupancy rates last year were a healthy 75 percent in Manhattan hotels, Fox said. While that's down from the record 84 percent pre-recession average, it's still well above the 67 percent low recorded during the early 1990s recession.

The high average exists despite an increase in the supply of rooms, Fox said. Thousands have been added citywide in recent years -- 3,000 last year alone -- more than offsetting the loss of those in the destroyed World Trade Center complex. The city has about 66,000 hotel rooms, according to NYC & Co.

Getting to New York has gotten less expensive, thanks to lower air fares that, in turn, resulted from weaker demand and growing competition from discount carriers. Discount carrier JetBlue Airways, for example, uses Kennedy Airport as its home base and has grown to become the second largest carrier there after American Airlines.

Southwest Airlines has avoided Kennedy, LaGuardia and Newark, although it serves Long Island MacArthur Airport, 50 miles east of Times Square.

Despite the recession and the attacks, the city retains its traditional lures as a cultural and financial mecca with Broadway and a host of other entertainment options -- a hot town that never closes. It's still the place to be for many industries -- advertising, media and fashion, for example.

The city of 8 million people retains its traditional weaknesses as well, among them congestion, whether travel is on the ground, below ground or in the air. "New York is a busy place," said Lalia Rach, dean of the Tisch Center for Hospitality and Tourism at the New York University School of Continuing and Professional Education. "Your success is part of your problem."

LaGuardia Airport was fifth among the top 15 airports that generate the most complaints from travelers to the corporate travel managers in a July ranking published by the Virginia-based National Business Travel Association. The group represents company travel managers and executives of airlines, hotels and other travel-related businesses. Chicago's O'Hare International headed the list; Kennedy and Newark's Liberty International were not on it.

Chronic problems include delays for international travelers in clearing customs and potentially long and expensive cab rides from airports to the city center, Rach said. Rail links from Kennedy to the Long Island Rail Road's Jamaica station and the A train subway line in Howard Beach will help, she said. They are scheduled to begin operating by year's end.

"Think of other major capitals in the world," Rach said. "Getting from the airport to the center of the city usually is so much easier, and it's usually by train."

Dave Stempler, president of the Air Travelers Association, agrees, saying unpredictable traffic between either New York airport and Manhattan forces travelers like him to build extra time into their itineraries. "It's a bit of Russian roulette based on traffic," said Stempler, who travels to the city several times a year from his offices in Washington and Maryland.

The city's newest airline terminal, though, was designed with business travelers in mind, its operator says. Kennedy's Terminal 4, opened in May 2001 and handles primarily international flights by 50 airlines. It has five airline-operated lounges, two conference rooms available for rent in the arrivals area and two business centers, where faxing and copying services are available.

Janice Holden, marketing and business development director for the privately owned and operated complex, says a 50-position customs and immigration hall can clear incoming international passengers without luggage in an average of 12 minutes and travelers with luggage in 17 to 19 minutes on average.

Traffic congestion isn't the city's only shortcoming, from a business point of view. New York was a weak eighth among the top 16 North American cities in 2000 in exhibitions held, according to the Center for Exhibition Industry Research. Orlando led the list.

Rach and others contend that the city's largest exhibition hall, the 800,000-square-foot Jacob K. Javits Convention Center on Manhattan's West Side, needs improvement. She and others said it's too small to be competitive, and its appeal is further diminished by its location -- in an industrial area blocks from most hotels and restaurants and the city's subway lines or commuter rail stations.

City planners have proposed doubling Javits' size in an expansion northward. That would be part of a long-term redevelopment of the West Side that also would include extension of the No. 7 subway line from Times Square to Javits, and construction of a hotel adjacent to Javits, and a mixed community of offices and residential high-rises, interspersed with parks. A domed stadium, fit for the Jets and the 2012 Olympics being sought by the city, also is proposed for the area.

"We cannot handle 65 percent of the largest shows in the country simply because Javits is too small," said NYC & Co.'s board chairman, Jonathan M. Tisch, who also is chairman and chief executive of Loews Hotels. "So we're giving away to other cities in America the kinds of shows that could and want to come to New York City and use our hotel rooms, use our restaurants, and keep travel and tourism robust."

Although the city's West Side proposal, unveiled in February, drew immediate community opposition, Mayor Michael Bloomberg was quoted as saying last fall that the negative impact of not expanding the Javits center is "just too cruel to contemplate."

The majority of shows Javits is able to handle tend to draw most attendees from the New York metropolitan area, rather than from out of town, Tisch says, so the benefits to hotels and other elements of the local travel and leisure industry are minimal.

Still, he says, Javits is well run and is well utilized. The auto show held there each April, for example, has grown in size and stature to become one of the nation's best attended and most important for generating auto industry news and attracting top executives.

The city has been chosen as the site for the Republican National Convention Aug. 30 through Sept. 2, 2004, in Madison Square Garden, which is expected to generate more than $150 million in economic activity with almost 50,000 people attending.

Tourism is big business in the city, but so, traditionally, is business travel. Almost half the passengers using LaGuardia are traveling on business, while just over a fourth of Kennedy's passengers are traveling on expense accounts, according to the agency that runs the two airports, the Port Authority of New York and New Jersey.

NYC & Co. estimated that 35.9 million people would visit the city this year -- for all purposes, down from a recent peak of 36.4 million in 1999 but about 600,000 more than last year. Visitors were forecast to spend $15.5 billion.

Statistics are scant, but Tisch said tourism has recovered more quickly than business travel to the city.

The outlook for business in general is positive nationally. The accounting firm PricewaterhouseCoopers, for example, said in late July that 59 percent of more than 400 company chief executives interviewed were optimistic about business conditions in the next 12 months. Only 41 percent were optimistic when interviewed in the first quarter, the firm said.

At the same time, the survey found the chief executives nervous about prospects for their own businesses, suggesting, said the accounting firm, a wait- and-see attitude that is keeping the belts tightened on new hires and other expenses

"That," Stempler said, referring to economic conditions, "is the 800-pound gorilla that sits in the corner of the room and overrides everything else."

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