Inhospitable to Hospitality Industry

Well, here we go again. Government intervention begets government intervention. And around and around we go. Last week, I posted a blog here that conveyed the expected ripple effects of increasing taxes on small businesses, not the least of which is reduced revenues for other critical businesses crippled in this current economy, including the catering and hospitality industries (i.e. restaurants, hotels, etc.). The more money you take away from people who could have and would have spent it, the less they will have to spend. This seems so obvious, and like I've said many times before, this is simple math. I'm not quite sure how I can help stimulate the economy if my government (through its words and actions) encourages me to cook for myself, do my own ironing, etc. instead of dining out every so often or utilizing a dry cleaners. Do they not realize that reducing my dispensable income translates into less revenues for the businesses I use? Do they not realize that less revenues for these businesses translates to unemployment for workers in those industries? Unfortunately, the answer is no. They don't realize it.

We all have heard by now the backlash engineered by Congressman Barney Frank (D - Massachusetts) when he criticized what seemed like every financial institution for spending money on marketing (e.g. stadium naming rights), client satifaction (e.g. hosting clients at golf events) and employee retention (e.g. bonuses to the highest performers). Subsequently, we have seen a dramatic (and I mean jaw-dropping dramatic) decline in season ticket renewals, hosted quarterly meetings and sales-incentive trips. And guess what has happened, hotel leaders have petitioned to Congress (Link to Article on Hospitality Industry backlash.) to "ease up" on the rhetoric. Why, you ask? Because their industry is being crippled by the REACTION to Barney Frank's REACTION!!! Companies are spending less out of fear of perception issues.

Side note and perhaps a future blog topic: the best employees are not being adequately rewarded by their employers, which means they are now less-incented to be the best.

So what will our leaders do to resolve this? Perhaps a "bailout" for the hospitality industry? Print some more money, sell some bonds to China to keep the hotel business afloat? Maybe we could mail out vouchers to everyone making less than $30,000 a year for a one-night stay at the hotel of their choice, and our government can reimburse the hotels with their freshly printed money? Mark my words, there will be a government reaction to this problem. It might be embedded in some future "stimulus package" and may not get the publicity of the auto bailout. But it will happen.

My Dad and I think our ancestors in our family tree may have had a candle business. But when electricity came along, the candle industry was crippled. Perhaps we can apply for a retroactive bailout. On my Mom's side, we think that our ancestors ran a buggy business. When Henry Ford, that evil entrepreneur who didn't like the status quo, invented an automobile, our buggy business went under. Another retroactive bailout for me.

When does this end? When will we elect leaders who actually read our Constitution? When will we elect leaders who actually adhere to our Constitution? Perhaps we can host a convention at a resort hotel to discuss the merits of the principles of our founding fathers' view of free enterprise and free markets. Ugh. We can't do that just yet. We're not sure if the hotel industry will survive long enough to host our little delegation. Perhaps they need a bailout.

Will someone please invite me to a tea party? In Boston, perhaps?