U.S. travel industry grapples with weak demand

By Kyle Peterson and Deena Beasley

CHICAGO/LOS ANGELES (Reuters) - More struggles lie ahead for the tattered U.S. travel industry as hotels, casinos, airlines and travel agencies fight the tide of economic recession and flagging travel demand.

It's a tough battle for the companies. Job losses, obliterated savings and falling home prices have made potential leisure travelers reconsider vacations. Business travel has taken a hit, too, as companies trim costs or shut down.

Executives from travel companies like Las Vegas Sands Corp (LVS.N), Marriott International Inc (MAR.N) and UAL Corp's (UAUA.O) United Airlines will speak next week on challenges facing their businesses at the Reuters Travel and Leisure Summit in New York.

"For anything remotely touching the travel industry it's definitely a challenging time," said Warren Miller, a Morningstar equity analyst who covers travel and leisure companies.

"I don't see a very quick turnaround in demand," he said. "In the next couple of quarters, I think things can and will get worse."

HOTELS FACE VACANCIES, CANCELLATIONS

Hotels and resorts, already struggling to keep rooms filled as recession-wary consumers and companies cut spending, are now in a political battle to keep bailed-out banks and others from canceling business meetings.

Public sentiment toward luxury perks soured in October after insurer AIG flew top brokers and executives to a Southern California resort at a cost of $440,000 shortly after it received an $85 billion government bailout.