Slow recovery for airport

But three years later, the San Francisco International Airport is recovering and slowly getting to its feet.

Travelers are finally accustomed to the new security rules and are comfortable flying again. In June, bankrupt United Airlines saw heavy passenger loads, said Bruce Carlton, general manager of DoubleTree Hotel and president of the Burlingame Chamber of Commerce.

That is good news for both the airport and hotels that depend on SFO for its bread and butter - airline travelers. The new hotel business is also helping to fill depleted city coffers.

"The whole hospitality industry is coming back steadily, but not at a fast pace," said Anne LeClaire, president of the San Mateo County Convention and Visitors Bureau. "We have high hopes for 2005."

Hotel occupancy steadily rose since August of last year, bringing additional revenue to cities like Burlingame and Millbrae that have a high concentration of hotels and businesses that rely on those customers, LeClaire said.

To date, hotel occupancy in the San Francisco market is up nearly 10 percent from last year. The past two years, hotel occupancy declined to 57 percent, according to Smith Travel Research.

Hotels aren't popping the champagne just yet. The growing occupancy has been met with declining room rates. In this market, the average room rate in 2001 was $116, this year $79 is the average running rate, according to Smith Travel Research. The increased occupancy rate is directly correlated with a rise in business travel, officials said.

Business travelers now know the drill. At the airport, security measures that once seemed scary and time consuming are becoming routine. People are learning to pack differently, arrive earlier and have identification available, said SFO spokesman Mike McCarron.

The airport is safer too. The newly-formed Transportation Security Administration requires all checked baggage to be screened for explosives. On Sept. 11, 2001, only 5 percent of bags met this requirement. By 2002, it jumped to 100 percent.

The TSA keeps no hard numbers on what is screened or discovered at SFO but explosives are not uncommon, said spokesman Nico Melendez.

"We've actually found, during the course of the last couple years, that soldiers overseas as they return from the war bring souvenirs like grenades and put them in their bags," Melendez said.

Thousands of air marshals continue to be trained. On Sept. 11, 2001, less than 3,000 federal air marshals existed, Melendez said. Pilots are also continually trained to carry weapons in cockpits.

"It's a very effective tool on planes," Melendez said.

Melendez won't disclose specific numbers of TSA employees at SFO but said there is a "strong presence."

"There are several different layers of security: passenger screening, marshals, canines, officers, increased patrols of perimeters. But one of the most important aspects is that passengers are more alert and more vigilant. They are very instrumental," he said.

Increased airport security is boosting travel. The slow growth and optimistic news at SFO is slowly making its way to cities hard hit by the decline in hotel occupancy.

Faced with a $2 million budget shortfall formed after the Sept. 11 attacks, Millbrae was facing financial disaster before voters approved a $1.1 million assessment tax earlier this summer.

The bailout only satisfies the city's immediate problem. Both Millbrae and Burlingame are still suffering from years of declining sales tax and can only now call their outlook "cautiously optimistic."

"For the first time since 9/11, we've had an improvement in our revenues," said Burlingame City Manager Jim Nantell. "It's still scary, but clearly for us there are solid signs that the decline is over."

Burlingame revenue for the last fiscal year increased by 4 percent. The majority of growth happened during the last quarter that ended in June and was strong enough to possibly increase the growth to 5 percent. The city won't know for sure until an official audit is finished in November, Nantell said. The city lost $7 million in hotel tax revenue and it is looking for a solid 10 percent growth to make up for lost money. Burlingame is still planning $1 million to $2 million in upcoming cuts, Nantell said.

- Michelle Durand contributed to this report.