The tourists chatting in multiple languages in the piazzas, bars and shops of Rome belie a more somber mood at the ancient city’s hotels.

Luigi Rinaldi, concierge of the Hotel de la Minerve next to the Pantheon, said American tourists have disappeared, although demand among German, Spanish and Russian tourists is solid.

The hotel is trying to lure guests by keeping prices steady – even during the high season at Christmas and New Year’s – and by adding weekend promotions.

“But we are a five-star hotel,” Rinaldi said. “We can’t be too daring.”

Rome is among many major cities around the world seeing dramatic declines in hotel occupancy this fall as consumers and businesses cut travel spending: Occupancy in Rome fell 17.5 percent in October compared with the same month last year.

Global air travel also has fallen off as the financial crisis that has hit economies around the world takes its toll. The International Air Transport Association says international passenger traffic declined 1.3 percent in October compared with 2007, following a 2.9 percent drop in September.

According to the IATA, the number of passengers traveling on premium airline tickets – who tend to be business travelers – dropped 8 percent in September, reflecting the severity of the global financial crisis and a slump in the confidence of manufacturers in the U.S., Japan and Europe. Premium traffic slumped in North Atlantic markets, between the U.S. and Asia across the Pacific and within the Middle East. That’s a bad sign because business travel helps drive airline profitability.

In Rome, business is down sharply at the five-star Grand Hotel Plaza, one of the city’s most prestigious hotels just a few steps from the Spanish Steps, according to sales manager Paola Ucciarello.

Other cities are being hit hard, as well.

STR Global Managing Director James Chappell said he was surprised by the extent of the downturn in the United Kingdom, where London’s five-star hotel market has been hit particularly hard because guests are trading down to less pricey accommodations.

September and October also brought hotel business declines in Hong Kong, Los Angeles, Madrid, New York, Paris, Toronto and Sydney.

Hotel occupancy across Europe fell 4.9 percent in September from a year ago, and 6.3 percent in October, according to STR. In Italy, revenue per available room – a key gauge of a hotelier’s performance – has been on the wane since May and plummeted about 20 percent in October. In London, hotel occupancy fell 5.2 percent in September and 4.2 percent in October compared with the same months last year, according to STR.

In the hotel industry, the current downturn is exacerbated by increases in supply over the past several years from a flurry of hotel development that continued into 2008. In Beijing, for instance, occupancy dropped 20 percent in October compared with 2007, which Chappell largely attributed to an excess of rooms at hotels built for the Olympics.

President and Chief Executive Ted Teng of The Leading Hotels of the World Ltd. – an organization that represents more than 450 luxury hotels, resorts and spas – said member hotels in financial centers like London, New York and Frankfurt are being hit hardest. The organization’s hotels in emerging markets such as Moscow and major cities in Latin America continue to experience strong demand, he said.

The hotel industry is anticipating a dismal fourth quarter and a very uncertain 2009.

“Hoteliers are going to be much more nervous than they were previously,” Chappell said.To lure guests without slashing room rates, many are offering freebies and special packages, including perks like free meals, upgrades and parking.Standard & Poor’s analyst Philip Baggaley said he couldn’t be sure when the global travel slowdown will reverse itself.

“These days it’s hard to predict next week much less two years in advance,” Baggaley said. “So, clearly any predictions about a travel turnaround are highly uncertain at this point.”

Jobseekers look for employment opportunities and work on resumes at WorkSource California, a program jointly funded by the state, city and county of Los Angeles, at their Mid-Wilshire office in Los Angeles Friday, Nov. 7, 2008. Photo by THE ASSOCIATED PRESS