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Terror Attacks: Miami Tourism Industry Hurting - 2001-09-22

Last week's terrorist attacks have sent a shock wave through an already-shaky U.S. economy. The tourism industry has been particularly hard hit. Airlines are in disarray after hijacked commercial jets were flown into the World Trade Center in New York and the Pentagon in Washington. In Miami, a city heavily dependent on tourism, business leaders say the local economy is in dire straits.

Miami's beaches usually bustle with activity 24 hours a day year-round. But since the terrorist attacks last week, beaches, clubs and restaurants in Miami have been virtually empty, shunned by vacationers and residents alike. Gerry Kelly runs a popular Miami Beach nightclub that, two weeks ago, was turning people away at the door but now barely attracts a trickle of patrons. "Business is non-existent, particularly in the nightclub industry," he says. "We have learned to take every day as it comes."

And the trend extends well beyond Miami's trendy beaches. Merchants in the city's downtown commercial district are staring at shelves stocked with merchandise that no one is buying. Alex Lacayo is an electronics salesman. "We live off tourism. Downtown Miami lives off tourism, and nobody is coming here," Mr. Lacayo says.

U.S. airlines have been particularly hard hit In the wake of last week's attacks. They are cutting flights by as much as 20 percent and laying off tens of thousands of employees amid plummeting ticket sales. The reduction in air travel is having a devastating ripple effect throughout south Florida's economy, more than 25 percent of which is dependent on the tourism industry. Hotel occupancy rates, which usually exceed 60 percent this time of year, have fallen by as much as 75 percent, leaving tens of thousands of rooms vacant. Businesses ranging from restaurants to car rental agencies to fishing charter outfits report a similar drop-off in customers.

Responding to slumping demand for services, many businesses large and small are cutting their payrolls. This is occurring in Miami and beyond. In Orlando, Walt Disney World has implemented a hiring freeze and trimmed employee work schedules.

Florida Governor Jeb Bush says the economic woes are creating a budget shortfall for the state government that will necessitate painful spending cuts. "It does not take much to figure out that we are going to be going through some trying times," the governor says. "A lot of Floridians are going to suffer."

It is feared the economic downturn could spiral further downward. Reduced demand for goods and services are forcing layoffs, leaving people strapped for cash and unable to make purchases. If the trend continues, economic activity could be further reduced, forcing more layoffs that, in turn, could further reduce economic demand.

Miami Beach Mayor Neisen Kasdin says he expects unemployment will spike sharply in south Florida in coming weeks. "All of this will manifest itself in government when our unemployment lines increase," he says. "So, it is a very clear domino effect [one thing affecting the other], and one that has me very concerned."

If there is any good news to report, it is that September and October are typically somewhat slow months for Florida's tourist sector, even under the best of conditions. Business leaders say, if the region's economy begins to recover by December, then many who find themselves out of work will be quickly re-hired.