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Travel and Tourism Industries Suffer Major Setbacks - 2001-12-30


The travel and tourism industries in the United States and around the world suffered major setbacks in the past year. The September 11 terrorist attack and the economic recession have shaken many Americans' love affair with travel.

"We are a traveling nation. We like to get out. We like to see things. We like to experience new adventures," says Martin Hintz, the president of the American Society of Travel Writers. The group represents journalists, editors, and authors who write about the travel and tourism industry, which Mr. Hintz says is one of the largest industries in the world.

"When you start considering 'what is travel,' it affects a whole group of people from top to bottom in many different ways you might not think about," he says. "Of course, everybody immediately thinks of airlines, cruises, trains, and motor coaches [buses] that kind of transportation system, but then it filters off to all these side jobs, too: the fellows who work in the cafeteria at the Amtrak [train] station or the newspaper seller. It's got far reaching fingers. So when something happens, as it did in September, then that filters down and affects people in many, many places."

The U.S. Bureau of Transportation Statistics reports that the nation's airlines suffered a major loss in revenue because of the September 11th terrorist attacks that, for example, passenger revenue dropped from 62.6 million to 34.3 million from August to September. Douglas Frechtling is a U-S official with the World Tourism Organization, or WTO, which is a United Nations affiliate that helps countries develop their economies through tourism. Mr. Frechtling describes a kind of domino effect caused by the events of September 11 on the 139 member nations of the WTO. "Underdeveloped countries, or lesser developed countries, they're worried that visitor volume has dropped and is not contributing to their economies the way they expected," he says. "There's substantial unemployment, loss of government revenue, probably loss of exchange that they need for international trade. If they're a developed, or highly-developed, economy, they're a little less concerned about that, but they're interested in making sure that tourism does not become a drag on their economy. In other words, that the decline in tourism does not adversely contribute to the economic downturn that most developed countries are experiencing now."

Douglas Frechtling of the World Tourism Organization says that America's airlines had already been struggling because of an economic recession that started in the spring. "This is the first downturn we've had in about ten years," he says. "And in the last one: the same thing happened. First of all, it starts by depressing business travel. Companies cut back on travel because it's one of their most obvious ways of reducing costs without reducing profitability, or so they think. So with the decline in business travel, comes a downturn in receipts of airlines and hotels, for the most part. But as the business recession continues, it affects individuals and their budgets for leisure travel. So families reduce the level of travel they do, primarily, first, by traveling less by air and traveling by cheaper means. If the recession continues over time, they reduce travel altogether their leisure travel."

Mr. Frechtling adds that the nation's airlines are "in a difficult situation." "Air transportation is not cheap," he says. "It's expensive to run most airlines. Southwest has got a business model that makes it about as cheap as possible and they've done very well. But all the other national carriers, so- called major carriers, have 'high cost structures' [expenses] because of union contracts, the cost of fuel and maintenance and so forth. So there's a limit on how much they can discount their flights. The second problem, of course, is increased airport security, which makes it difficult for people just to get through the airport and onto the plane. This dissuades people from traveling by air, particularly people on tight schedules."

For now, anyway, many Americans have decided to take the train. A spokeswoman for Amtrak, the nation's largest rail service, says preliminary figures show 23.5 million passengers rode Amtrak in 2001, a ridership increase of more than 4 percent. Revenue increased by 8 percent to nearly $2 billion. "Amtrak business was soft [before 9/11], but it picked up because many business and even leisure travelers feel much safer traveling by Amtrak, particularly in the northeast [U.S.] corridor, where it is the largest single carrier of passengers. Now Amtrak is just completely jammed. Its cars are completely filled," says Mr. Frechtling.

Experts say the revival of air travel is crucial to the travel and tourism industry in the coming year. But while travel companies offer enticingly inexpensive deals to destinations like Paris and the Caribbean, it's expected that many Americans will take their time before deciding to deal with airport security hassles and their own fears about air safety.

Part of VOA's Year End Series for 2001

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