News for the Hospitality Executive
|By Jim Finkle, The Orange County Register, Calif.
Knight Ridder/Tribune Business News
Mar. 13, 2004 - While Thursday's bombing in Madrid pointed out weaknesses in the security on Europe's rail systems, it also showed that the tourism industry remains vulnerable as it recovers from a three-year slump.
"We had already thought travel to Europe would be a little soft because of the weakness of the U.S. dollar. What happened in Spain pointed out the vulnerability," said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. "Definitely there will be people reassessing travel plans."
Some travel agents say they expect to book fewer trips to Europe this summer as a direct result of the bombing, especially given that the dollar is so weak compared with most European currencies.
"When I heard what happened, I thought. 'There goes our Europe business,'" said Marta Chavez, manager of Bon Journey Travel in Santa Ana. "It's been Hawaii for the last three years and they'll be going to Hawaii again this summer."
Before the Sept. 11, 2001, attacks, about 60 percent of Bon Journey's summer vacation business was to Europe. Now it's less than 40 percent, she said.
Janine Ortell, who owns Travel Flair in Aliso Viejo, didn't see any drop in business on Friday. She expects her clients will go ahead with trips they've been planning to Europe.
"I don't think we all need to get nervous and paranoid at the moment. Security is high," she said. "You buy travel insurance, you protect yourself. But it doesn't stop you from living your life."
Since the Sept. 11 attacks, virtually all of Ortell's clients buy travel insurance that protects them from a variety of potential problems, including trip cancellations and other issues that could result from terrorist attacks.
Rates vary from about $19 to $1,000, depending on the age of the customer and the cost of the trip. An $11,000 trip that she recently booked cost $630 to insure.
While the investigation into the Madrid bombing is ongoing, a letter purportedly from a group linked to al-Qaida said that the group will target the United States. Depending on what intelligence sources say about the authenticity of that letter, it could hurt travel to the United States, Kyser said.
Tourism is a key industry for the United States and Orange County, where the No. 1 private employer is Disney, with some 21,000 workers.
The Travel Industry Association estimates that travel spending by domestic and international visitors will reach $568 billion this year. While that's up from last year, it's still down about 5 percent from a record $594 billion in 2000.
Security will likely play an important role in determining the destinations that tourists choose to visit.
Most travelers rank safety as a primary factor when choosing a vacation destination, hotel, or even a theme park, according to Dave Wiggins, president of the Southern California Safety & Security Association.
The Los Angeles Economic Development Corp. had been hoping Southern California's tourism would pick up this summer, buoyed by the opening of major new rides at four big theme parks: The Twilight Zone Tower of Terror at Disney's California Adventure; Universal Studios Hollywood's highly touted Revenge of the Mummy ride; The Coastersaurus at Legoland; and Journey to Atlantis at SeaWorld in San Diego.
When families are deciding where to travel, the allure of those rides may be offset by worries about terrorism, Kyser said.
"We know that LAX has been identified as a potential target," he said. "There were threats against motion-picture studios."
Still, the seasonal peak for tourism is several months away, and it's hard to predict how all these factors will play out.
"We just have to see if anything else happens," Kyser said.
Michelle Himmelberg contributed to this report
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(c) 2004, The Orange County Register, Calif. Distributed by Knight Ridder/Tribune Business News. DIS, BUD, V,