Posted on: Sunday, October 28, 2001

The September 11 attack | Coping with the aftermath
World labor group sets tourism loss at 9 million jobs

By Jonathan Fowler
Associated Press

GENEVA — Nearly 9 million people in the slumping global tourism industry could lose their jobs in the wake of the Sept. 11 terrorist attacks, the United Nations labor agency said last week.

In an 18-page report, the International Labor Organization said falling tourist numbers could mean the loss of 8.8 million jobs in the sector, which employs around 207 million people worldwide.

The figure includes 1.1 million job losses in the United States and 1.2 million in the European Union, but the survey said U.S. job cuts could rise as high as 3.8 million, "depending on how travelers react in the coming months."

The estimate was based on information provided by the industry and an analysis of the effect of previous world crises such as the 1991 Persian Gulf War.

In the "best-case scenario," meaning no more terrorist attacks and a quick end to the U.S.-led bombing campaign in Afghanistan, the industry could halt the decline, the organization said. But if the war in Afghanistan escalates or terrorists strike again, the sector will suffer, the agency said.

The most vulnerable employees include part-time hotel workers, travel agents, tour guides and retail staff. But their employers, relying on strong and regular cash flows, are also facing a "struggle for their very survival," the agency said.

The report said the travel and tourism sector was already in decline before the attacks because of the sluggish global economy. "To this economic environment has been added uncertainty — the traveler's instinct is now to stay close to home," it said.

Two of the biggest U.S. hotel and travel concerns, Marriott Corp. and the Carlson Cos., have calculated that business fell as much as 40 percent in the month after the attack, which threw the airline industry into chaos.

British Airways said trans-Atlantic traffic had dropped 30 percent by mid-October, while the loss of business drove ailing Swissair out of business.

The report said countries that rely heavily on U.S. tourists, such as Canada, Mexico and Britain, are particularly exposed. But the United States is also being hit as foreign visitors stay away.

Peter Keller, chairman of the transport committee and head of Switzerland's tourism service, said the attacks have led to a decline of more than a third in air travel, particularly on trans-Atlantic routes, forcing airlines to ground aircraft, eliminate routes and cut as many as 200,000 jobs. Carriers worldwide may face a combined full-year loss of as much as $12 billion, according to IATA.

Keller said that in general European tourism has been affected in markets heavily frequented by U.S. travelers. Eighty-eight percent of European tourism is intraregional, he said.

In Japan there has been a "major contraction" of outbound tourism, with mainly North American routes affected.

Keller had no specifics on the differences between the impact on business travel compared with leisure travel. "This is a sector that's very price sensitive and very sensitive to psychological factors," he said, but lower prices have not restored bookings.