The September 11th attack
World tourism industry braces for worse

Advertiser Staff and News Services

Grim reports are coming in from around the world as Hawai'i joins a long list of tourism destinations whose economies have been reeling since the Sept. 11 terrorist attacks on New York and Washington. The attacks have frightened travelers, spurred 100,000 layoffs in the airline industry and related sectors, and threaten to bankrupt more businesses daily.

The streets of Waikiki usually are crowded with visitors. This was the Waikiki street scene Monday. Richard Ambo • The Honolulu Advertiser

"There is a veil of uncertainty hanging over their heads and when visitors feel that way, they change their travel plans," said Rob Powers, a spokesman for the Las Vegas Convention and Visitors Authority.

In the days since the attacks, Las Vegas received nearly 200 cancellations for meetings and conventions scheduled over the next three months. The cancellations mean 45,000 fewer visitors and a $55 million loss, Powers said.

Bookings at the three leading Internet travel services — Travelocity.com Inc., Expedia Inc. and Priceline.com Inc. — tumbled by as much as 70 percent in the aftermath, and some say the industry's best hope now is for postponements rather than cancellations.

Japan's largest tour agency, Japan Travel Bureau, said 9,500 people had already called off trips to the United States and Canada, causing the company to lose $13 million. Australian officials are projecting tourism-related losses as high as $2.5 billion in the next 12 months.

Florida's public-private tourist promotion concern suspended print and broadcast advertising in the United States and Canada until further notice. The Orlando-Orange County convention and visitors bureau suspended its national cable TV schedule of spot ads. The Greater Fort Lauderdale convention and visitors bureau said the region lost about $50 million worth of business, including a conference with 2,000 last week.

In Miami, officials said they expect hotel occupancies to climb only as high as 35 percent. Normally, area hotels would expect the figure to be 70 percent. The Las Vegas convention and visitors authority pulled its overseas advertising campaign and delayed the start of its national campaign until late October.

In Hawai'i, hotel occupancy was — in some cases — close to the lowest in memory.

"Hotels around the Islands are hesitant to express their actual current occupancies, but reliable PKF sources have indicated that many hotels in Waikiki are experiencing occupancies in the teens and 20s," PKF-Hawai'i's chairman and chief executive, Ernie Watari, said last week.

And those numbers come as the state industry had started to already see a slowdown. Statewide occupancy for the first eight months of this year was 77.2 percent, 2.9 percent lower than the same eight-month period last year.

Gov. Ben Cayetano took the first steps toward helping the state's biggest industry last week when he called on business leaders to design a plan to address the immediate problems confronting the $11 billion tourism industry, which accounts for more than 25 percent of the state's economy.

The governor also advocated releasing up to $20 million worth of state and private money for a comprehensive tourism marketing plan and said he will lead delegations to Japan and the West Coast to encourage people to visit Hawai'i. He immediately waived landing fees for airlines, instituted tuition waivers for those who lose their jobs, and called for a special session of the Legislature to consider an economic stimulus package.

The plan could be ready as early as Oct. 1, but it is unclear when launching these efforts would be appropriate.

Similar scenarios played out in tourism destinations around the country last week, as governors met with business leaders and called for special legislative sessions.

In Florida, where the $50 billion tourism industry accounts for 20 percent of the economy, Gov. Jeb Bush said he would lobby for the industry in Washington and with public service announcements, and would match a certain portion of a $2 million emergency fund tourism executives plan to use.

He also suggested he would call a special session of the legislature to reexamine the state's budget.

The governor wavered, however, on whether or not the state's tourism marketing agency Visit Florida would receive substantially more than its annual $65 million.

"That sort of thing is being formulated," said David Bishop, the governor's tourism spokesman. "It's going to take a period of reflection to see what the implications will be. He will ask the legislature not to cut tourism. But for increased funding it's hard to tell right now."

A key factor on whether travelers will take to the skies anytime soon is whether the United States is attacked again, said John Keeling, a hospitality industry consultant with PKF Consulting in Houston.

"If we can keep the fighting off our shores, confidence will return," he said.