Looking back at tourism in 2001
Advertiser News Services
Spain's travel industry growing
The tourism outlook in Spain is brightening. Travelers are putting aside security concerns and coming to visit Spain, hoteliers said last week, buoying an industry that represents 11 percent of the country's gross domestic product.
Zontur, a trade organization for the lodging industry, said reservations dropped 30 percent in October. Hotel operators said occupation levels have bounced back from these lows and while not growing, are almost back to the previous year's levels.
Among the positive signs for Spain's tourist industry, Americans, who typically travel there for both business and pleasure, are starting to return. Travel along Spain's popular coasts, which saw a decline in the weeks after the attacks, has returned to normal levels.
Luxury hotels in cities, more often used by business travelers, bore the brunt of the initial setback after the attacks. Occupancy at these hotels in Madrid fell 20 percent in September and 17 percent in October, while business travel fell even more, said Mazars, an industry group. Occupancy in Barcelona's luxury sector declined 13 percent in October from the previous year, after a 15 percent decline in September.
Airliner builders' orders shrinking
Airbus SAS and Boeing Co. may see orders fall as much as 60 percent this year as the airline industry suffers its worst decline since World War II, said the top salesman for the European plane maker.
The largest makers of commercial aircraft will probably receive contracts for a total of 250 to 300 planes, down from last year's 660, said Airbus chief commercial officer John Leahy. Orders reached a record of 1,131 aircraft in 2000.
Airlines are expected to lose a total of $11 billion in 2001 on international operations, according to the International Air Transport Association. Most large airlines are operating with 15 percent to 20 percent less seating capacity, leaving little need for new aircraft as travel demand plunged by more than a third.
"Orders for the aircraft industry will hit their trough in 2002, picking up again in 2003," said Leahy. "If economists say that things should pick up in the second half of 2002, you can't have that without air traffic coming back."
Demand for air travel was declining as economies slowed even before the Sept. 11 terrorist attacks. Since then, carriers such as Swissair Group and Sabena SA filed for bankruptcy protection, and the U.S. government agreed to provide $15 billion in cash and loan guarantees to rescue U.S. airlines, which said they would fire 96,000 workers.
Travelocity revenue misses expectation
Travelocity.com Inc., the largest Internet travel seller, last week said fourth-quarter revenue missed its forecast because of slowing airline ticket sales.
The Fort Worth, Texas-based company said fourth-quarter revenue was about $68 million, 9 percent lower than it had forecast. Sales totaled $65 million in the year-ago period.
Revenue was hurt by slower sales of airline tickets during the holiday travel period, the company said. Airlines cut flights and reduced fares, leaving Travelocity.com's transaction revenue 15 to 20 percent below forecasts. In October, Travelocity.com said it would cut 320 positions, or 19 percent of its work force, to pare costs.
Travelocity.com also said it reached a marketing agreement with Continental Airlines, the fifth-largest U.S. airline, to undertake joint marketing campaigns.
Airport expansions may continue
U.S. aviation regulators said last week they won't scale back plans to build runways and add equipment to handle a 30 percent increase in flights by 2010 after the Sept. 11 attacks reduced air travel demand.
"Fundamentally the plan remains pretty much the same," Federal Aviation administrator Jane Garvey said. "Demand will come back, and we need to be prepared."
The agency in June unveiled a plan that proposed $11.5 billion in U.S. government spending for new runways at 14 of the biggest 31 U.S. airports, satellite technology to let planes fly closer together over oceans and more flexible route patterns so planes arrive at destinations more quickly.
Airplane traffic is still down about 15 percent from this time last year, back to late 1999 levels, the FAA said. That lower demand helped cut delays 63 percent in November, and passenger demand will recover in 18 to 24 months, Garvey said.
Singapore Airlines may restore routes
Singapore Airlines Ltd., Asia's third-biggest carrier by sales, told investors it may reverse some planned flight cuts to the U.S. and Japan, as air travel demand shows signs of recovery.
The airline told analysts and investors last month it filled more than 70 percent of its seats for flights exiting Singapore in the first half of December, bolstered by holiday travel.
"SIA thinks that it may not have to cut capacity by as much as it originally planned," wrote Peggy Mak, an analyst with UOB-Kay Hian Research, in a report after the briefing. "A review will be made in February."
The airline said in November it would reduce seat capacity on flights to the U.S. by 20 percent and to Japan by 13 percent from Jan. 13 to April 30.
The airline last week said it filled 66.9 percent of available seats in November, a 9.1 percentage point decline from a year earlier. That is up from October's 63.2 percent.
Other airlines have also reported similar signs of traffic picking up in December, and their shares have rallied. Korean Air Co., the country's largest carrier, and China Airlines, Taiwan's largest carrier, both said they filled more seats in the first 20 days of December than for the whole of November.
