Iraq war, Asia virus jolt travel industry

By Gary Gentile
Associated Press

Tourism experts say more and more Americans are having second thoughts about traveling too far from home, a trend expected to worsen if the war drags on.

"We're starting to see long-term overseas flyers kind of pulling in their horns and going for domestic or safer locations," said Stan Morse, owner of Marstan Travel in Millbrook, N.Y. "We think domestic flyers have trended toward driving vacations. It's a cascading effect that has been going on for a while."

Already reeling from the 2001 terrorist attacks and a global economic slump, airlines are facing even tougher times as war dominates the news.

Domestic air travel bookings for the next 60 to 90 days have fallen by 20 percent, while international bookings for the same period are down by 40 percent, according to the Air Transport Association trade group.

The industry's latest jolt is the worldwide scare posed by severe acute respiratory syndrome, the mysterious illness first reported in Asia that has spread to a number of other countries, including the United States. Just this week, for example, the illness prompted Intel Corp. to pull out of shows in China and Taiwan.

"With all the disasters that have befallen us — 9-11, Iraq and now SARS — it's a terrific problem," said Gary Wilson, chairman of Northwest Airlines.

Airlines and hotels are reporting cancellations as tour operators scramble to find alternatives for jittery travelers.

Analysts said the impact on tourism will be devastating if the war drags into summer, typically the busiest travel season.

Bjorn Hanson, lodging industry consultant at PriceWaterhouseCoopers, sampled hotels in major cities recently and found more than 20 percent of reservations for arrival in the upcoming seven days had been canceled.

Some people are taking advantage of bargains and relaxed cancellation policies to ditch costly reservations made months ago.

"The values now are tremendous," said Bob Diener, president of Hotels.com.

Attractions such as the Disney resorts in California and Florida have dropped print and broadcast advertising during the war. California also pulled ads it had been running in eight Western states.

The war also is affecting the travel plans of Canadians, some of whom have canceled overseas trips in favor of sites closer to home. But at Signature Vacations, a tour operator in Toronto, business remains brisk.

"There's something about shoveling three feet of snow that makes people want to sit under a palm tree," a spokeswoman said.