Tourism Still at Cruising Altitude. Uncertain dollar, terrorist threats don't deter travelers, but they're choosier
THE United States travel industry expects another good year in 1989 - a cheering outlook for the thousands of agencies, carriers, suppliers, and other companies that make up the multibillion-dollar industry. That expectation comes despite a broad range of concerns, including uncertainties about the direction of the US dollar, terrorist threats, and a possible economic slowdown later in the year, which could make some people wary about spending for travel.
Still, the tourism business looks like it will post solid gains again this year, thanks in part to innovative tour packages offered by the industry. At the same time, travelers are proving to be very selective, industry officials say:
More of them are opting for boat cruises instead of packaged air travel abroad.
Foreign tourists, aided by a sagging dollar that has made their currencies go further in the US, are coming to America in greater numbers.
US air carriers are holding their own against overseas carriers. But at the same time, there is evidence that one US carrier, Pan American World Airways, may have been hurt by the recent terrorist incident against one of its airliners in Europe.
``We are hearing that some corporations are asking their employees to fly non-US flag carriers to Europe,'' says Doran Jacobs, vice-president of marketing for Central Holiday Tours, in Jersey City, N.J. Central Holiday says it is the largest tour operator to Italy in the US.
There is evidence that tourists in general may be specifically choosing non-US carriers during this period of rising concerns about terrorist threats abroad, Mr. Jacobs says.
Pan Am, for its part, denies that its bookings have been adversely affected by the downing of Flight 103 in late December. ``Our bookings are holding. There has been no significant effect'' because of the bombing, says Pamela Hanlon, a Pan Am spokeswoman.
``We see no impact on Pan American,'' says Rose Ann Tortora, an airline analyst with the Drexel Burnham Lambert Group here. ``There's just no indication that they've been affected. You'd see a major `no show' if that were the case, and that just isn't occurring.'' Further, says Ms. Tortora, this is the off-season period for US carriers flying to Europe, which means that major bookings will not be registered until later this spring. Ms. Tortora also notes that Pan Am and other US carriers are sharply increasing their security on international flights.
Whatever, tour operators are already gearing up their promotions for Europe later this year.
AND a number of tour programs are being added for Asia, which tends to be less seasonally linked than European travel, given the warmer climates in that region.
``We're anticipating a very good year,'' says Mr. Jacobs, of Central Holiday Travels. ``Not as phenomenal as 1985, which was outstanding. That year remains the standard for the industry. 1986 was somewhat lower, because of terrorist concerns. 1987 was another very good year. 1988 was good. And we now believe that 1988 will be even better.''
Central Holiday, like many travel agencies, is experimenting with new tour packages to lure the overseas customer. For example, it is offering a package to the Mediterranean that allows the customer to travel from Rome to Florence, Venice, Genoa, Milan, and then to the Mediterranean for under $2,600 a person, excluding air fare to Italy.
``Our cruise business is going up tremendously,'' says Frederick Mayer, of Exprinter Cruises here. Part of the reason, he says, is that general air travel to Europe is not quite as popular as in the past, given currency uncertainties, as well as terrorism. But cruises, Mr. Mayer says, are convenient, safe, and specific - in terms of a set and most often prepaid agenda. Mayer sees the cruise industry growing at about 10 percent a year, with an increase over 1988 likely this year.
Exprinter Cruises is also offering a wide range of low-to-moderate cost tours. There is, for instance, a relatively inexpensive seven-day trip on the Danube Princess, a cruise liner that travels along the Danube River, touching such cities as Vienna and Budapest.
Mayer does not believe the downing of Pan Am flight 103 will adversely inhibit US tourism abroad. If it does have a limiting impact, he suggests, it will be hard to measure. ``We Americans do not have a good sense of geography. If something happens in Afghanistan, for example, we don't go to Spain,'' Mayer says. But the only real travel market negatively affected by terrorist incidents, he suggests, is the larger ``mass'' market - where large numbers of tourists travel abroad because of momentary considerations such as extremely favorable exchange rates. Most sophisticated travelers, he believes, are not discouraged by terrorism, particularly tourists who take cruises.
It is the airlines that face the greatest uncertainties now, travel experts say. ``We're in the weakest part of the year for the industry as a whole,'' says Robert McAdoo, an airline analyst with Oppenheimer & Company in Seattle. ``Traffic has been depressed on some routes because of seasonal factors, as well as the [relatively] lower dollar,'' which puts Americans at a disadvantage abroad in terms of buying power.
But only a few major US carriers fly international routes, Mr. McAdoo says, in a sense insulating the industry from concerns about terrorism. He currently recommends the stocks of United, Delta, and American, which have routes outside the US.