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[Fwd: NYTimes.com Article: Tourists Think Twice About Travel to Europe During War]

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  • Alan A. Lew
    ... Subject: NYTimes.com Article: Tourists Think Twice About Travel to Europe During War Date: Wed, 02 Apr 2003 09:39:58 -0500 (EST) Tourists Think Twice About
    Message 1 of 1 , Apr 2, 2003
      -------- Original Message --------
      Subject: NYTimes.com Article: Tourists Think Twice About Travel to
      Europe During War
      Date: Wed, 02 Apr 2003 09:39:58 -0500 (EST)






      Tourists Think Twice About Travel to Europe During War

      April 2, 2003
      By JOHN TAGLIABUE

      NICE, France, March 28 - Akim Djabri knows it is springtime
      when the Americans come.

      "In April, May, June, traditionally it's the Americans and
      Canadians," he said, sipping coffee in the upstairs cafe of
      his slender 28-room hotel near the center of this
      Mediterranean resort.

      This year, spring may be later than usual. Already, several
      cancellations have arrived from the United States. One, he
      said, began, "In view of the war . . ."

      The situation of Mr. Djabri, 38, who sold his gas station
      in Algeria seven years ago, brought his family to Nice and
      bought the Hotel du Centre, is emblematic of European
      tourism on the whole.

      Last year was "magnifique," he said, with visitors to Nice
      on the rise, even if they spent less in restaurants and on
      souvenirs. Now, he said, all bets are off.

      Dominique Bourdais of HVS International Hotel Consultants
      said: "Travel had rebounded in the past year, and now it's
      going to level down. The question with the war is, Will it
      be short-lived?"

      For Europe, with its stagnant economies and a need to
      replace traditional manufacturing with services, tourism is
      crucial. Yet wars frighten travelers. If the Iraq war ends
      soon, which few now expect, American animosity toward
      France and Germany, opponents of the war, may continue to
      curtail travel.

      Economists at Oxford Economic Forecasting, a research
      group, recently estimated that a prolonged war could cost
      the European Union's 15 member countries as many as 260,000
      jobs, and slice economic output by as much as 0.7 percent.
      That could drive some regions into recession.

      In France, the world's leading tourist destination, travel
      and tourism account for more than $190 billion of business
      directly and indirectly, or almost 12 percent of gross
      domestic product, they estimated. In Italy, Spain and
      Britain, the industry does not lag far behind.

      Moreover, as global economies have slumped, the battle
      among cities organizing trade fairs and conventions has
      intensified. Business travelers who frequent them are
      sought-after prizes, far outspending tourists.

      In London, one foreign visitor in four now comes for
      business, said Louise Wood of the London Convention Bureau,
      yet these travelers generate a third of total tourist
      revenue. In France, they are 10 percent of the total, yet
      bring 35 percent of revenue. "It's definitely an industry
      with the wind aft," said Emmanuel Dupart, of
      France-Congrès, an industry association.

      The Côte d'Azur, with Nice at its heart, provides an
      example. A traditional beach resort area, the region now
      lures trade fairs and conventions to fill hotels in the
      off-season. Convention centers here and in Cannes, the site
      of the annual film festival, are being expanded and
      modernized; in nearby Monaco, a big new one, the Grimaldi
      Forum, just opened.

      "There are few cancellations," said Mr. Dupart, whose
      organization represents 50 cities. "What we're seeing is a
      wait-and-see attitude. Rather than canceling orders,
      they're postponing them."

      That is scant consolation for hoteliers and restaurateurs.
      And recent weeks have resounded with a cry of pain from the
      industry.

      In Germany, the hotel federation announced that the
      industry might have to cut as many as 10,000 jobs. In Rome,
      Florence and Venice, ordinarily throbbing in springtime
      with art lovers and business travelers, hotel bookings are
      down by half so far this year compared with last year,
      according to Federalberghi, the largest Italian hotel
      federation.

      In Paris, occupancy rates at luxury hotels dropped
      significantly last month, the industry association said.
      The posh Crillon, on the broad Place de la Concorde, was
      deserted, a victim of the huge barricades erected to shield
      the American Embassy nearby. Less expensive hotels were
      down by 10 percent.

      Officials in Paris attributed the drop mainly to the
      absence of Americans, who accounted for 19 percent of all
      foreign visitors to Paris last year - the largest foreign
      contingent. The pain is deep, since Americans spend more -
      an average 328 euros ($358) a trip, compared with 133 euros
      by British tourists, and 78 euros for Germans. (Only the
      Japanese, at 652 euros, spend more.)

      Tour organizers are also hurting. In Germany, TUI, the
      world leader, recently announced a $287 million
      cost-cutting program for next year, and the possible loss
      of 2,000 jobs, more than double the $122 million of cuts it
      plans this year.

      European airlines are suffering, though they are not nearly
      so close to the edge as rivals in the United States like
      American Airlines. Europe's biggest carriers, including
      British Airways, Lufthansa and Air France, have all
      announced capacity cuts. Swiss, the airline that arose last
      year out of the ashes of Swissair, said recently that it
      was unable to operate profitably and would cut investment
      in new aircraft by 1 billion Swiss francs ($739,000).

      Still, some experts say it is too early to say how lasting
      or deep the pain will be.

      Some business travelers must stay aloft, or risk crippling
      their business.

      "My only concern was, if something happened, I might have
      difficulty getting back home," said Bruce Frigeri, an
      executive from Parsippany, N.J., who visited a trade fair
      in France recently. In September 2001, Mr. Frigeri was in
      Toronto on business but left on Sept. 10; some associates
      stayed and were stranded for days. "That was my worry," he
      said.

      The war is battering hotel chains just as the busy
      springtime sets in, "when they build up cash reserves after
      a slower winter season," wrote Eun Jee Park of Moody's
      Investors Service in a recent note to clients. Yet slower
      hotel construction, which is expected to rise 1.5 percent
      this year, down from almost 2 percent in 2002, would
      assuage the pain, Moody's said.

      Then, too, many travelers will not cancel vacations, but
      simply go elsewhere. Travel agencies across Europe reported
      shifts from Middle Eastern and North African trips to the
      Caribbean and the United States, where, thanks to the weak
      dollar, travel is cheap for Europeans. Spur-of-the-moment
      services like lastminute.com, the British booking agency,
      are booming.

      Francesco Frangialli, the secretary general of the World
      Tourism Organization in Madrid, remains optimistic. Sept.
      11, he wrote in a recent letter to member states, provoked
      "the most serious crisis in the history of world tourism,"
      yet the industry rebounded. In 2001, tourist arrivals fell
      globally by 0.5 percent, he noted, yet they rose 3 percent
      last year, to 715 million, despite a sour world economy.

      Adjusting to crises accelerates shifts in consumer habits,
      Mr. Frangialli wrote, and encourages the creation of new
      operators, like low-cost airlines. "The need to travel,
      whether for business or leisure, is too deeply ingrained in
      our societies to be easily effaced," he said.

      In the near term, of course, many European experts expect
      fear of violence and a threat of terrorism to have an
      impact. "When the whiff of cordite is in the air, the
      Americans tend to stay home," said Steve Martin, of
      Conference Advice and Management, a British company
      specializing in business meetings.

      Harder to gauge is just how lasting an effect American
      anger at Germany and France will have on tourism.

      Patrick Vece, the director of research at the Tourism
      Observatory, a government agency in Nice, said visitors
      from North America amounted to about 600,000 in 2001, and
      slightly fewer last year, or about 7 percent of the total,
      compared with 1 million each from Britain and Italy, the
      largest foreign groups.

      "We observed in the past a very particular pattern," Mr.
      Vece said. "American tourism increased, then something
      happens and it goes down, by, say, 50 percent, and you
      rebuild."

      In 1986, he noted, American visits collapsed after
      terrorist attacks in France; in 1991, they declined after
      the first gulf war.

      "Now, again, we have to wait," he said. "We're just a
      tourist destination. But business will be down."

      Mr. Djabri agrees. "We'll have to see - some say they won't
      come. They remain welcome. It's in your head. That's all."

      http://www.nytimes.com/2003/04/02/business/worldbusiness/02TOUR.html?ex=1050294398&ei=1&en=aeb7f2d00cd31c97



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