Weak Dollar, Low Air Fares Help US Travel Industry Recover Some of Its Luster
BOSTON — BRITISH travel agents are making a surprising recommendation to travelers this summer: Instead of visiting the new Euro Disneyland complex near Paris, save money by spending a week at Walt Disney World in Orlando, Fla.
Lured by excellent rates of exchange for their pounds, marks, and yen, international visitors are pouring into the United States. Meanwhile, an all-out fare war among domestic airlines has helped deliver a surge in travel, car rental, and hotel bookings by Americans.
"Other sectors of the economy are obviously suffering, but travel has done very well," says Geoff Sundstrom, a spokesman for the American Automobile Association in Orlando, Fla.
Signs of a boom across the travel industry include:
* US highways experienced the busiest Fourth of July weekend since 1988, with 32 million Americans on the road.
* International-visitor arrivals have jumped 8 percent in each of the last two years. (Increases of 7 percent per year for 1992 and '93 are forecast by the US Travel and Tourism Administration.)
* Domestic airline passenger traffic was up 9 percent in June over the same month last year.
Moreover, foreign visitors will spend $21 billion more in the US this year than American travelers will spend overseas, Secretary of Commerce Barbara Franklin announced last month.
It was only in 1989 that the US had its first-ever trade surplus in tourism. That year's $5.4 billion surplus rose to $10.6 billion in 1990 and $16.8 billion in 1991.
"A lot of people were pushed out of their lethargy" by the low domestic air fares, says Suzanne Cook, executive director of the US Travel Data Center. "Our survey recently suggested that 9 million adults had bought airline tickets for the summer period that would not have otherwise."
Compared with a diminutive 1.4 percent overall growth rate for the US economy in the second quarter, and projections of around 3 percent for the remainder of the year, many in the travel industry have high expectations. The US Travel Data Center had predicted a 4 percent rise in tourism spending this year, recovering ground lost in the weak 1991 season. But "the early indicators are that we might exceed that," Ms. Cook says. In June, domestic-airline passenger travel increased 9 percent over last year.
"We're stronger and better off than we were last year, but not as strong as I thought we were going to be," says Philip Davidoff, owner of Belair Travel in Bowie, Md., and president of the American Society of Travel Agents. "A lot of the summer was sold out at bargain-basement fares. People are traveling, but from a profitability standpoint, we're in the doldrums."
The American Automobile Association estimates that 32 million Americans traveled 100 miles or more from home for the Fourth of July holiday - the greatest number since 1988.
"People have started taking trips closer to home," says Eileen Kalb, an economist with the Florida Department of Commerce. "We've picked up a lot from surrounding states, people driving rather than flying."
Tourism contributed $350 billion to the nearly $6 trillion US economy in 1990, according to the National Travel and Tourism Awareness Council. That figure dropped in 1991, but should rise again this year. Foreign visitors will spend $70 billion here in 1992, up from $64 billion in '91.
According to Cook, the decline in 1991 was due to a decrease in the number of nights people stayed away from home. "We had a decline last year of 2.5 percent in person-nights," she says. "Other indicators of the industry - hotels and airlines - also had a hard time in 1991."
Unlike many industries that shed workers with the first hint of a downturn, the labor-intensive tourism and travel sector does not have as much flexibility.
"Employment tends to hold pretty steady because it is such a labor-intensive industry," Cook says. "We've got to have the people there to provide the service and hospitality that is really a major part of the product." In 1990, travel and tourism employed about 6 million people and had a payroll of about $73 billion.
Travel in California, Florida, Texas, and New York produces about one-third of the nation's travel-generated employment.
In seven states, travel and tourism is the largest employer. The industry is among the top three employers in 25 states, according to the US Travel Data Center.