Gulf war deals blow to travel industry International trips are hit hardest WAR IN THE GULF

February 05, 1991|By Maria Mallory

First airfares went through the roof, and then a recession further dampened traveler enthusiasm. As if things weren't bad enough, Saddam Hussein has become the latest scourge of the travel industry.

"Unfortunately, Mr. Saddam has been very successful in scaring the devil out of the American traveler," says Dan P. Bohan, vice president of Omega World Travel.

Mr. Bohan ought to know. With the war in the Persian Gulf on everyone's mind, the volume of trips booked through Mr. Bohan's agency has fallen off at least 10 percent from mediocre 1990 bookings.

"That doesn't seem like much, but normally we have a 10 to 20 percent [annual] increase," Mr. Bohan says. "That's a [total] 30 percent drop" in expected business.

Falls Church, Va.-based Omega, which has seven offices in the Baltimore area, has laid off 35 of its 700 workers as a result of the decline in business. And if things don't get better soon, the agency may have to furlough additional workers, Mr. Bohan says.

"January will be the absolute worst January the travel business has known any time, anywhere -- ever," Mr. Bohan says. "We would be out of business if this continued for a year."

Omega isn't the only agency feeling the pinch. The one-two punch of the weak economy and the war have sent the travel industry reeling.

Demand for leisure travel has slowed dramatically, and international travel is the hardest hit. "On the international side it's like a ghost town," says Charles J. Roumas, vice president of Philadelphia-based Travel One Inc. which has 70 employees in the Baltimore area. Travel One's international business is off at .. least 50 percent, he says.

Travel agents blame the war for the plunge. Not surprisingly, no one is planning a getaway to the Middle East, but the popularity of European vacations also has flagged with the start of Operation Desert Storm.

"People have great trepidation about terrorism. They are afraid," says Jim Prosser, marketing vice president at Ober United Travel Inc.

That fear of flying abroad has hurt agents in the mid-Atlantic area most, says Omega's Mr. Bohan. Many of the major hubs for international flights are along the Northeast Corridor, from Boston to Washington.

Washington-based Euram Tours Inc. is a prime example. Acting as a ticket clearinghouse, Euram sells leftover seats on under-booked flights at a deep discount. The agency sold about 50,000 tickets in 1990 and typically books about 800 passengers a week at this time of year, mostly travelers going to Europe, says David Scott, Euram's president. That number dropped to about 500 last week.

Euram, which sends many of its travelers on international airlines out of Baltimore-Washington International Airport, is cutting employees' hours to save money during the downturn.

Some agents say that some vacationers are opting to visit the Caribbean, Mexico or other warm-weather spots. Still, travel to those destinations has not made up for the lost travel to Europe.

Terrorist attacks in 1985 on airports in Rome and Vienna and aboard the Mediterranean cruise ship Achille Lauro have not been forgotten, says Claus M. Sickingen, vice president of AESU Inc. at Cross Keys. Though the war-related jitters haven't yet prompted as many cancellations as there were then, Mr. Sickingen says reservations for his summer tours -- across the United States, Australia and New Zealand -- are down about 30 percent.

Some travelers don't think it's appropriate to go on a luxury cruise while U.S. troops are risking their lives in the gulf, says Valerie Earwood, a manager at Travel One Inc. in Hunt Valley.

Travel One called off two Caribbean cruises last week because of weak demand. The cruises, which were sponsored by two social organizations Ms. Earwood declined to name, wouldn't have left until July and August, but had to be booked now.

Travel One agents booking the trips "were trying to promote it, and they weren't getting any response," Ms. Earwood says. The loss of the trips cost Travel One about $6,000 in revenues, she says.

Business trips, too, have been curtailed since the war began, though corporations also had been scaling back travel along with recession-prompted cost-cutting. Business travel has dropped 5 percent to 6 percent this year, according to the U.S. Travel Data Center in Washington.

John L. Lewis, general manager of Owings Mills-based Travel Destinations Inc. says many of his corporate clients have been "generally reluctant" to take trips since the war began.

One smaller business client went so far as to prohibit all travel, domestic and international, when U.S.-led forces began bombing Iraq, which heightened the fear of terrorist reprisals.

"We think that's overreactive," Mr. Lewis says, noting the increased security at the nation's airports.

Companies that are still permitting trips are traveling "smarter" in the face of the recession, says Margie L. Crace, president of the National Business Travel Association. Many corporations are consolidating business trips, postponing them or making arrangements well in advance to lock in cheaper fares, she says.

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