Europe sales fall flat after eight record years

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NEW YORK -- With the exception of some high-end business, most travel agents are experiencing either flat or reduced volume to Europe this year, a Travel Weekly survey of retailers found.

Queries to agents followed the news that the European Travel Commission, the marketing organization here, reduced by 50% its expectations for travel to Europe in 2001.

And Einar Gustavsson, U.S. chairman of the commission, conceded that the scaled-back forecast, from 4% growth to 2%, "probably is a little optimistic."

What's behind the bad news? Eight consecutive record-breaking years, for one thing. As the U.S. economy grew steadily through the '90s, travel to Europe grew with it, from 7.6 million visitors in 1993 to 13.1 million last year, according to the U.S. Dept. of Commerce's Office of Tourism Industries.

But this year, the disastrous impact of hoof-and-mouth disease on Great Britain tourism, which accounts for 30% of all travel to Europe, is being compounded by sluggish economies here and abroad.

Ann Litt, president of Undiscovered Britain & Ireland in Philadelphia, described March and April as "devastating" for summer travel to Great Britain.

For the first time in her seven years in business, Litt said she sold more travel to Ireland than Great Britain.

"However, I have been getting some major inquiries recently for Britain again, so I think that people are starting to want to [go] there," she added.

Cecil Wilson, owner of Charleston Travel and Cruise Center in Charleston, S.C., and president-elect of Travel Agents of the Carolinas, said his agency is "doing fewer budget packages, but more higher-dollar items."

"I guess it stands to reason that those who normally travel still are doing it," he said.

Consumer confidence across the U.S. seems to depend largely on the local economy. For example, Yvonne Speck, a retailer with the Travel Advisors of Reno, Nev., said her region, which does not have a large technology industry, has not suffered as much as San Francisco, the largest city nearest her firm.

"I don't notice anyone holding back as far as spending money on travel," she said.

Stan Morse, president of the Hudson Valley ASTA chapter and co-owner of Marstan Travel in Millbrook, N.Y., knows the effect of layoffs very well, as a former IBM human resources employee who left the company after seeing it through a "tremendous downsizing" in 1993.

The effects of those layoffs, he said, are still being felt in the area. Morse said he believes that the recent economic troubles here are likely to affect European travel in the near future.

"It'll be interesting to us to see what happens this fall," he said, "because if the market goes south and the economy goes down, it will affect travel next summer, there's no doubt about that."

Morse added that he has already seen a slowing in domestic travel.

Neal Kraemer, president of Carrousel Travel in Minneapolis and past president of the ASTA Upper Midwest chapter, said his firm is "definitely having a soft year for Europe travel," adding that he thought the economy is having a greater impact than many believe.

"I have talked with numerous agency owners in the Midwest and around the country," Kraemer said. "It seems like everyone has indicated the same thing [about the economy's impact on Europe sales], and I would think [the] 2% growth [predicted by the European Travel Commission] might be a stretch."

Something, however, is working well in Alabama. Nick Smith, owner and manager of Custom Travel in Atmore, Ala., was the only agent surveyed who reported a sizeable increase in travel to Europe, about 10% through June compared with 2000.

ETC: Media hype from euro's debut to raise interest

NEW YORK -- Travel to Europe will get a shot in the arm this fall from the media hype expected to precede the launch of the euro as street currency in 12 countries in January, Einar Gustavsson, U.S. chairman of the European Travel Commission, said.

Gustavsson also predicted that lower air fares, being marketed now, will help to lure travelers this fall.

Meanwhile, most European tourist boards reported U.S. business is up by varying accounts, although numbers for the U.K. and Ireland are down. The disappointing U.K. results are tied to the widespread outbreak of hoof-and-mouth disease earlier this year.

Here's a sampling of some recent reports. (All comparisons are with the same period in 2000.)

  • Austria. Room nights booked by U.S. visitors from January through May were up 7.5%, to more than 500,000.
  • Denmark. U.S. room nights were up 14.6% for the first five months of the year.
  • Finland. U.S. overnights were up 2.3% through May.
  • France. U.S. arrivals are expected to rise 5% this year.
  • Germany. U.S. room nights from January through April were up 3.8%.
  • Great Britain. Tourism authorities are bracing for 2001 visitor totals to be down by 10%, to 20%. The outbreak of hoof-and-mouth disease, which forced temporary travel restrictions in rural areas, is widely blamed for the decrease.
  • Iceland. U.S. room nights rose about 8% for the first six months of the year.
  • Ireland. The January-through-May average amounted to a 2% drop in U.S. room nights booked.
  • Malta. U.S. arrivals rose 5% for the January-through-April period.
  • Norway. A 3% to 4% increase in U.S. overnights is predicted for the year.
  • Portugal. A 4% increase in U.S. arrivals overall is expected for 2001.
  • Switzerland. U.S. bed nights dropped by 1% through May.
  • Turkey. U.S. arrivals are up 4% through June.
  • Kenneth Kiesnoski contributed to this report.

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