World tourism industry fears extended slump

From Tom Bogdanowicz
CNN Financial News

LONDON, England (CNN) -- The world tourism industry is bracing itself for a substantial slowdown in business after the terrorist attack on the United States.

The World Tourism Organization has reduced its forecast for growth in tourism this year by one-third, and that assumes the effects will be limited.

Crystal Travel, normally a busy travel agency in London, says business has slumped since the September 11 attacks.

Some customers arrive to cancel travel arrangements; others, to change vacations to somewhere other than the United States; still others are simply traveling home.

Travel agents use centralized systems to arrange vacations, and one of those systems shows bookings are down by one-third worldwide, with demand from U.S. customers down by three-quarters.

Gulf War recovery took years

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That's a major blow to the tourist industry. U.S. travelers are the world's biggest spenders, accounting for some 13 percent of the trillion dollars international tourists spend every year.

"The U.S. was hit on its own territory, and furthermore, the impact was done by civilian aircraft, which most probably will create a psychological effect that is much bigger than the Gulf War," said Jean-Claude Baumgarten, CEO of the World Travel and Tourism Council.

The year after the Gulf War, the number of U.S. tourists traveling to Europe fell by more than 20 percent, and it didn't recover for about three years. Britain, the No. 1 destination for U.S. travelers, was hard-hit then and is likely to be hard-hit now.

"Roughly one in every five dollars spent in Britain by overseas visitors is spent by Americans, and last year 4.1 million Americans came here, and they spent close to $4 billion, so it's big business," said Jeff Hamblin, CEO of the British Tourist Authority.

Some travelers are afraid of flying, others say they're not, but most make it clear they want to be home when the United States responds to last Tuesday's attack. So international travel is unlikely to revive until that response is over, no matter how long it takes.