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Terror only one blow to tourism

Fewer visitors from abroad, weaker airlines and too much capacity are hurting Florida's biggest industry.

By MARK ALBRIGHT, Times Staff Writer

© St. Petersburg Times, published September 7, 2002


Fewer visitors from abroad, weaker airlines and too much capacity are hurting Florida's biggest industry.

Florida's tourist industry has rebounded from the depths in the year since Sept. 11, but that's only part of the story.

The terrorist attacks accelerated other forces that were gnawing at the health of Florida's biggest industry: a global economic slowdown; an airline industry searching for a profitable business model; and new theme parks and hotels that opened in recent years before there was enough demand to support all of them.

"We've been hit with a triple whammy," said Dieter Huckestein, president of the hotel division of Hilton Hotels Corp. "Most of it is cyclical and will bounce back over time. People adjust."

This time, travelers are adjusting in different ways.

By summer, Florida tourism's domestic markets were almost fully recovered. But while the number of visitors bounced back, they are not staying as long or spending as much. Business travel remains down sharply. And the flow of international visitors (who account for one of every nine Florida visitors) remained depressed by 11 percent through August over the same period a year earlier.

"It will be 2004 before business gets back to 2000 levels," said Peter Guptill, president of Dollar Rent A Car in Florida and chairman of Visit Florida Inc.

As the industry enters another slow fall season, national political leaders are talking of war again, this time against Iraq's Saddam Hussein.

"We're entering a really difficult period," said Bill Peeper, president and chief executive of the Orlando/Orange County Convention and Visitors Bureau.

"It took us five years to fully recover from the last recession" and the Persian Gulf War in the early 1990s, said Tom Waits, chief executive officer of the Florida Hotel and Motel Association.

Tourism collapsed overnight after the terrorist attacks last September. Hotels emptied. Airlines and airports shut down. Restaurants and deserted theme parks had to rev up discounts to lure locals who could pick up the slack. Americans' fear of flying rose sharply.

A year later the fear of flying has settled down. In a survey of Americans conducted in August, 79 percent said they felt as secure at airports as they did before Sept. 11. In the 11 months after the terrorist attack, 88 percent of those surveyed had flown commercially, according to the poll commissioned by Travelocity.com, the Internet travel service based in Fort Worth, Texas.

Only 6 percent said they were avoiding flying for safety reasons, down from 27 percent in a survey taken a few days after Sept. 11.

Even so, the tourist industry is roiled by so much change that experts disagree on what the new "normal" is.

This much industry leaders do know: Travelers are booking later than ever. They are vacationing closer to home. Theme parks are less of a vacation priority. For the first time since the 1970s more travelers drove to Florida this spring than flew.

As a result, the tourist industry's lingering problems are concentrated in markets most reliant on international visitors and air travel: Orlando and South Florida. Longtime "drive markets" such as Daytona Beach and the Panhandle suffered little this summer. In the Tampa Bay area, the effects were mixed. Some hoteliers were scratching their head in March when more visitors to Pinellas County drove than flew.

"Our hotel in Crystal River never missed a beat, but in Clearwater Beach we had parking problems for the first time since the 1970s," said Don Seaton, former chairman of Best Western, whose family runs several hotels.

By summer, the airlines at Tampa International Airport restored all the seat capacity that was initially lost.

In Ponte Vedra Beach near Jacksonville, vacationers who drove salvaged the year for the Sawgrass Marriott Resort. Business groups canceled a total of 12,000 room nights of meetings, so the golf resort used discounts to pick up 10,000 room nights of business from leisure travelers. "September looks good, but October is still scary," said general manager George Featherstone.

Nonetheless, Florida's tourist industry leaders say the recovery of the past year will be fleeting without a vibrant airline industry.

"America flies," said Michael Leven, chairman and chief executive officer of U.S. Franchise Systems, which runs the Microtel and Hawthorne Suites chains. "If you stop the airlines, you stop the entire economy. An unhealthy airline industry is incredibly dangerous."

While airline bankruptcies garnered ample attention after Sept. 11, car rental agencies in Florida, the nation's biggest rental car market, are reeling. Three of the 10 biggest car rental companies -- Budget Group of Daytona Beach and Fort Lauderdale-based Alamo and National -- sought protection from creditors in bankruptcy court. Rental rates are the same as before 9/11, if not higher. But revenues sank. With fewer fliers needing to rent on arrival and fewer Europeans on package tours, the rental car companies were forced to reduce the size of their fleets by as much as 17 percent.

"Even though business is way down, in peak periods you still won't be able to find a rental car," Guptill said.

Hotel operators, meanwhile, fret that the typical vacationer who used to book two months in advance now puts off deciding where to stay until just days before arrival.

Some marketers say the economy made consumers more frugal. Others think consumers are hesitant to book too far ahead in case some other world event interferes.

Still others say, "Get used to it." The Internet handed consumers new tools allowing them to decipher how hotel rates are discounted like airline tickets. Hotel rooms can now be bought on 17,000 Web sites. So travelers can comparison shop far more thoroughly and check rates daily before booking.

"That's why we made sure our rates are identical through every distribution channel," said Hilton's Huckestein. "The Internet has made customers rate vigilantes."

-- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

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