Travel industry
fears Iraq fallout

Hawaii officials are calm
but concerned

From staff and wire reports

Even if the U.S. and British bombing of Iraq ends in the next few days, as the Clinton administration has suggested, the uncertainty it has created could linger and hurt airlines, hotels and others in the travel industry at the height of the holidays.

Travel industry spokespeople say a terrorist re-prisal against a target in the West or an Iraqi strike against Israel would presumably halt much international travel, as it did shortly before, during and after the Persian Gulf War of 1990-91.

In Hawaii today, industry representatives were calm but watchful.

"Hopefully nothing will happen," said Gilbert Kimura, regional manager at Japan Airlines. "It's a matter of wait and see. Business as usual."

But Kimura said he has his fingers crossed the confrontation won't escalate, noting the sharp drop in travel that hurt JAL and other international carriers during Gulf War.

In the only response by an air carrier to the current fighting, United Airlines, a unit of UAL Corp., canceled its daily round-trip flight between London and New Delhi yesterday. It tentatively planned to resume the flight today.

Robert Solomon, senior vice president of sales and marketing at Outrigger Hotels and Resorts, sees little impact in Hawaii unless the conflict escalates.

"If this becomes a full military engagement, we'd have to reevaluate," said Solomon. "But this should not be a grave concern for our visitor industry at present."

Officials at U.S. airlines and airports, while reluctant to discuss the subject publicly, acknowledge that they began tightening security Wednesday evening, when the missile attacks began. But security has already been at a high level since at least late August, they added, when the United States attacked targets in Sudan and Afghanistan with cruise missiles.

At Honolulu Airport today, bomb-sniffing dogs usually kept in baggage inspection areas were more visible throughout the airport. And security guards were told to be more visible. But state Airports Administrator Jerry Matsuda said he's received no word yet from federal transportation authorities to move beyond the usual "level three" of airport security.

"Based on current threats, the word we got is things will be status quo," Matsuda said. "Nevertheless, we've been asked to keep our people more visible."

For all the heightened concern about security, though, travel agents said they had not received any cancelations.

"I think people are so used to hearing about the possibility of terrorism, especially from Iraq, they no longer panic," said Richard Earls, president of the Summit Travel Group in Winston-Salem, N.C. But if the conflict escalates, he said, "I think you'll see people who had planned to visit overseas turning to domestic destinations and the Caribbean."

Nicole Judd, sales manager at HIC International Tours in Waikiki said business has been particularly slow in recent days.

"Sales tend to go down about this time," she said. "The only thing is it's really, really slow."

Many travel agents warned clients to get to the airport early and to carry identification. "We assume they already know that, but it's still important to remind them," said Michelle Dahan, general manager of leisure travel for Rosenbluth International.

The National Business Travel Association reiterated a warning that members headed for destinations considered dangerous or chancy should travel in twos, vary their routines and notify the local embassy or consulate of their presence.

Rob Deliberto, an official with Carlson Wagonlit Travel, does not anticipate a prolonged war and also does not expect a significant drop in international air travel. "But during the Gulf War," he said, "as tensions escalated, international travel dropped to almost nothing."

The number of passengers on U.S. airlines fell 44 percent on trans-Atlantic routes in 1991, according to the Air Transport Association, and 20 percent on Pacific routes.

While airlines bore the brunt of the Gulf War, the broader domestic travel industry also suffered. Losses during that period were exacerbated by domestic recession.

U.S. hotel occupancy in 1991 fell to just over 62 percent, well below the 65 percent break-even figure of that time, and Coopers & Lybrand (now PricewaterhouseCoopers) estimated that 60 percent of the hotels in 1991 lost an average of more than $1,000 a room.

Many cities were hurt by a downturn in the convention business in 1991, as corporate America and professional associations tightened spending. Hawaii lost about 850,000 tourists from 1991 through 1993. Most were Japanese who opted to visit Australia or stay home, rather than risk a terrorist incident.

The war hurt the cruise industry, which had to advertise heavily and cut prices to attract passengers. Cruise lines were also forced to abort sailings to the Mediterranean, which cruise officials promptly dubbed the "Dead Sea."

But no industry is more fearful of even a partial re-enactment of the Gulf War than is the airline industry, which lost $12.8 billion from 1990 through 1993.

Airlines trimmed flights and flew smaller planes, 40,000 airline employees were laid off and several airlines petitioned for bankruptcy. Two of the nation's oldest airlines, Eastern and Pan American -- financially weak even before the Gulf War -- were so damaged by fallout from the war that they sold their international routes in a desperate but ultimately futile effort to stay afloat.

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Star-Bulletin reporter Peter Wagner and the
New York Times contributed to this report.