Attacks may cost The Sept. 11 terrorist attacks could end up costing the U.S. economy $640 billion by the end of next year in lost taxes and lost jobs, according to a federal official whose job is to help travel recover.
U.S. economy up
to $640 billion
A federal official, though, tells a
Hawaii group that he's seeing
signs of a leisure travel recoveryBy Russ Lynch
rlynch@starbulletin.com"Two million people may ultimately lose their jobs," said Douglas Baker, the Commerce Department's deputy assistant secretary for service industries, tourism and finance.
The decline in tourist travel is playing a significant part in the losses, he said.
"It may take up to three years for international travel to recover to year 2000 levels," Baker said yesterday at a morning meeting of tourism executives and businesspeople arranged by the Hawaii Tourism Authority and the Hawaii Visitors and Convention Bureau.
There is some good news, however, he told the meeting at the Hilton Hawaiian Village Beach Resort & Spa.
Airline and lodging sectors are improving and there has been a strong 2 percent to 5 percent increase in overall revenues in the travel and tourism industry in the first quarter of 2002 from the fourth quarter of 2001, he said.
A number of recovery efforts are in progress and there are already signs that people are traveling again, both within the United States and from overseas to this country. Arrivals in the United States from overseas in January were down 20 percent compared to January 2001, but that was a significant improvement from the weeks after Sept. 11 when international arrivals were down 34 percent, Baker said.
Of particular significance is a new "memorandum of understanding" signed April 19 in Tokyo by representatives of the governments of the United States and Japan, he said. The agreement will create "a formal tourism promotional initiative" in which both sides will push for more travel between the two countries, with the goal of recovering and expanding the travel base lost in 2001, Baker said.
His office will use the principles of that agreement to push for a recovery in the next eight to 12 months of travel to the United States from the United Kingdom, Germany, France and Brazil, he said, without neglecting Mexico and Canada, he said.
Baker's visit was part of the celebration of National Tourism Week, which ends tomorrow. He said the week is a good chance to use the events of Sept. 11 and what happened afterward to educate the general public on the underlying importance of tourism to the economy.
Rick Humphreys, acting executive director of the Hawaii Tourism Authority, used the opportunity to review the Legislature's action's affecting tourism.
He said the authority doesn't like some of the mandated changes but accepts what the government is aiming to do and can live with them. One that could create problems is a cut in the HTA's share of the hotel room tax to 32.6 percent of the total collection, down from 37.9 percent.
There is no longer a surplus in the tourism fund, since $10 million from it was used for emergency marketing after Sept. 11, and squeezing anything out of the general fund could be hard, given the state's tight budget constraints, Humphreys said.
On the other hand, if business keeps recovering, hotels may generate enough money to increase the tax revenues and avoid a shortfall, he said.
Humphreys said he supports the Legislature's action to make the board of the HTA a "policy" board, rather than one that gets involved in the day-to-day running of the HTA's activities.
"When you have good management, you let management run your business," he said. The HTA board is currently searching for an executive director to manage the HTA, which oversees the state's tourism promotion budget.