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Travel industry's prospects look brighter this summer, but challenges persist

Sharon Jones will travel abroad this summer for the first time since the Sept. 11 attacks.
/ Source: The Associated Press

Sharon Jones will travel abroad this summer for the first time since the Sept. 11 attacks.

"Last year I was still frightened and had no desire to do that," said Jones, of Columbus, Ohio. Now, eager to dip her toes into international waters again, the part-time teacher will take her son and daughter-in-law to Cancun, Mexico.

"This is mama's treat," said Jones, who shelled out $4,500 for a weeklong, all-expenses-paid trip.

With more Americans like Jones putting aside concerns about terrorism or the economy and giving in to their wanderlust, the travel industry's prospects look brighter this summer after three dreary years in a row.

Though gasoline prices average more than $2 a gallon nationwide, the number of people taking road trips is also expected to rise.

"There is a lot of pent-up demand that is being released right now," said Mark Masuda, vice president of supplier relations at Plymouth, Minn.-based Carlson Wagonlit Travel Inc., the world's second-largest travel firm.

It is too soon to tell whether that trend will be significantly affected by a warning from the Bush administration, just days before Memorial Day weekend, that al-Qaida is determined to launch an attack in the United States in the next few months.

The Travel Industry Association of America estimates that the number of leisure trips taken this summer will rise by 3 percent, compared with last year, and that vacation spending will increase 4 percent. Based on anecdotal evidence gathered since the latest terror warning, and surveys done after previous warnings, the organization said it does not anticipate a noticeable dropoff in summer travel demand.

Nonetheless, "if there are serious (terrorist) incidents in the next few months, I suspect we will cancel," said Jones, whose trip is scheduled for August.

Because many Americans postponed trip-planning last spring, when major combat in Iraq was under way, comparing travel demand this summer with a year ago can be somewhat misleading. Moreover, traces of the industry's recent struggles remain _ most airlines have yet to regain profitability and consumers are still using the bargain-hunting skills they honed when money was tighter.

Still, it is clear that more people are planning vacations this year.

The Cheney family of Washington, D.C. _ several generations removed from the vice president _ feels secure enough financially, despite reservations about the country's fiscal health, to spend one week in Block Island, off the coast of Rhode Island. To cut down on costs, the Cheneys will share with friends a $2,400-a-week rental home they found online.

"I still would say the economy is not very strong," said Scott Cheney, who runs a work force and economic development consultancy. "But things are good enough for us to do one trip. Psychologically, it's good to get away."

Harry and Marcie Niemier of South Bend, Ind., have a similar outlook. The retired couple is taking a nine-day bus tour out West, with stops at Yellowstone National Park, Mount Rushmore and Jackson Hole, Wyo.

While the trip will cost the Niemiers about $3,000 plus airfare from Chicago to Salt Lake City, "it's a bargain when you think you don't have to make any of the arrangements and everything is confirmed," Marcie Niemier said.

Mark Travel Corp. of Milwaukee, which specializes in trips to Mexico and the Caribbean, said bookings are up 15 percent to 20 percent compared with last year.

"Keep in mind, though, that last year at this time we had just declared war in Iraq and numbers had fallen off the cliff," said Tammy Lee, vice president of corporate affairs.

Not all families are planning elaborate summer trips.

The Gross family of Dripping Springs, Texas, will unwind in their home state, visiting family in Dallas or taking a weekend trip to San Antonio or Houston, "to keep it economical," said Lisa Gross, a part-time hospice nurse.

"I'd say we struggle," Gross said, explaining that her oldest son starts college in the fall. "We don't have a lot of money left over for vacations."

Even so, many Americans are spending more than they did a year ago, travel agents said, either because they're booking higher-end trips or because availability is tighter and companies are able to boost rates.

"Those who wait to the last minute to book," Lee said, referring to a strategy employed by bargain hunters in recent years, "will not be getting the good deals that they saw a year ago."

While bookings have been better than expected, particularly to Europe, where the weak dollar makes it more expensive for Americans to travel, it will likely be another year before revenues reach the levels of summer 2000, a benchmark for the industry's good times, according to Scott Supernaw, vice president of sales and marketing at Tauck Inc., a Norwalk, Conn., tour operator.

Indeed, travelers are not opening their wallets without careful consideration of what they get for their money. Supernaw said the company's reservation agents are spending more time on the phone with customers than ever before as travelers analyze trip itineraries line by line and verify that published brochures are accurate.

"They're making a decision that's probably more like the way they buy a car," he said.

This frugal approach does not apply to gasoline purchases. Despite record-high prices _ the average pump price for a gallon of gas is $2.06 _ motor fuel consumption is nearly 4 percent higher than a year ago. Some 31 million Americans are expected take Memorial Day weekend trips of 50 miles or more, up from 30 million a year ago, according to AAA.

Airline ticket prices, meanwhile, are down sharply even though passenger demand is stronger.

The Air Transport Association said passenger traffic was up 11.9 percent in April, outpacing a 10.4 percent increase in capacity. However, the average leisure fare is about 21 percent lower than it was a year ago. The average one-way fare for the 100 most popular domestic routes last week was $93, according to Harrell Associates of New York.

One concern for aviation officials is the potential for long delays at airport-security checkpoints and on runways as travel demand picks up _ a problem not encountered since before the terrorist attacks. However, some executives say worries are being overblown merely to keep consumers' expectations low.

"Those fears are unwarranted," said Bob Reding, senior vice president of technical operations at American Airlines.