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Attacks in Afghanistan accelerate tourism slump
Tim Garden, a former assistant chief of the British defense staff and a lecturer at King's College London, told his students the other day that they were looking at the first war in which they could fight by going shopping and going to the theater.
If that is true, few Britons seem to have thrown themselves into the front lines of battle. Theater bookings are down and the tourism industry has been devastated since the Sept. 11 terrorist attacks on the United States produced ripple effects throughout the world economy.
Well before Sept. 11, the British tourist industry had been hard-hit by the effects of the foot and mouth disease epidemic. Tourism is normally a $96 billion a year industry in Britain, and foreign visitors--Americans first among them--account for $19 billion of that. American tourists spent $3.7 billion here last year, but the relative absence of Americans from London streets has been particularly noticeable in recent weeks.
The tourist industry was looking at losses of more than $2 billion before the terrorist attacks, and the British Tourist Authority said the figure for the last three months of this year could climb another $1.5 billion.
Echoing U.S. officials, Prime Minister Tony Blair has urged Britons "to work, to live, to travel, to shop" exactly as before Sept. 11 to keep the economy afloat.
But with the bombing of Afghanistan this week, and a highly visible presence of extra police around British government buildings and tourist sites, the tourists' reluctance to come here has increased.
"Unfortunately, we feel that the latest blow to tourism will have a far deeper and longer-lasting effect than the foot and mouth outbreak," said Jeff Hamblin, chief executive of the British Tourist Authority.
Andrew Lloyd Webber's musical "The Beautiful Game" fell victim to the tourism decline because of foot and mouth earlier this year. The first theatrical victim of the terrorist attacks has been another hit musical, "Peggy Sue Got Married," which will close Saturday after a run of just six weeks. The show had been taking bookings through next March.
"We are all devastated," said Ruthie Henshall, star of the show. "Our bookings have been climbing steadily but since the barbaric attacks on the World Trade Center, everything has stopped." Producers said they were losing about $45,000 a week.
Theaters just `scraping by'
Paul James, a spokesman for the Society of London Theaters, said box-office revenues were down 10 percent to 12 percent on average from the same time last year. "Some theaters are just scraping by," he said. "Several shows were hoping for an upturn in October and November, but terrorism" has reduced the chances of that happening.
Foreign tourists normally account for 30 percent of London theater sales.
James noted that shows such as "Mamma Mia" and "The Lion King" were still doing well, and hopes are high for Noel Coward's "Royal Family," opening soon with Judi Dench in the starring role. "So not all is doom and gloom," he said. "But now you can get tickets for shows you would have struggled to get before."
The number of visitors to the Tower of London and Kensington Palace were down by 30 percent and at Hampton Court by 20 percent. Forty percent of American tour groups have canceled visits to the Royal Shakespeare Theater in Stratford-upon-Avon.
But Hamblin said some conventions that were scheduled for the Middle East and eastern Mediterranean have been diverted to Britain, and there has been an increase in inquiries about language studies from Latin Americans who previously would have gone to the U.S.
Financial center in trouble
While some people have lost their jobs because of the double blow that has hit the tourist industry, the most severe cuts in employment may take place in the City, London's financial district. Even before the terrorist attacks, many investment banks were reducing staffs because of falling stock prices, and an estimated 3,000 people were thrown out of work.
Out of a total of 300,000 people employed in the City, the Center for Economic and Business Research estimates that 20,000 will be gone by the end of the year. That includes people working in accountancy, law and fund management.
House prices in London have been climbing steadily for some time, and are among the highest in Europe. But some real estate agents said the upper end of the market already has been hit hard, with people pulling out of purchases or demanding price reductions.
ITV, Britain's independent television network, said its advertising revenue has suffered the worst drop in a half-century. Some TV executives are reported to anticipate a 30 percent fall in revenues in December. Newspaper advertising is down too.
British manufacturing is in recession and has been declining steadily since January. The high value of the pound in relation to the euro, the European single currency, has made it difficult for manufacturers to sell on the continent.
But there is one bright spot: Retail sales rose sharply in September, even though some stores that rely heavily on tourism have begun to suffer. Sales of new cars were especially buoyant, increasing 25.4 percent from the same month last year. The Bank of England recently cut interest rates, fueling the hopes of car dealers that sales will remain strong.
Overall, Britain may be no worse off than some of its European neighbors. Spain is one of the world's top three tourist destinations, but bookings for October have fallen 30 percent.
Tourism is worth about $60 billion a year to Spain and accounts for 11 percent of national income. As in Britain, tourist numbers were down before Sept. 11--partly due to bombings blamed on Basque separatist terrorists and partly to strikes by pilots and airport workers.