INTERNATIONAL TRAVEL

With the buying power of the dollar at distressing lows overseas, Travel ’88 is emerging as an enigma to the industry.

Surprisingly, Americans are disregarding horror stories of high prices and are embarking on a buying binge that could match records set in 1987. The momentum is tied to prepaid package tours as well as to independent travelers using bed and breakfasts and small inns as substitutes for expensive hotels in the major cities.

Last year more than 6 million Americans visited Europe, a figure surpassed only by the record of 6.4 million set in 1985. After the October stock market debacle, industry leaders feared the worst. Instead, 1988 is emerging as an engaging year.

The Times’ Travel Section’s annual poll shows that the travel industry expects growth in the South Pacific, Mexico and Canada, along with a number of destinations in the Orient.

Europe, though, is turning out to be the year’s biggest surprise. The industry had steeled itself for disappointment. Travel agents and tour operators believed the dollar’s decline would mark disaster for tourism to the Continent. They recalled how Americans avoided Europe after terrorist attacks in 1986. Now the deterrent would involve economics. Instead, Americans are preparing for a new invasion of the Continent--even in the face of such scare stories as the $3 cup of coffee and $100 meals.

James Murphy of Brendan Tours credits the unexpected turnaround to the tour package. Murphy’s own tours figure out to about $78 a day on the Continent and less in Ireland, including first-class hotels, sightseeing and most meals.

“It’s a far cry from a $3 cup of coffee in a deluxe hotel,” Murphy said.

Frederique Raeymaekers of the European Travel Commission suggests that Americans “do more homework to learn about inexpensive packages along with reasonable trans-atlantic flights.”

Representing 23 nations, the commission is conducting a lively campaign aimed at the American consumer. The commission points to attractive land packages as a major lure. “Instead of spending recklessly, Americans are searching out bargains this year,” Raeymaekers said.

Francis Goranin, president of the American Society of Travel Agents, said that many Americans who once lived opulently at Paris’ Hotel George V and the Bristol in Vienna are choosing “more humble hotels.”

Like Murphy, he credits the prepaid package tour with drawing Americans to Europe in 1988. As a bonus, a number of tour operators are guaranteeing their prices, even in the face of rising costs.

Americans opposed to package tours are buying Eurailpasses, renting cars and striking out on the B&B; circuit.

“They’re learning to travel like Europeans travel,” one travel agent said.

Airlines are heavily into promotions. Only recently Pan Am offered passengers who fly round trip to Europe the opportunity to “take along a friend” at half-fare.

With prices sky high in Europe--the dollar buys roughly 30% less than it did a year ago--many Americans will be dining in neighborhood restaurants where the price of a meal is on a par with reasonable restaurants in the United States.

“The rule is to dine where the Parisians dine,” Goranin said.

Europe suffered one of its greatest defeats in 1986 after airport violence and the hijacking of the Italian cruise liner Achille Lauro. Afterward, cruise ships sailed for other waters. Now they’re returning to the Mediterranean and the Aegean with surprisingly strong bookings.

Martin B. Deutsch, publisher of Frequent Flyer magazine, joins other industry authorities who advise travelers to buy the prepaid tour. “It’s absolutely necessary if you’re on a budget,” Deutsch said.

Like Deutsch, Eric Friedheim, publisher of Travel Agent magazine, spoke out in favor of the prepaid tour to avoid “hidden surprises.”

Friedheim strongly urges Americans to travel in the countryside where accommodations are often available for as little as $20 a night. “Make your travel agent come up with rates that won’t break you,” he said.

Echoing Goranin’s sentiments, Friedheim said the traveler can dine reasonably “in all the countries of Europe” by avoiding major hotels and popular restaurants.

Those replying to the Times poll made these other observations:

--Australia with its Bicentennial celebration will be welcoming large crowds in ’88. Applications for visas are “staggering,” according to the Australian Tourist Commission.

--Mexico figures to be a runaway favorite with Americans due to the healthy exchange rate of the dollar.

--Likewise, Canada, with its favorable dollar exchange, is anticipating a near-record number of Americans.

--Cruising is expected to grow enormously in 1988 with the introduction of new ships for a total of 73,000 berths.

--Hotels in Dublin will be heavily booked due to the Dublin Millennium.

--Africa is expected to do well, particularly on the heels of the 1986 hit movie, “Out of Africa.”

--Germany’s “WunderHotels” program, with rates as low as $40 a night at any of 90 participating hotels, will attract a healthy share of the American market.

--South America is showing progress, with the per diem cost of travel remaining reasonable. Countries heading the list include Argentina, Brazil, Chile, Ecuador and Peru. In Central America the leaders are Costa Rica and Guatemala.

--North America will be bullish in ’88.

--Travel leaders warn that Japan continues to be outrageously expensive.

--The Caribbean is expected to hold the status quo.

--With South Korea hosting the Summer Olympics from Sept. 17 to Oct. 2, that country is gearing up for a record year.

Speaking of Olympic fervor, Jerry Picolla of the Pacific Area Travel Assn. disclosed that hotels in Seoul are being booked months ahead of the Games.

In Asia, Picolla called Thailand the “new star in the sky” because of its development of hotels and tourist facilities in Bangkok and outlying areas. Other popular places in the burgeoning tourist trade continue to be Bali, Singapore, Malaysia, Hong Kong and China.

One of the hottest buys among travelers to the Orient is an eight-day, $899 Hong Kong package that includes round-trip air fare from Los Angeles, airport transfers, hotels and sightseeing. At the same time, Tyler Tanaka of Japan & Orient Tours announced a nine-day Hong Kong/Bangkok package for $1,319 with similar features.

Because of the October stock market crash, Tanaka expected sales to be down. Instead, his Orient business is up 22% over last year. “I’m pleasantly shocked,” he said.

For reasons he finds difficult to comprehend, travel to Hawaii is soft, according to Ed Hogan, whose company, Pleasant Hawaiian Holidays, delivered an average of 1,000 mainlanders daily to the Islands in 1987. “Since Black Monday (Oct. 19), it’s been a wait-and-see attitude,” Hogan said. “Travelers seem to be making last-minute purchases rather than planning ahead.”

One of Hogan’s hottest items: a seven-day, $399 package that includes round-trip air fare, hotel, transfers and a visit to a neighbor island. At the same time, Condo Resorts International revealed its own incentive with a $562 package involving round-trip air fare to Maui, seven nights at the Coconut Inn and a car for a week.

Due to the healthy exchange rate of the dollar versus the peso, Mexico is looking forward to a record tourist season. Cancun, with 20,000 rooms on the Mexican Caribbean, is the front runner. Others: Puerto Vallarta, Mazatlan, Manzanillo, Ixtapa and Acapulco.

South of Acapulco, the new resort development at Huatulco is drawing other vacationers. Mexico expects to host more than 6 million visitors this year, compared to 5.4 million in ’87. Said Alberto Abdo, director general of the Mexican Government Tourism Office: “1988 will set an all-time record.”

Bargain hunters are traveling beyond Mexico to Costa Rica, where rooms in a top hotel in the capital of San Jose are pegged at $50 and a cabin on the beach is available for as little as $13 a day.

Growth Outlook

Although many travel agents forecast a boom in 1988, travel consultant Michael Alford disagrees. With the exception of the United States and the South Pacific, he envisions slow growth for 1988, basing his outlook on the poor health of the dollar.

On a trip to London, Alford told of paying $8.95 for a continental breakfast “and it wasn’t even in a deluxe hotel.” When his wife visited Harrods department store, she came away without spending a shilling. “Prices are cheaper at home,” Alford said.

He named London, Paris and Tokyo as the world’s most expensive cities. Speaking of Europe, he suggests avoiding hotels in major cities in favor of condominiums or apartments in the countryside. Alford’s list of reasonably priced destinations includes Greece, Portugal, Yugoslavia and Turkey.

Contrary to scare stories about London, Bedford Pace of the British Tourist Authority points to a British Airways tour costing $210 that features hotels for six nights, daily breakfasts, three theater tickets and a London Explorer Pass, which is good for unlimited travel by bus and the Underground. At the same time, Dollarstretcher is booking round-trip flights to London for $549 aboard British Airways 747s.

Paul Albrecht, chairman of the 47-member U.S. Tour Operators Assn., said that bookings for his own company, Globus-Gateway, are running ahead of 1987, with Britain among the leaders. A 16-day tour with Globus-Gateway costs $69 a day in the high season, including first-class hotels, several meals, an escorted motor coach and a ferry ride between England and Ireland. “The reason our customers aren’t worrying about the dollar,” he said, “is because they are buying prepaid tours.”

Travel Picks Up

The year began on a low-key note for many. “I was pessimistic,” said Scott Supernaw of Olson Travel World, whose bookings are now coming in so rapidly that he’s adding additional space to his tours. Supernaw tells of an 18-day rail journey, London to Istanbul, for $3,998 that features a couple of days in London, dinner in Paris, a cruise on the Danube and visits to Bulgaria and Turkey.

Among the year’s deluxe productions is a 28-day around-the-world golf tour that prices out at $28,000, or $1,000 a day, for privileges at courses in Tokyo, Hong Kong, Bali, Bangkok, New Delhi, Nairobi, Rabat and Gleneagles in Scotland. The tour, produced by Hemphill-Harris of Encino, leaves Los Angeles Sept. 3.

Company President Ron Harris described his Egypt tours as surprisingly popular. Other strong destinations on Harris’ list: Europe (particularly Eastern Europe), Africa, China and Central Asia.

Strong advance bookings are reported for TWA’s Getaway programs. Because of increased business, the airline is scheduling hundreds of departures from the United States to dozens of points in Europe, along with others in the Bahamas, Puerto Rico and Hawaii. Among Getaway offers: 8 days in London and Rome, $348; 8 days in Paris, $398; 10 days in Spain, $448; 10 days in Munich, Salzburg and Vienna, $748, and 15 days in Greece/Turkey, $798. One of TWA’s hottest tickets is a one-week Londoner package for $298. The payment deadline is March 31. After that, the price goes to $398. Information on these and other Getaway Vacations: (800) 438-2929.

Also on the bargain list is a Cosmos two-week tour of England, Belgium, France, Switzerland, Austria, Italy, Liechtenstein and Luxembourg for $528/$618, which includes transportation, several meals and the round-trip Channel crossing. Cosmos is getting good response to a two-week tour of Turkey for $537 and a 28-day swing through Europe for $1,168/$1,224.

Among the companies guaranteeing prices--even with the threat of the shrinking dollar--is American Express, whose increases are averaging barely 4% over 1987. An 18-day tour of France, Monaco, Italy, Switzerland, Germany, the Netherlands and Britain prices out at $2,045, including sightseeing, hotels, 23 meals, transfers, tips and taxes.

Likewise, the company is getting good response to a 14-day tour of Italy, which is pegged at $1,175. American Express describes Mexico and South America as “good value” destinations and points to an eight-day visit to Peru for $375/$425.

What’s Hot at Home

Statistics compiled by American Express reveal that the most popular U.S. cities are Washington, Honolulu, Los Angeles, Denver, San Francisco, New York, Atlanta, New Orleans and Orlando, Fla., the home of Disney World.

In an effort to even up the spending by Americans overseas, the U.S. Travel Service is counting on nearly 30 million foreign arrivals this year, according to the deputy undersecretary for travel and tourism, Eric Peterson. The United States, he said, figures to earn more than $20 billion from overseas visitors.

Meanwhile, in the bargain corner, Trafalgar Tours is promoting a 23-day tour of France, Spain and Portugal for $1,350 and a 36-day tour that takes in the Netherlands, Germany, Austria, Italy, Yugoslavia, Greece, France and Switzerland for $2,160.

Even in light of the Palestinian situation, Israel is campaigning to attract visitors for its 40th anniversary year. In cooperation, El Al Israel Airlines is offering a five-night, six-day package for $40 that includes hotels and a rental car.

In the higher-scale market, Maupintour announces that its bookings are up 28% over 1987. One of its popular offerings is a 15-day swing through Austria and Germany for $2,998. At the same time, tourism to the Soviet Union is booming, with a 100% gain in bookings over 1987, a Maupintour representative said.

Goranin of the American Society of Travel Agents said the Soviets are rapidly “becoming capitalists” as prices rise dramatically. Thousands of Americans have already booked trips, and space is becoming difficult to obtain.

Said Goranin: “The public relations campaign by Mr. Gorbachev is paying off.”