War Worries Take Hold of Travel Industry

Times Staff Writer

Even before the war began, the phones had all but stopped ringing at the Continental Travel Shop in Santa Monica.

After Bush issued his ultimatum to Saddam Hussein on Monday night, the bargain of a $369 round-trip fare from Los Angeles to London couldn't attract much interest.

"It's not the act of flying so much; it's just that people don't want to get stuck," Brian Clewer, who owns the discount airline ticket agency, said Wednesday. "That puts people into a panic."

Travel skittishness has definitely taken hold. Americans have been delaying or canceling trips, fearful of terrorism or because they wanted to be near home when the fighting began.

"The entire travel industry is feeling the effects," Walt Disney Co.'s chief financial officer, Thomas Staggs, said at the company's annual shareholders meeting in Denver on Wednesday.

The industry has been in a deep decline since Sept. 11. Now it's not certain how much further down the war will send it spinning. The best-case scenario: The conflict will be short, there won't be any terrorist attacks and the industry will rebound to its previous pace as Americans reschedule travel they had put on hold.

"After 9/11, most trips were rebooked within one to three months after the attacks," noted Cathy Keefe of the Travel Industry Assn. of America.

Just the threat of a U.S.-led invasion of Iraq took its toll. On Wednesday afternoon, before the bombing began, Continental Airlines announced it would lay off 1,200 people; it had already eliminated 4,300 jobs since Sept. 11. Chairman Gordon Bethune said a long war would mean more job losses, as well as "cuts in service to many small and mid-size cities."

At Travelocity, a travel reservations Web site, "we have a lot of people calling and asking about booking policies and changes," said spokeswoman Amy Ziff. "But they are being careful for now and waiting to see what happens."

Janelle McGlothlin is the kind of nervous traveler who just dropped out. McGlothlin had long planned to leave Wednesday on a China Airlines flight to Nepal to take part in a humanitarian medical mission. To the relief of her family, she canceled.

"I don't think it is good to be traveling abroad as an American right now," said McGlothlin, 31, a freelance copy writer from Los Angeles. "Why put myself at risk as a volunteer when I really don't have to?"

Airlines and travel agencies began preparing earlier this week. On Tuesday, Continental said it would allow customers who purchased tickets for domestic and international travel through May 18 to make a one-time change in travel plans without paying the standard change fee. US Airways implemented a similar policy.

On Wednesday, the Expedia Internet service waived cancellation penalties and other fees on reservations for hotels and rental cars. Callers to Expedia's 24-hour customer service line after the strike against Iraq started heard this recording: "Due to the situation in the Middle East, we are currently experiencing an unusually high call volume and appreciate your patience." Then they were put on hold.

For weeks, Americans had been shying away from travel that involved advance booking, instead opting for car trips, a trend that favors destinations such as California and Las Vegas, said Travelocity's Ziff.

Las Vegas resorts won a reprieve earlier this week when the NCAA decided to go ahead with its annual college basketball tournament. Though none of the games will be played in Las Vegas, the tournament brings droves of sports bettors to town and is one of the busiest weekends each year, said Alan Feldman, spokesman for hotel company MGM Mirage Inc.

"I am sure there will be some impact from what's going on internationally, but at this point it is too soon to tell," he said.

Park Place Entertainment, which owns Caesars Palace, saw a small uptick in room cancellations before Wednesday night, "but nowhere near a deluge," said spokesman Robert Stewart.

Next week, however, Sin City could see a dive in business. The annual Pizza Expo, a gathering of food industry vendors and restaurateurs, is scheduled to start Tuesday at the Las Vegas Convention Center. Show organizer Bill Oakley said that three weeks ago, the conference was headed toward record attendance of 6,000. But several overseas groups then canceled, and Oakley will be happy if 5,000 make it to the confab. Domino's executives plan to attend, but the company will watch developments.

"If we are confident that they can travel safely, they will be there next week," said Holly Ryan, spokeswoman for the Ann Arbor, Mich.-based pizza franchiser.

In Santa Monica, Clewer recalled that after the Persian Gulf War it took two to three months before customers began calling again. This time, he said it would be as long before his business starts to pick up again -- "even if the invasion is quick."

"We'll just have to sit back and bare it."

Times wire services were used in compiling this report.

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