Despite discounts, travel spending takes a holiday

Despite bargain air fares, cheaper hotels and theme park discounts, Americans and foreign visitors have cut U.S. travel spending to the lowest level since the terror attacks of 2001, new government and industry statistics show.

The U.S. Department of Commerce reported this week that travel and tourism spending dropped in 2008, and plummeted at an annualized rate of 22% in the last three months of the year.

The industry downturn -- the result of extreme consumer belt-tightening in the midst of bank failures, high unemployment rates and a worsening recession -- appears to be continuing. On Thursday, a summer airfare war began among the nation’s carriers. On Friday, the state reported that 14,800 leisure and hospitality jobs were lost in February, and an airline industry group said passenger revenue was down 19% last month compared with February 2008.

In California, the bad news rippled its way through a once-thriving tourist economy, bringing with it higher hotel vacancy rates, shorter lines at amusement parks and empty tables at restaurants.



At Knott’s Berry Farm in Buena Park, “we’ve been seeing the effects of the economy last year. We are still seeing it now in 2009, and it’s tied to what people are spending in the park,” said Jennifer Blazey, spokeswoman for the 185-acre theme park.

Although she would not disclose attendance records, Blazey said the park has been feeling the pinch and that it was launching a new deal this weekend to attract recession-weary vacationers: For $39.99, adults gain entrance to the park, plus access to an all-you-can eat barbecue buffet with hamburgers, hot dogs and other backyard summer dishes.

Doing what they can to ride out the tough times, hotel owners, restaurant managers and other tourism businesses have responded by offering historically low prices on vacation deals.


At the Hotel Del Coronado, a 120-year-old high-end resort on the sun-splashed oceanfront peninsula near San Diego, guests can now book one night and get 50% off the second night, a deal rarely offered by one of the most luxurious hotels in the region.

“It is unusual for us,” said Barry Brown, director of marketing for the 679-room hotel and the adjacent 78-room Beach Village. “It’s as much a way to kick start the consumer psyche as anything. We just want to give people a reason to get away.”

As of the second week in March, the occupancy rate at hotels nationwide sank 15.7% to 55.2%, compared with the year-earlier period, while lodging rates fell 11.2%, according to Smith Travel Research, a lodging industry research firm.

In the Los Angeles market, the hotel occupancy rate dropped to 56% in December 2008 from 62% in the year-earlier month, according to Smith Travel Research.

At Starline Tours, the 74-year-old Los Angeles-based tour bus company, bookings from local hotels were down about 10% in the last month.

Klaus Ritter, a spokesman for the company, said February has always been a slow month.

During these slow times, the tour company operates about 15 to 20 tour buses, Ritter said. But in the summer, as many as 100 buses will cruise by Hollywood landmarks and celebrity homes.

“We think [business] will start to pick up for spring break” when the weather is warmer, he said.


At participating Los Angeles County eateries, the 2009 dineLA Restaurant Week promotion was scheduled to run only for two weeks, the last week of January and the first week in February. But the fixed-price menus -- starting at $16 for three-course lunches and $26 for dinners -- offered at the 175 participating restaurants were so popular that 125 restaurants extended the special offers through the rest of February.

“I think people were really hungry for deals,” said Robin McCain, a spokeswoman for the Los Angeles Convention and Visitor’s Bureau, now known as LA Inc.