http://www.latimes.com/business/printedition/la-000079615oct05.story?coll=la%2Dheadlines%2Dpe%2Dbusiness

41,000 Jobs in Tourism May Be Cut

Travel: L.A. County could see $2-billion drop in tourist spending, officials say.

By MARLA DICKERSON TIMES STAFF WRITER

October 5 2001

Calling it a crisis of "enormous human dimensions," local tourism officials project Los Angeles County will lose 41,000 jobs and $2 billion in travel spending because of the Sept. 11 terrorist attacks.

About 40% of the county's unionized hotel workers, or 3,500 people, already have been thrown out of work or seen their hours reduced as hotels scramble to slash costs in response to the plunge in visitors. Industry veterans who have watched L.A.'s tourist trade pummeled by past recessions, wars and riots say the sudden drop is unlike anything they've ever seen.

"The scale of this thing is hard to come to grips with," said Michael Collins, executive vice president of the Los Angeles Convention and Visitors Bureau. "Most of these folks are hourly workers with no safety net." Collins said the decline in travel spending will have a major effect on government coffers. Hotel bed taxes alone generated $103 million for Los Angeles last year. Collins said he expects that number to be down at least 15% in 2001.

Like other major tourist cities, Los Angeles has been hammered by the falloff in business and leisure travel after the events of Sept. 11. But L.A. has been hit particularly hard because of its reliance on foreign visitors, who are staying away in droves. Though foreigners made up 22% of the 24.7 million visitors to the county last year, they accounted for nearly a third of tourist spending.

The latest projections indicate that the number of tourists from Mexico and Canada will drop by 15% through the end of the year while the number of visitors from overseas markets such as Japan and Australia will plunge by as much as 60%.

Based on the steep declines in visitor counts in the fourth quarter and predicted softness in the first half of 2002, the bureau projects a $2-billion drop in travel spending between Sept. 12, 2001, and June 30, 2002. That's a 15% decline from the $13.6 billion spent by visitors in 2000. Fewer tourist dollars mean smaller employment rolls for hotels, restaurants, theme parks and other related businesses, which are projected to shed 40,850 jobs, or 14.6% of the county's tourism-related employment.

Tourism-related businesses nationwide are clamoring for government assistance similar to that given the airlines. Collins said the bureau isn't seeking a handout. Rather it's looking to the state to spend heavily on tourism promotion to get Californians traveling throughout the Golden State.

Last week, Gov. Gray Davis said the state would contribute $5 million toward such an effort. But Collins and others say more is needed in light of what other destinations are doing. Las Vegas, for example, just launched a $13-million campaign aimed at luring visitors back to the gambling mecca.

The loss of big-spending international visitors has local tourism officials struggling to fill the gap. Executives from downtown hotels, restaurants and attractions are holding an emergency session next week to come up with ways to promote downtown Los Angeles to the so-called drive market in the surrounding region.

Hotels in downtown have been among the most severely affected by the tourism swoon, said Los Angeles hotel consultant Bruce Baltin of PKF Consulting. He said occupancy was already down about 4% in the first half of the year because of a slowdown in business travel. In the wake of the terrorist attacks, he projects downtown hotel occupancy in the fourth quarter to be down 25% to 30% from where it was last year, when it was about 70%.

"The profit hit is going to be dramatic," Baltin said. "And when profits bleed, they've got to cut costs, and that means people."

David Koff, senior researcher for the Hotel Employees and Restaurant Employees Union, said 40% of the county's 8,700 unionized hotel and restaurant workers have been laid off or had their hours slashed. He said the union is scrambling to set up food banks and other assistance for workers stunned by their industry's dramatic downturn.

"You've heard of the domino effect," Koff said. "Well, this is the anvil effect. . . . It's absolutely unprecedented."

-- Martin Thompson (mthom1927@aol.com), October 05, 2001

Answers

I wonder when all of this is going to hit the fan, and jar the stock market.

-- Uncle Fred (dogboy45@bigfoot.com), October 06, 2001.

This is only the tip of that big block of ice. Tourism around the country is staggering, to the point of seriously effecting the whole American economy.

-- Art Esman (artesman@wetwo.com), October 06, 2001.

I have to agree, that investors seem to be asleep on this one.

-- RogerT (rogerT@c-zone.net), October 06, 2001.

They even had an article in the Arizona Republic about how the golf courses have been affected here in the Phoenix metro area.

Its such a big IF scenario. The longer we go without another terrorism incident the more travel and tourism will resume its previous levels. However, if we have a confirming incident, it will spell doom for those industries. The Greyhound bus incident doesn't really count, because the thug was a Croatian and we have plenty of common, ordinary thugs (not to be confused with terrorists).

-- Guy Daley (guydaley1@netzero.net), October 06, 2001.

This is 41,000 jobs lost in Los Angeles County alone, not the whole state. Throw in San Diego, San Francisco, Sacramento, Orange County, etc. and many working souls could get a little paranoid.

-- Ken (n4wind@sonic.net), October 06, 2001.