Foreign Tourists Miss the Bus


Fourth of July has come and gone. It's officially summer, and foreign tourists should be streaming by the busload to see Graceland, Elvis Presley's estate in Memphis. Indeed, a third of the 600,000 people who typically arrive every year to pay homage to The King of Rock 'n Roll come from outside the U.S., with the biggest numbers in the summer. This is not a typical vacation season, however. The number of foreigners at Graceland was off by 25% in June -- the 25th anniversary of Presley's death.

The dollar may be weakening while economies around the world are showing signs of an upturn. But the trends are doing little to turn America back into a tourist destination. Still frightened by the terrorist attacks of September 11 -- and anxious that another could happen -- foreigners are staying away. And barring a last-minute upsurge in international travel before Labor Day, when the peak season for international visitors ends, 2002 could be the second down year in a row.

"CLIMATE OF FEAR." The fear factor seems prevalent worldwide. Estimates from Japan are that trips to the U.S. in July will fall by 50% from a year earlier -- on top of a 20% annual decline in 2001.

Europeans are avoiding the U.S., too. Nouvelles Frontieres, a big French tour operator and travel agent, reports a 15% to 20% drop in the number of tourists visiting the U.S. of A. this summer. Spokesman Christian Rochette blames a "climate of fear" fueled by warnings from U.S. authorities of new terrorist attacks. "That sort of thing isn't exactly an advertisement for travel to the U.S.," he observes.

Likewise, the falloff in international tourism seems to be hurting virtually every big U.S. travel market, from New York to Las Vegas and from Orlando to San Francisco. In New York, tourism officials reckon that the number of non-U.S. guests at the city's hotels is down at least 10% this summer. Based on air traffic, the volume of foreigners coming to Las Vegas is off that much as well.

"IN THE TOILET." Nowhere does the decrease seem steeper, though, than in the big national parks in the West. At the Grand Canyon, National Park Service officials estimate that at least 40% of the 5 million people who visit each year have come from Japan, Germany, and other foreign countries. This summer, however, visits by buses -- a good proxy for foreign tour groups -- are running 35% below 2001's level.

Local businesses are suffering as a result. The tally of walk-ins to the visitors center in Flagstaff, Ariz., is the lowest since 1990, and more than two dozen local shops and eateries have closed since last fall. Wild fires scorching Arizona have made matters only worse, even though they're hundreds of miles away.

"We've seen big declines from the European market, and the Japanese market is in the toilet," moans a helicopter-tour operator based in Las Vegas. Adds Bruce Kittrell, owner of the Bar BK Muleshoe Dude Ranch in Prescott, Ariz.: "It has been a real headache for our whole economy."

ELVIS LIVES. If there's a silver lining, it's that domestic travel is rising, as Americans also stick closer to home. New York attracts some 37 million visitors a year, with almost 20% -- or more than 6.5 million-coming from outside the U.S. That makes it the nation's No. 1 destination for foreigners. Despite the decline in foreign tourism in New York, overall hotel occupancy rates are expected to be off only 2.5 points, thanks to a steady flow of U.S. tourists, according to NYC & Co., the tourism industry's group in New York.

Graceland is holding its own, too, with more Americans driving to Memphis and making up for the shortfall in vacationing foreigners. "We've been the beneficiary of a lot of plane trips that have turned into car trips," notes Jack Snoden, CEO of Elvis Presley Enterprises. Total visits have slipped just 2.5% in 2002.

To win back foreigners, tourism officials have been hitting the road themselves. City boosters and delegations from the U.S. Commerce Dept. have gone to Berlin, Tokyo, and Hong Kong over the last few months to try to drum up visitors. And for good reason: Tourism is one of the few industries that generate a trade surplus for the U.S., with foreigners spending almost $8 billion more in the U.S. in 2001 than Americans do abroad.

SAVE SOME FRANCS! Some foreign travel companies also are pushing the American experience. Nouvelles Frontieres recently began urging French vacationers to think again about flying to the U.S. "For a good travel plan, one should not be afraid of paradoxes," goes the firm's new pitch. "If a destination is a bit avoided by the public (beyond real questions of security), it's often a good time to go there. Today, that's the case for the USA." Nouvelles Frontieres also points out that with the dollar's decline against the euro, a U.S. vacation is cheaper than in 2001.

It's a tough sell, however. The Commerce Dept. reports that international travel to the U.S. plunged 11% in 2001, to 45.5 million visitors, with the sharpest declines from Germany, Japan, and Britain. Traffic from Britain is rebounding. But the rest of Europe is coming back more slowly, particularly Germany, and the number of tourists from Japan and Asia is still well below year-earlier levels. Moreover, Commerce officials forecast that overall numbers probably won't be back to 2000 record levels until 2004.

When it comes to tourism, September 11 has cast a long, long shadow. By Michael Arndt in Chicago


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