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Economic slump hits tourism industry | Column
The financial meltdown of the last year has had a negative impact on just about everyone.
The travel and tourism industry has been hard hit. The public is reeling from record job losses, stock market turmoil that has caused retirement and other investments to plunge, unfavorable exchange rates, record fuel prices and rising food costs — all of which have made leisure travel a very low priority for most people.
The economic problems our country is facing are highly complex and it will likely be a while before we see it turn around. The continued uncertainty of the job and credit markets creates uneasiness for a lot of people. Small businesses are closing at the highest rate since the Great Depression. Even giant stalwart corporations that have shaped our modern history and lifestyles are in danger of collapse.
We have watched as regional titans like Washington Mutual have failed and a host of national big box stores closing in Federal Way — leaving big holes to fill and as they leave as unemployed people remain behind.
Immediately following the terrorist attacks of 9/11, the travel industry was brought to its knees. Over 70 percent of the travel agencies that were in business before that fateful day are gone. For our agency, we questioned whether we could make it, given the losses we suffered with cancellations and slow bookings in the months that followed. We persevered and made it. I thought that was probably the worst we would ever see.
Little did I know just seven years later, we would be in a situation that is measurably worse. After 9/11, the impact was more temporary. As time went by, people began to travel again because they had jobs, the markets returned to normal in a relatively short time and the general economic burdens we have today were not present then.
Today, the economic situation is much more prolonged and pronounced — and negatively affects a much larger number of people in profound ways.
What does all this bad economic news mean on a day-to-day basis here at home? For us, it is a challenge. We have seen more cancellations of scheduled trips in the past month than we have in the past five years. It hurts to lose the business, but some of the reasons for the cancellations are heart-wrenching.
Several months ago, we booked three couples on a Panama Canal cruise for next February. The couples were lifelong friends and the men worked together at a small metal fabrication plant. They were a fun group, and you could tell how excited they were about the trip. It was their first cruise.
A few weeks ago, the man who organized the couples came into the office. When he came through the door, I could tell something was wrong. None of the excitement or laughter we had seen before was there. I asked him if everything was OK. He replied with a blunt no.
He nearly choked up as he told me that all three couples were going to have to cancel their trip. He told me that the day before, the three men went to work at 7 a.m. At 9 a.m., the boss called everyone together and handed them a check with one week’s pay and told them the business was closing, effective immediately. The man told me he didn’t know what they were going to do. He had been with the company for 24 years since right after high school. Another had been there 27 years and the other 13 years.
He questioned what the future would hold for him at his age, with only one set of job skills since high school and a tough job market. Nothing I could say or do could make it better and as I listened to him, I could put myself in his place and wonder what the future would hold if suddenly I were unemployed.
Other cancellations have been from some of our best customers — who are the bread and butter of our business. These are the recently retired who have the time and resources to take the longer, more extensive trips. For many of these, they retired with what they thought would be a comfortable amount and would have the freedom to travel and enjoy retirement.
As the stock market has plunged, they have watched the value of their retirement accounts plummet. As retirees, this is traumatic as they have no idea how long it will take the market to recover and recoup those losses. For them, they just want to sit tight for a while to see what happens. They don’t want to spend the money until they are more confident. Who can blame them? I certainly can’t. Nonetheless, our business suffers.
While the cancellation rate is one part of the problem, the other is falling prices from higher vacancy rates at resorts and on ships. Without question, that’s good for the consumer if you’re looking for a good deal, but not so good for us, as we earn our commissions on the base fare. Many times we see non-commissionable taxes, government fees, fuel surcharges and other fees higher than the actual base fare. You sometimes feel like the hamster in the wheel running faster and faster and still going nowhere.
For those who do want to travel, the good news is there are some great deals out there to be had. A mental health break would probably be good for all of us in these trying times.
Federal Way resident Jerry Vaughn is president of World Voyager Vacations: email@example.com.