Article: Soft Economy Hurts Travel Industry

By Brett Zongker • The Associated Press • July 17, 2008

WASHINGTON – It seemed like a can’t-miss tourist attraction that would pull in visitors to the nation’s capital: a new Madame Tussauds wax museum.

But since opening last fall, the attraction featuring likenesses of Barack Obama and Hillary Clinton – among many others – hasn’t been a big enough draw.

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Crowds dwindled after the opening, and Madame Tussauds is cutting prices. Adult tickets, previously selling for $21.15, have been lowered by more than $3, and local residents will be offered even better deals.

In a soft economy, Madame Tussauds and other businesses in the tourism industry are starting to feel the pinch of high gas prices and dwindling home values.

Big cities such as New York and Washington may attract more foreign visitors, thanks to the weak dollar, but ticket sales can be erratic, and Americans are thinking about fewer, shorter, less-expensive trips.

“We’re really in kind of tenuous territory,” said Suzanne Cook, research vice president at the Travel Industry Association.

A recent Rand McNally survey says two-thirds of Americans planning road trips this summer are either altering their plans to shorten their trips or canceling altogether.

AAA said the number of Americans driving more than 50 miles over Memorial Day weekend fell 1 percent this year. Air travel has declined slightly as well, AAA said.

In the casino capital of Las Vegas, things already are tough.

Room occupancy rates have fallen slightly, forcing casinos to lower hotel room prices.

Gambling giant MGM Mirage Inc. and local casino operator Station Casinos have cut their work forces.

Las Vegas Sands, which opened a massive new casino on the Strip in January, unexpectedly swung to a loss of $11.2 million in the first quarter of the year.

The skittishness among American tourists is also rippling overseas.

The number of Americans in Britain declined slightly last year, according to the government-funded Visit Britain, and those who have come to the country have spent less money.

A Continental Airlines cabin crew from Ohio, peering through the gates at Buckingham Palace recently on a 24-hour layover in London captured the mood. Amy Nalepa said their flight from Cleveland was quite empty.

“Who can afford this?” she said. “I changed 50 bucks and got 22 pounds. And that got me lunch.”France is seeing a similar trend. About 12 percent fewer Americans have visited the country since January versus the same period in 2007, said Christine de Gouvion Saint-Cyr, a top official at the Paris Office of Tourism and Trade.“In 2008 we are being very cautious and attentive, because at any time the impact can take effect,” Saint-Cyr said.