NATIONAL REPORT? Lodging analysts are projecting summer leisure travel could take a significant hit in North America and Europe if growing tension and a possible escalation of the Balkan war continues to result in cancellations and delays of overseas trips. Travel agents, tour operators and analysts are closely watching the situation which PricewaterhouseCoopers (PWC) anticipates will result in a major drop-off in travel if NATO ground troops are deployed to combat areas or if terrorist activity tied to the conflict erupts anywhere around the globe. Analysts point out that Americans as well as Europeans are growing increasingly edgy about travel as images of Kosovar refugees and war-torn Yugoslavia appear daily in newspapers and on television and the Internet. Alastair Graham, Hungary-based chief of Central and Eastern European operations for the PWC hospitality and leisure group, said that a U.S. troop deployment would likely involve the use of civilian commercial aircraft which would cut the number of leisure flights to Europe. The Federal Aviation Administration is maintaining its ban of U.S. civilian aircraft over the Balkan combat zone, causing United, Delta, British Airways, Lufthansa, Austrian Airlines, Lauda Air and Tyrolean airlines to reroute or cancel flights in the region, according to Graham. PWC also reported that a minimum of 13 cruise operators have rerouted or canceled passage along the Danube and other waterways near the hostilities. PWC is estimating $100 million in total losses for travel, tourism and lodging operations if the conflict runs into summer and beyond. ?The war comes during what would have been a very strong tourism summer for all of Europe,? Graham said. ?For example, in Hungary, which abuts the conflict, hotel guests in January and February were nearly 420,000, almost one full percent above the year-earlier period. There are exciting new hotel projects still underway in Hungary, including a new Four Seasons,? Graham continued. ?As of now, August?s Budapest Grand Prix, which is a major tourist draw, is still scheduled to take place.? Not everybody is sitting tight, however, as some Europeans have continued to take both business and leisure trips in countries close to the fighting. German travel to Hungary, according to PWC, remains consistent. However, if ground troops are deployed or terrorist activity in conjunction with the conflict is reported, PWC expects that to change. Dana Kalczak, manager of design and construction for the Four Seasons project in Budapest, told HOTEL BUSINESS? that the project is on schedule and so far has not being affected by the instability in the region. The crisis is having an impact on those working on the hotel project which is still in the schematic stages. Supplies and equipment are not yet an issue, but travel restrictions could ultimately affect the project if the crisis drags on. ?We?re doing the jobs at hand and we hope for a resolution to this as soon as possible,? Kalczak said. As a result of the ancillary tension surrounding the hostilities, some Americans are hesitant to travel by air? domestically or internationally? as television coverage of anti-American demonstrations has sprouted fears of terrorism, a phenomenon reminiscent of the Persian Gulf War, which crippled the hotel industry eight years ago. Overall, however, Americans are not expressing the same amount of fear associated with Balkan-inspired terrorism as they did about terrorism associated with the Gulf War. Travel agents are reporting cancellations to destinations such as Italy, Greece, Turkey and even Russia. Analysts say some tour companies have reported less than half the bookings this year compared to the same period in 1998. Others have reported steady business to Greece and Turkey but agree that trips to Italy are down, possibly because American military operations are based in Aviano. Destinations farther away from the conflict seem to be unaffected, with travel to Weste
