Travel Industry Takes Beating

These are not good times for the travel business.

Political unrest in Tunisia, Egypt, Bahrain and Libya, the high unemployment in the U.S., severe winter weather in January and February in the U.S., soaring gas prices and now the triple whammy of earthquake, tsunami and nuclear crisis in Japan have together taken a heavy toll on the travel industry.

Travel businesses of all sizes have been stung badly by the multiple blows.

While smaller travel agencies and tour operators in the U.S. are either struggling to stay afloat or closing shop, the larger companies are bracing for big losses.

Delta Air Lines is witnessing a big drop in demand and bookings to Japan and has cut capacity in Japan by 15 to 20% through May by reducing the number of flights to Tokyo’s Narita International Airport and suspending service at the city’s Haneda Airport.

Since the Tokyo market generates over $2 billion a year, the disruption could cost Delta $400 million.

Cruises Hit Too
Things are not looking well on the cruise side of the travel business too because of political unrest in North Africa and Middle East.

Carnival which operates Carnival Cruise Lines, Holland America Line and Princess Cruises, is seeing a slowdown in demand for cruises to the Middle East and North Africa.

Carnival COO Howard Frank said on the company’s earning conference call Tuesday that over 280 cruises had to be “reset” or given new itineraries. The changes will cost the company $44 million in lost revenue.