"Double jeopardy" facing travel industry in H1N1 travel fears

By Sheilah Downey

The travel industry could face a "double jeopardy" of negative impacts if  the sluggish economy is also hit by swine-flu fears of traveling, says a health economist from the University of Alabama Birmingham.

"Tourism and travel are vitally important sectors in the economy of many U.S. cities and communities," said Dr. Bryce Sutton, of the UAB school of business, in a release issued today. "Depending on the severity of the spread of the virus, consumers and businesses may respond by restricting travel and vacation plans, which would dampen an already weak recovery in these areas."

The American Automobile Association estimates as many as 60 million people travel 50 miles or more from home during the peak season, the Christmas and Thanksgiving holidays.

Airlines, hotels and other service industries, already feeling the sting of tightened consumer spending, could be doubly hit if people stay home because of the H1N1 virus, Sutton says.

"Although business managers have had time to prepare contingency plans,"
he said, "those that already have cut the numbers of employees in an effort to reduce costs during the downturn may be the hardest hit."

If travelers opt to stay home, says Sutton, it could stall already-weak GDP growth in the third and fourth quarters of 2009.

The Asian SARS outbreak in the early 2000s led to a regional loss of between 0.5 and 2 percent of the GDP, Sutton said.

"H1N1 impact predictions are based on examples like this one in which virus fears traditionally have had a negative influence on the economies of impacted regions."

The response of health agencies to the threat of the H1N1 virus has been better than the SARS response, he said, which may counter some of the negative impact.