Forecast: Travel

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The travel industry was hard hit by the events of Sept. 11. But airlines and hotels are slowly recovering, and so, cautiously, are their ad budgets.

"There's a deep well of goodwill on the part of con-sumers," said Brad Fay, managing director of Roper ASW, which has done research on hotels and airlines reputations among consumers. "I see no reason to pull back on advertising," he said. " Attitudes tend to lead behavior."

Ad spending in the summer and fall will be spotty while the industry is still in recovery, said Peter Yesawich, president of Yesawich, Pepperdine & Brown, Orlando, Fla., a marketing services firm specializing in the travel industry. According to Mr. Yesawich, by early 2003 spending levels will be back to those of 2000, assuming no dramatic economic event. In the meantime, there may be a shift from brand advertising to a mix of brand and retail advertising, he said.

Frank Werner, associate professor of finance at Fordham University, said, "As the economy recovers, airlines and hotels will recover. I think there will be a reasonable amount of advertising in the coming months." He said the travel industry will be 90%-95% recovered by 2003. "If airlines don't advertise, they'll have even lower profits. They have a sense of how much advertising fills seats."

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