Suddenly, The U.S. Is Everybody's Oyster

At dusk, along Miami Beach's steamy oceanfront, a crew of multilingual waiters routinely scouts for foreign tourists to fill seats at a restaurant named A Fish Called Avalon. When maitre d' Jack Donahue hears a group of tourists speaking German, a waiter moves in to translate the day's menu. It's a fruitful endeavor. "In the past month, business has been up 300% because of the internationals," says Donahue. "That has really helped our morale and changed our attitude."

The Persian Gulf war had depressed travel, but now foreign tourists are flocking to the U. S. in record numbers. By the end of 1991, some 42 million foreign tourists are expected to touch down in cities from Washington to Wichita--and to have spent a hefty $57 billion. For the third year running, foreign tourism will generate more foreign earnings for the U. S. than such big-ticket exports as agricultural products and cars (table). Last year, foreigners spent $3.1 billion more in the U. S. than Americans did overseas. As recession-crimped domestic travel limps along, foreigners will be even more important. "Foreign travel is sustaining the hospitality industry," says Michael Fisher, executive vice-president of Allied Tours in New York.

Few would have thought so six months ago. When the bombs began dropping in the Mideast, foreign tourism plummeted. Fears of potential terrorist attacks emptied airports and hurt the tourist industry in many U. S. cities. In Los Angeles alone, would-be vacationers from Japan, Britain, and Germany canceled bookings at a 50% to 90% rate, according to the Los Angeles Visitors & Convention Bureau.

But tourists reappeared in time to witness America's victory celebrations. Arrivals at Miami International Airport, which dropped 13% during the war, rebounded by the same amount in late April and May, the latest months for which figures are available. Karl Fahr, chief of the U. S. Travel & Tourism Administration's Frankfurt office, says he expects a record 1.2 million Germans to travel to the U. S. this year. And London-based Thomas Cook Travel agency estimates that the number of British citizens visiting the U. S. will top 1 million in 1991, a 25% increase over 1990.

The steady influx is timely for U. S. airlines. Saddled with big losses during the war, the airlines hope to load jets with overseas passengers to cut some of the red ink. Continental Airlines says its Frankfurt-to-Newark route, which began on June 14, was 80% full. United Air Lines reports that international flights are up 10% this year, while Delta Air Lines has added five daily flights from Europe. For the first time ever, American Airlines is advertising on European television and offering discounted fares, in an effort to undercut European lines.

DOLLAR FEVER. Not all U. S. destinations have a cheery story to tell. In Orlando, Fla., home of Disney World, hotel occupancy rates are lagging, thanks partly to a decline in domestic visitors. One tourism expert, Abraham Pizam, a professor at the University of Central Florida, says foreign tourists will not make up for the loss of U. S. guests "but will just keep it from being worse."

The main allure for foreigners is the cheap dollar. Although the dollar has strengthened in the past few months, the exchange rates are still favorable--and they encourage affluent foreigners to spend, spend, spend. Busloads of foreigners arrive regularly at the two sprawling Tower Records in New York City and "they buy in quantity," says Jan Weaver, a supervisor in the rock section. While the typical American spends around $25, "sales can run $200 to $500 for a foreigner," she says.

The deepest pockets belong to the Japanese, who dish out seven times more than other foreigners on such goods as jewelry and clothes, according to the U. S. Trade & Tourism Assn. Tiffany's in Vienna, Va., keeps special hours just for Japanese tour groups, who are even served breakfast, Japanese-style.

The rates are even making the U. S. accessible to less-affluent foreigners. Take Klaus Samstag, who was visiting Miami Beach with his buddy from Frankfurt. "I'm an auto worker, and he's a meat packer," says Samstag. "That's pretty ordinary, but now we can afford to come to America."

To encourage foreign travelers, U. S. resorts are more aggressively marketing to overseas tour operators, who book huge blocks of hotel reservations, airline tickets, and tours. Walt Disney Co., which already has an office in London, opened a branch in Milan last year. And Anheuser-Busch Cos., the operator of four theme parks in Florida, recently hired a promoter in Frankfurt. The little guys are also vying for a piece of the action. After hiring a British public-relations firm, Ian Schrager is now producing television commercials to promote his Barbizon and three other New York hotels to travelers from Franceand Britain. "Anything to generate foreign business used to be an afterthought," he says. "Now, it's a third of our budget."

But most foreign tourists already know where they want to go. The British head for Florida's beaches. The Japanese prefer Hawaii. The Germans are inclined to rent a car and drive across country. The Scandinavians prefer culture and shopping on the East Coast. Many are popping up in offbeat places. Some Germans and French, who formed "cowboy and Indian" clubs, mosey over to Native American reservations. Indeed, the fastest-growing U. S. tourist destination is Kansas, according to the U. S. Travel & Tourism Administration. It no longer is necessary to export those amber waves of grain to rake in money from overseas.

      Industry                 1990 sales
                              Billions of dollars
      FOREIGN TOURISM                $51
       AGRICULTURAL GOODS            40
       CARS                          37
       CHEMICALS                     36
       CIVILIAN AIRCRAFT             32
       COMPUTERS                     26
       METALS                        23
       CONSUMER DURABLES             21
       TELECOMMUNICATIONS            10
Before it's here, it's on the Bloomberg Terminal.