Travel Sector Shaken but Steady

The deadly bombings in London initially stoked fears of another jolt to the travel industry Thursday, but airlines and tour operators reported near-normal operations for their services in London and elsewhere.

“We’ve had no cancellations,” said Becky Powell, reservations director at Brendan Worldwide Vacations, a Chatsworth-based operator that typically has 300 to 400 customers touring the London area each day during the summer.

Stocks of airlines, hotels and other travel-related firms dropped in early trading after the blasts. But the shares later recovered as some analysts predicted that, barring another incident, travel shouldn’t be seriously affected.

A Bloomberg News index of 31 travel stocks -- including airlines, cruise lines and hotel companies -- fell as much as 1.9% in early trading but ended the day with a 0.3% gain.

“We believe today’s events in London are unlikely to result in any major short- or long-term impact on the U.S. travel industry,” analyst Marc Falcone of Deutsche Bank Securities Inc. said in a report to clients.

He also noted that “U.S. hotel companies’ exposure to the U.K. lodging market is minimal.”

London service is anything but minimal for major U.S. airlines, but most said their London flights operated with little disruption Thursday.

However, “we can imagine the potential for delays in London with everything going on there,” said Tim Wagner, a spokesman for AMR Corp.’s American Airlines, whose service includes two daily flights from Los Angeles International Airport to London’s Heathrow Airport.

The carriers reported few cancellations, “although we’ve received a lot of phone calls from travelers asking questions,” said British Airways spokesman John Lampl. British Airways has three daily flights from LAX to Heathrow.

American, British Airways, UAL Corp.’s United Airlines and other carriers temporarily allowed passengers flying to and from London to change their flights or travel dates without a penalty fee.

John Severini, president of Trafalgar Tours’ Anaheim-based U.S. division, said the bombings prompted several customers to call about whether their flights would be disrupted, but “we’re experiencing virtually zero cancellations, nothing out of the ordinary.”

Despite the restrained response by travelers, experts said that London could still experience a small, short-lived dip in its tourism. Travel industry officials noted that trips to Spain waned slightly after the March 2004 commuter train bombings in Madrid that killed 191 people.

Travelers who were in London on Thursday or are scheduled to go there in the next month may be able to file claims if they bought travel insurance policies before the bombings.

Typically, provisions covering trip interruptions and cancellations allow policyholders to recover nonrefundable trip costs, such as airline tickets and tour deposits, if a terrorist attack occurs in a city that they are scheduled to go through within 30 days, said Dan McGinnity of Travel Guard International in Stevens Point, Wis.

People holding such policies may be covered even if they were scheduled to merely pass through a London airport en route to somewhere else, McGinnity said.

But if London isn’t on a traveler’s itinerary and the traveler wants to cancel a trip to another part of England or Europe because he or she is afraid to travel now, trip insurance typically won’t cover the costs.

“Insurance cannot cover a state of mind, “ said McGinnity, whose company covers about 8 million U.S. travelers a year.

Until the Sept. 11, 2001, terrorist attacks, the wording in travel insurance policies concerning such incidents was vague or open to interpretation as to time or place.

Many insurers have since imposed strict limits on the timing and location of attacks that would be covered. At the same time, some insurers that had covered attacks only on foreign soil expanded coverage to attacks in the U.S.

Anyone wanting to purchase a travel insurance policy now to travel to London in the future should be able to do so, McGinnity said.

McGinnity said it was too early to tell how many claims might be filed as a result of the London bombings. But he said call volume to his company was up 30% on Thursday, with the increase split between inquiries about London and inquiries about the storms moving through the Caribbean.

Associated Press was used in compiling this report.