European vacations downsized

Alberto D'Antonio, a lecturer on Italian gastronomy, usually plans his vacations around good food — visiting European wine regions and booking tables at top-rated restaurants.

But because his work was reduced from about six lectures a week to two or three because of the economic recession, he will tone down his summer ambitions.

"The plans are for my girlfriend and me to stay close enough to home to be able to drive," says D'Antonio, 34, "Instead of eating at fancy restaurants, I think we'll get some nice cheese and wine and have picnics."

This is the first August since the recession hit worldwide, so hotels, restaurants and officials are bracing for a sharp drop in business during Europe's most important month for tourism and vacations.

Tourism decline

The World Tourism Organization (WTO) reports that international tourism in Europe is down about 10% the first half of this year, compared with the same time in 2008.

In Italy, national statistics show that residents staying in the country for at least part of their summer vacation make up for some of those losses.

"I think that what we see is that many people are reluctant to give up their vacations altogether but that they do want to take steps to make the vacations more affordable," says Riccardo Lorenzi, an adviser to Italy's under-secretary of State for tourism. "That could mean driving instead of flying, cooking in instead of eating out and emphasizing low-cost activities like time at the beach or in museums."

Tourism is an important economic sector all across Europe but nowhere more than in Italy, France and Spain — Europe's top three tourist destinations, which account for more than half of all tourists to Europe.

The WTO says all three countries have seen a significant drop in international tourist arrivals this year.

Americans heading to Europe this year are projected to be down 7% to 9%, compared with 2008, says Neil Martin, a travel marketing expert and editor of the Trans-Atlantic newsletter.

"Domestic tourism is actually on the rise," says Giovanna Manzi, the CEO of Best Western-Italia, which operates 180 hotels in Italy. "People who may have gone abroad in the past may be more likely to stay in their home country."

There are signs that a turnaround could be in the works.

In Spain, the Ministry of Tourism and Industry reported that June showed the first increase in tourism this year, when compared with the same month in 2008, sparked by a return of British tourists. Lastminute.com, a tourism booking website, says the sharp drop of tourists in all of Europe this year seems to be flattening out, fueled by steep discounts on air fares and hotels.

Italy takes action

Traditionally, tourism in Italy outpaced overall economic growth in each of the past six years. But the recession, surging unemployment and a bout of bad publicity about tourism have operators on edge.

Rome recently created a special police force after numerous media reports about tourists being gouged. La Repubblica,a daily newspaper, among others, detailed how a Rome restaurant charged an unsuspecting Japanese couple $1,000 for a simple meal. Another newspaper, Il Messaggero, wrote about a couple charged an extravagant $715 for a ride in a horse-drawn carriage.

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