Economic woes cause travelers to postpone, cancel trips

— -- The plunging stock market, big bank failures, falling home values and other scary economic news could signal trouble for travel.

Gripped by fear of what may happen next and feeling less rich, some travelers are postponing, scaling back or canceling trips of all kinds. They're rethinking simple holiday trips and family fetes in the Caribbean — and analysts say it could be more than a year before travel rebounds.

"There really isn't any good news, even when you look quite hard to find some," says travel industry researcher Bjorn Hanson, an associate professor at NYU's hospitality school.

Even foreign travelers, who have been a bright spot for places such as New York and California, are starting to scale back visits, he says. They may be reacting to the strength gained by the dollar against the euro in recent months — and to the growing financial crisis here.

According to Hanson, "international travelers are saying, 'Is now really a time we want to go to America? America's probably not in the greatest mood right now. Why not wait until things settle down?' "

Feeling a lot less affluent

The industry still isn't clear about to what extent travel will slow, or how long it will last.

One reason experts doubt travel will rebound quickly has to do with the way many people were financing their travels before the housing market collapsed. Jan Freitag, vice president of industry tracker Smith Travel Research, says many people were financing their travels by accessing the equity built up in their homes, which appreciated dramatically in recent years.

"Post-9/11, people were able to refinance their homes and pull out more money and more money, so they were able to spend a little bit more on vacations. They felt 'My home's worth more. I feel rich,' " he says. "Now, that home-equity ATM is shut down."

Today, housing values have plummeted in many parts of the USA and lenders are pulling back on credit.

Motel 6 CEO Olivier Poirot expects that it will be "at least 18 months before we see any improvement."