Airport and Hotel Bookstores Still Feeling Wake of 9/11 Tragedy

According to Reuters, the travel industry experienced a 20 percent drop in "like-for-like" sales for the 20 weeks to January 19. The International Air Transport Industry Association announced that passenger traffic on international flights was down four percent, and in December international traffic plummeted 12 percent from the prior year. Among those travel-related businesses feeling the pinch from these drastic drop-offs are airport and hotel bookstores.

On January 30, WH Smith, the U.K.'s leading newspaper and book retailer, made news by announcing it will close 19 hotel shops that are under-performing and whose leases are expiring. While the retailer has no plans to close airport shops, sales there have been slowed by the terrorist strike, according to Shelia Trappier Edwards, vice president, corporate affairs, WH Smith USA Travel Retail. "We're no different from anyone else," she explained. "The current economy is making all businesses reassess their situation."

Presently, WH Smith operates 180 airport shops and 391 hotel shops. In airports, WH Smith operates kiosks on both the "airside" (where passengers catch their planes) and the "landside" (where passengers check in, or are picked up after landing). "Only [airplane passengers] are allowed beyond security now," Edwards said. "So, we don't get the benefit of the 'meeters and greeters' on the airside anymore."

Michael Tucker can empathize with Edwards. He is the president of San Francisco-based Books Inc., which has 11 stores, one of which is located in United Airline's domestic terminal at San Francisco International Airport (SFO), and another in Anaheim, California-based Downtown Disney. Unlike WH Smith, however, Books Inc. does not have both airside and landside stores -- only an airside kiosk -- so its sales will rise and fall in direct relation to the health of the airline carrier.

Unfortunately, United has been anything but healthy over the past year (the airline was on track to lose $1 billion prior to September 11, according to Tucker). Consequently, sales at Books Inc.'s airport kiosk were off 15 percent before the terrorist strike. After the attack, sales dipped only another five percent, despite the fact that United cut its flight schedule from 267 flights to 160 flights.

"Even when United had 267 flights, they were only a third full," Tucker explained. "9/11 allowed it to do something that would have been considered Draconian beforehand." Still, losing the "meeters and greeters" did have an adverse affect on sales, Tucker admitted. Just how much this loss impacted sales, however, he, like Edwards, has yet to quantify.

But it's not just airport kiosks that have felt the pinch of a reeling travel industry. In fact, WH Smith's Edwards noted that its hotel shops were hurt more by the tragedy than were airport kiosks. "Not everyone who flies stays at a hotel," she explained, therefore airports experience more traffic than hotels.

And though Book, Inc.'s Downtown Disney store only opened in January 2001 (thus making it hard to track the impact of September's terrorist strike), Tucker admitted that sales figures have not been as good as Disney had initially projected. "[9/11] impacted sales, but how much?" he said.

There is a bright side for booksellers who rely on travelers and tourism, however. Within three weeks after 9/11, SFO renegotiated Books Inc.'s lease. Now, the bookseller's rent is based on percentage sales, as opposed to a fixed price. Additionally, WH Smith is currently in discussions with some airports to renegotiate contracts.

Furthermore, both Edwards and Tucker believe that the worst is over and business is stabilizing. In fact, for Books Inc.'s SFO shop, sales began to stabilize in October and are now "growing incrementally," Tucker said.

And WH Smith's Edwards is cautiously optimistic, too. "Folks will eventually go back to living the way they did before [the terrorist attacks]," she predicted. "We're waiting for the economy to rebound."

--David Grogan