PRESS RELEASE

For Immediate Release
Contact: Debra Kelman 212-794-DKPR (3577)
dkelman@dkpr.com

The Travel Business Roundtable (TBR) Index Of Leading Economic Indicators Declines 0.3 Percent In February

WASHINGTON, D.C. - April 17, 2001 -- The Travel Business Roundtable (TBR) Index of Leading Economic Indicators declined 0.3 percent for the month of February, marking the fourth monthly decline in the past seven months. The companion index - the U.S. Index of Leading Economic Indicators - was also down by 0.2 percent.

The dramatic slowing of the rate of increase in the TBR Index over the past year, particularly since September, is in sharp contrast to its strong cyclical growth rate. During the recent growth period, the average annual rate of increase amounted to 4.9 percent.

In addition, the decline in the TBR Index since its peak in September 2000 has been much sharper than expected. Since September, the TBR Index has declined at a seasonally adjusted annual rate of 3. 9 percent. During the two-year cyclical contraction — March 1990 to March 1992 — the Index declined at an annual rate of 11.8 percent.

On the basis of these and other data, the consensus forecast ranks the probability of a 2001 U.S. recession at 70 percent.

"This data leads us to conclude that both Indexes reflect the reality that the U.S. economy is now at the cusp of a recession," notes Dr. James Howell, Economist and President of the Boston-based Howell Group. "To that end, we believe the future course of the economy during the remainder of the year will be weak, followed by a modest acceleration of growth in 2002."

Dr. Howell adds that as a result, the most likely policy course to avoid a recession is that the Fed will cut short-term interest rates by more than the market currently expects. Given the expectation of a 4.5 percent Fed Funds rate by May, this would seem to support a rate in the 3.5 to 4.0 range by early summer.

With regard to the February TBR Index, declines were noted in four sectors: ARC Total Sales, ATA Revenue Passenger Miles, Consumer Confidence and Rental Car Price Per day. Increases were in the Hotel/Motel Occupancy Rate and Hotel/Motel Room Revenue, with no changes in Retail Sales of Eating and Drinking Establishments, Personal Consumption Expenditures for Travel and Related Services and Travel and Tourism Employment.

In the Conference Board’s U.S. Index, it was the fourth monthly decline during the past five months, though the Board said that even though the Index has moved sideways at negative to slightly positive monthly rates of change over the past 12-15 months, it still does not point to a recession.

"It is important to note that changes in the U.S. Index are dominated by changes in traditional manufacturing activity; hence the slowing in the economy is likely to be somewhat exaggerated," adds Dr. Howell. "And, when the pace of overall economic activity recovers, it will be the result of the new industries and the non-manufacturing sector such as travel and tourism, which should begin to exert a positive pull on the economy’s growth rate in the second half of the year."

The TBR Index is a composite of nine key travel, tourism, entertainment, and restaurant data measures representing all the major economic sectors of this industry. The composite TBR Index represents a weighted computation of the month-to-month changes in each of the individual time series. Seasonal fluctuations are removed from these data before they are aggregated into the final TBR Index.

Overall, the TBR Index reflects key industry changes throughout the national economy and very much like the Conference Board's U.S. Index of Leading Economic Indicators, has been statistically constructed to lead changes in overall economic indicators such as GDP, personal income, industrial production and other major economic performance variables.

As has been demonstrated by the results of the TBR Index, travel and tourism remains one of the fastest growing industries. In celebration of National Travel and Tourism Week from May 7-11, TBR is producing an original music video showcasing travel to and within the U.S.

It will feature and be shown on in-room/in-flight entertainment channels by participating members including: Delta Air Lines, Loews Hotels, Hyatt Hotels, Hilton Hotels, FelCor Lodging Trust Inc, Cendant Corporation, Amtrak, and Radisson Hotels and Resorts.

In addition, TBR is preparing to submit its Policy Recommendations for the Bush Administration and the 107th Congress.

These include:

	Formation of a Presidential Advisory Council on Travel and Tourism
	Travel and Tourism Industry Worker Shortage
	Work Opportunity Tax Credit
	Welfare-to-Work Tax Credit
	Raising the visibility of the U.S. as an International Travel Destination
	Travel and Tourism Satellite Accounts
	Minimum Wage Policy
	Business Meal Deduction
	Expanding Aviation Capacity
	American with Disability Act Accessibility Guidelines

The Travel Business Roundtable is a coalition of more than 60 CEO’s representing all sectors of the travel and tourism industry. In addition to the major airlines, car rental companies, travel management agencies, hotel chains, TBR’s membership roster also includes companies such as The Coca-Cola Company, USA Today, the Taubman Company, and the International Council of Shopping Centers, demonstrating the broad scope and diversity the industry represents. Projected to be the world’s largest industry within the decade, travel and tourism is the nation’s third largest retail industry and second largest employer with more than 17million Americans employed directly or indirectly in travel and tourism.

Projected to be the world’s largest industry within the decade, travel and tourism is also America’s leading services export, travel and tourism created a trade surplus of nearly $14 billion in 2000, generating $93 billion of tax revenue and more than $550 billion in total expenditures.

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