Terror troubles hit backpacker firm

By SIMON HENDERY

The world's second-largest backpacker travel business is tipped to be swallowed by its bigger rival in the latest tremor to hit the global tourism industry since last year's terror attacks in the United States.

Dublin-based USIT World, which has offices in 66 countries, including New Zealand, has been struggling since it bought US-based Council Travel just 10 days before September's attacks.

The subsequent slump in demand for US travel services hit Council hard and left USIT (Union of Students in Ireland Travel) with a deficit of reportedly up to €12 million ($25 million).

USIT is now believed to be on the verge of a sale - prompted by the company's bankers - to the world's largest student and backpacker travel group, Swiss-controlled STA Travel.

USIT arrived in New Zealand in 1998 when it bought YHA Travel.

It has eight travel shops between Auckland and Christchurch.

The shops trade as either USIT Beyond Travel, selling to outbound travellers, or USIT Beyond Explore New Zealand, focusing on inbound tourists.

The New Zealand head, Clare Wilson, yesterday said local staff were awaiting the outcome of discussions in Europe and it appeared an announcement was likely within a few days.

"It's business as usual and we're busy, which is great," she said.

USIT Beyond's annual report filed with the Company's Office records $1.1 million in operating revenue locally in the year to October 2000, down from $1.3 million the previous year.

STA Travel, the former Student Travel Australia, which is now controlled by a private Zurich-based company, has offices in 70 countries, including 11 travel shops in New Zealand.

The local inbound backpacker market has proved more resilient than other sectors of the industry since September 11.

Statistics New Zealand commercial accommodation figures for November, issued last week, show backpacker and hostel guest nights increased 9 per cent from the same month in 2000, while overall guest nights across all types of accommodation were up only 2 per cent.