Americans, Their Currency to Visit UK At Record Levels, Bear Stearns Analyst Reports.

LONDON/NEW YORK--(BUSINESS WIRE)--May 24, 1999--

Jason Ader Says Trans-Atlantic Travel Wave Has One Rough Patch: Year-End

A record four million Americans will visit the U.K. in 1999 and their spending on air travel, hotels, car rentals, tours and related activities will reach an unprecedented 5.7 billion GBP, a stunning 9.6 percent rise over 1998 levels. That's according to a report to be issued in London today by Jason N. Ader, senior managing director of leisure industry research at Bear, Stearns & Co. Inc., the worldwide investment banking and securities trading and brokerage firm.

Surprising strength in the U.S. travel sector and overall economy will fuel record American tourism in Britain this summer and fall, Mr. Ader says. One cloud in the forecast is the period around the millennium celebration, when the lure of domestic US travel and fears of Y2K snafus will curtail Americans' U.K. visitation. Another dark spot is any potential major expansion or change in the Balkan war, Mr. Ader says.

"Britain will again be Americans' number-one overseas destination in 1999, chosen by 22 percent of all US citizens who'll vacation outside the U.S., up from 18 percent last year," Mr. Ader said today, citing Bear Stearns research. He forecasts that spending growth by Americans in Britain will pass last year's 6.7 percent rise to 9.6 percent in 1999. "Of all the nations in the world beyond America's shores, Britain is uniquely poised to benefit from the U.S. travel boom," he adds.

The U.S. travel sector is seeing unexpectedly robust strength in 1999, Mr. Ader says. After a choppy fourth quarter of 1998, most U.S. hotel companies, car rental firms and airlines glided to strong first-quarter earnings figures driven by fee and rate increases made possible by resurgent consumer demand.

"Late in 1998, some clouds appeared on the horizon for the U.S. travel sector as the U.S. stock markets faltered and recession fears emerged," Mr. Ader says. "But those fears evaporated early this year with the stock market revival and a spate of positive government reports on U.S. economic performance," he adds. The rosy economic numbers plus Americans' greater disposable income have fuelled their desire to travel in record numbers, both domestically and overseas.

Travel to the U.K. from domestic U.S. locations is now remarkably affordable, Bear Stearns notes.

"In March, a full-economy airfare to London's Heathrow Airport from New York's John F. Kennedy Airport cost slightly more than $650," Mr. Ader said. "That's cheaper than many flights from New York to major American destinations." The lowest peak-season excursion fare to Heathrow from Kennedy was just $332 in March, Mr. Ader says. "That's about the same cost as flying from New York City to Washington, D.C. and back," he notes.

Another factor in the U.S. travel wave to Britain will be travelers headed overseas for the first time, Mr. Ader says.

"New American wealth derived from the stock market and the strong U.S. economy overall has many Americans searching for ways to spend a portion of their gains," Mr. Ader notes. "With its moderate costs, great excitement and educational value, travel is a natural choice," he adds.

"For America's first-time travelers overseas, the U.S. and U.K.'s shared language and strong cultural ties make Britain the number-one destination choice," Mr. Ader says. "Britain seems at once a friendly and safe destination for U.S. `maiden voyagers.'"

One negative element for Britain in the Bear Stearns U.S.-U.K. travel forecast is the millennium celebration period of late December 1999. Destinations within the U.S. appear to be the most likely travel spots -- to the extent Americans are inclined to travel at all during that time.

"The coming of the new century is a special occasion Americans seem inclined to spend with family or close friends in the U.S.," he notes. "To the degree Americans would travel during the period, the vast majority will travel to U.S. cities to be with family members," he predicts. One exception would be religious pilgrims journeying to the Vatican for special millennium celebrations.

Of course, some travelers' fears about Y2K glitches in travel company computer systems may curtail U.S. travel overall during the late December, early January period, Bear Stearns says.

"For reasons sensible or not, U.S. travelers who fear Y2K snafus feel safer travelling domestically as opposed to overseas," Mr. Ader says. A factor here may be that Americans have become accustomed to hearing U.S. companies' public announcements about Y2K compliance -- but hear less from overseas travel operators," he notes.

Of course, a major drop-off in U.S. travel to all parts of Europe and the U.K. can be expected with any major expansion of the war in Kosovo beyond its current borders, the advent of any terrorist incidents associated with the conflict or active combat by a major deployment of U.S. ground troops in Europe.

Bear Stearns leisure industry research is developed using proprietary financial modeling techniques, exhaustive, ongoing interviews with publicly traded leisure company executives and travelers. The Bear Stearns leisure research group, based in New York, employs a full-time staff of five research analysts under Mr. Ader. A perennially top-ranked equity analyst in annual third-party polls of institutional investors, Mr. Ader is the author of the Bear Stearns Leisure Almanac, the Bear Stearns Lodging Almanac, the Bear Stearns Global Gaming Almanac and other noted works.

Bear, Stearns & Co. Inc., a leading worldwide investment banking and securities trading and brokerage firm, is a major subsidiary of The Bear Stearns Companies Inc. (NYSE: BSC). With approximately $19.3 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, private client services, derivatives, asset management, correspondent clearing, securities lending and custody services. Headquartered in New York City, the company has approximately 9,600 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles and San Francisco; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit our website at http://www.bearstearns.com.