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March 06, 1988|JERRY HULSE | Times Travel Editor

With the buying power of the dollar at distressing lows overseas, Travel '88 is emerging as an enigma to the industry.

Surprisingly, Americans are disregarding horror stories of high prices and are embarking on a buying binge that could match records set in 1987. The momentum is tied to prepaid package tours as well as to independent travelers using bed and breakfasts and small inns as substitutes for expensive hotels in the major cities.

Last year more than 6 million Americans visited Europe, a figure surpassed only by the record of 6.4 million set in 1985. After the October stock market debacle, industry leaders feared the worst. Instead, 1988 is emerging as an engaging year.

The Times' Travel Section's annual poll shows that the travel industry expects growth in the South Pacific, Mexico and Canada, along with a number of destinations in the Orient.

Europe, though, is turning out to be the year's biggest surprise. The industry had steeled itself for disappointment. Travel agents and tour operators believed the dollar's decline would mark disaster for tourism to the Continent. They recalled how Americans avoided Europe after terrorist attacks in 1986. Now the deterrent would involve economics. Instead, Americans are preparing for a new invasion of the Continent--even in the face of such scare stories as the $3 cup of coffee and $100 meals.

James Murphy of Brendan Tours credits the unexpected turnaround to the tour package. Murphy's own tours figure out to about $78 a day on the Continent and less in Ireland, including first-class hotels, sightseeing and most meals.

"It's a far cry from a $3 cup of coffee in a deluxe hotel," Murphy said.

Frederique Raeymaekers of the European Travel Commission suggests that Americans "do more homework to learn about inexpensive packages along with reasonable trans-atlantic flights."

Representing 23 nations, the commission is conducting a lively campaign aimed at the American consumer. The commission points to attractive land packages as a major lure. "Instead of spending recklessly, Americans are searching out bargains this year," Raeymaekers said.

Francis Goranin, president of the American Society of Travel Agents, said that many Americans who once lived opulently at Paris' Hotel George V and the Bristol in Vienna are choosing "more humble hotels."

Like Murphy, he credits the prepaid package tour with drawing Americans to Europe in 1988. As a bonus, a number of tour operators are guaranteeing their prices, even in the face of rising costs.

Americans opposed to package tours are buying Eurailpasses, renting cars and striking out on the B&B circuit.

"They're learning to travel like Europeans travel," one travel agent said.

Airlines are heavily into promotions. Only recently Pan Am offered passengers who fly round trip to Europe the opportunity to "take along a friend" at half-fare.

With prices sky high in Europe--the dollar buys roughly 30% less than it did a year ago--many Americans will be dining in neighborhood restaurants where the price of a meal is on a par with reasonable restaurants in the United States.

"The rule is to dine where the Parisians dine," Goranin said.

Europe suffered one of its greatest defeats in 1986 after airport violence and the hijacking of the Italian cruise liner Achille Lauro. Afterward, cruise ships sailed for other waters. Now they're returning to the Mediterranean and the Aegean with surprisingly strong bookings.

Martin B. Deutsch, publisher of Frequent Flyer magazine, joins other industry authorities who advise travelers to buy the prepaid tour. "It's absolutely necessary if you're on a budget," Deutsch said.

Like Deutsch, Eric Friedheim, publisher of Travel Agent magazine, spoke out in favor of the prepaid tour to avoid "hidden surprises."

Friedheim strongly urges Americans to travel in the countryside where accommodations are often available for as little as $20 a night. "Make your travel agent come up with rates that won't break you," he said.

Echoing Goranin's sentiments, Friedheim said the traveler can dine reasonably "in all the countries of Europe" by avoiding major hotels and popular restaurants.

Those replying to the Times poll made these other observations:

--Australia with its Bicentennial celebration will be welcoming large crowds in '88. Applications for visas are "staggering," according to the Australian Tourist Commission.

--Mexico figures to be a runaway favorite with Americans due to the healthy exchange rate of the dollar.

--Likewise, Canada, with its favorable dollar exchange, is anticipating a near-record number of Americans.

--Cruising is expected to grow enormously in 1988 with the introduction of new ships for a total of 73,000 berths.

--Hotels in Dublin will be heavily booked due to the Dublin Millennium.

--Africa is expected to do well, particularly on the heels of the 1986 hit movie, "Out of Africa."

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