Attendance at Disneyland and other once-popular Anaheim venues has dropped sharply over the past few weeks, as business and leisure travelers alike cancel their planned trips in the wake of the Sept. 11 attacks. Consultants at Ernst & Young's Hospitality Group earlier this week said the city's hotel-occupancy rate has been cut nearly in half, to a mere 42%.

About 54% of Anaheim's general-fund revenue, which was expected to reach $178.3 million this year, comes from sales and hotel-bed taxes. Anaheim and other cities that depend heavily on tourism-related revenue to finance their operations could face budget shortfalls if travel doesn't pick up soon, New York-based S&P says, which in turn could jeopardize their ability to make payments to municipal bondholders.

Only Anaheim's $8.2-million in general-revenue bond debt is effected by S&P's move, the credit-rating company says. A $510-million bond that was floated to pay for improvements to the Anaheim Convention Center and other parts of the 1,100-acre Anaheim Resort project is not affected because the debt is insured through a private carrier.