TERROR AND TOURISM
European attacks have hit the travel industry hard,
PARIS— The shocks have come one after another: Daesh killings of civilians in Brussels and Nice. A deadly outburst of terrorism in Germany. A fresh terror-linked atrocity in a small French town. Warnings abound that more may be on the way.
The surge of attacks in Europe has raised questions over whether a potentially durable new threat to stability is settling in. The political challenges for Europe’s leaders are stark and the impact on the region’s economy may be just as profound.
“We are experiencing a structural change, a phenomenon of war on our doorstep that didn’t exist before,” said Georges Panayotis, the president of the MKG Group, a tourism consulting company based in Paris. “If it’s not resolved, the problem will continue.”
The effects of that shift on businesses have been deep. At the Mont- Saint-Michel, a spectacular medieval abbey that is one of France’s top tourist destinations, business at the Sodetour Group, a chain of local hotels and restaurants, slumped by up to 70 per cent for months after the Nov. 13 terrorist attacks in Paris. It has never fully recovered.
American and Japanese visitors in particular cancelled reservations even though the site, perched on an isolated rock off the northwest coast of Normandy, is far from Paris. Gilles Gohier, the chief executive, said he had to tell nearly a third of his 230 employees to go home for four months, and temporarily shut half of his five hotels and four restaurants. Since then, he has eliminated17 positions and is hiring new employees only on temporary contracts.
Business had just started to revive when the Bastille Day massacre in Nice happened. Cancellations jumped by 20 per cent and were expected to rise further after this week’s killing of a priest in Rouen, located in lower Normandy, an attack carried out by militants claiming allegiance to Daesh (also known as ISIS or ISIL). “What happened in Rouen shows that it could happen here, or anywhere,” Gohier said. “This makes it impossible to plan for business in the future.”
All of that has hit the European economy in one of its most vital sectors, tourism, just as a tenuous recovery was starting to take hold.
France, the European Union’s third-largest economy after Britain and Germany, was already struggling to emerge from a long period of economic stagnation and high unemployment.
France is the most visited country in Europe, attracting more than 84 million tourists last year, and economists had forecast a longawaited uptick in growth for 2016. After the Nov.13 terrorist attacks, the momentum slowed, and a slump in foreign tourism had only recently started to reverse.
But when further Daesh-inspired attacks were carried out in Europe, the impact was magnified.
In France, growth in nightly hotel room bookings after the Paris attacks fell to single digits from 20 per cent. After the Brussels bombings, bookings went negative, and after Nice, bookings fell by double digits, said Mark Okerstrom, the chief financial officer of Expedia, a global travel website.
“We haven’t seen a bounceback,” he said.
“What we don’t know for certain is whether there’s an overall dampening impact to global travel, or to Europe specifically.”
Germany’s government acknowledged last week that the country had become a target of Daesh after a spate of assaults against civilians on a train, at a shopping mall and at a concert. Travel companies are fielding questions over whether Europe’s largest economy is still safe, and economists said that consumption spending, a motor of growth, could decline if consumers started going out less.
All that may turn travellers away from Europe’s largest economies and toward calmer places such as Spain, Greece or Scandinavia.