The Paris attacks could wipe more than £660million off the value of Europe’s tourism industry, analysts say.
The full extent of the damage following the November 13 terrorist attacks in the French capital that killed 130 people will not be known until fourth-quarter results are published, but already the industry has shown signs of weakness.
However, hotel revenues in Paris are down up to 40 per cent from 2014’s levels, while restaurant income has fallen a similar margin. New flight bookings to Paris fell by 27 per cent in the week following the attacks, costing Air France KLM €50million (£33m).
The Louvre, unseasonally quiet Photo: Getty
Analysts told Reuters that the effect on Europe’s €500billion (£330bn) tourism industry could be anything between €800million and €1billion.
“I suspect that we’re going to see a little bit more of a lingering impact for the travel industry,” said Ken Odeluga, market analyst at City Index.
There is concern that with the political and security situation still volatile in many parts of the Middle East and major Western countries on high alert for further Islamist attacks, safety fears will continue to hang over the sector for the foreseeable future.
• Unusual holiday destinations where the terror risk is low
The terror threat in Paris remains high Photo: Getty
"It can get worse when, instead of having one event, you are starting to have a series of events, because people then feel very insecure," said Daniele Patti, senior research analyst at Allianz Global Investors.
• Why you must keep visiting Paris
British bus and train operator Stagecoach last week issued a profit warning because of customer fears about trips to major cities.
There were, however, hopes that holiday companies could ride out the storm, with low oil prices and a recovering economy offsetting the terror damage.
According to Reuters, investors are keen to benefit from the positive factors, and are focusing on groups that offer a wide range of destinations, can avoid places where safety is in doubt, and have robust enough finances to absorb potential shocks.
"Big companies may be better prepared because they have more ... and further destinations that will be tempering the losses," said Ipek Ozkardeskaya, market analyst at London Capital Group.
The Belgian capital of Brussels was put on lockdown following the attacks Photo: Getty
On the plus side, analysts cited tour operator TUI , cruise operator Carnival, online holiday retailer On The Beach Group, Ryanair and British Airways parent IAG as being able to weather the storm.
TUI, the world's largest tour operator, said last week it was confident of increasing earnings by more than 10 percent this year, as it switched out of Egypt and Tunisia to focus on the Canary Islands and Cyprus instead.
With ships seen as less likely to be targeted in attacks, Carnival was cited as a good bet in the current context, while On The Beach Group could benefit from its focus on destinations like Spain, Portugal and the Canaries.
The terror threats in both Paris and Brussels remain high, while no airline is currently flying to the Egyptian resort of Sharm el-Sheikh, following advice from the Foreign Office.
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