People, Travel

Terror Costs Europe $500m

Terror Costs Europe $500mTerror Costs Europe $500m

According to a United Nations’ World Tourism Organization report, the November 13 terrorist attacks leaving 130 people dead in Paris significantly hit Europe’s tourism industry, which lost revenues approximated at around $500 billion.

Paris hotels and restaurants influx is down by 30%-40% when compared to last year’s figures, as flight bookings in France also went down by 27% following the attacks.

Air France KLM lost a significant amount of $55 million due to fear of traveling in the potentially risky areas and general industry insecurity, Travel Daily News reported.

Taking into account the security issues that Europe has lately experienced, tourism investors are currently focusing on safer and financially more stable destinations.

“I suspect that we’re going to see a little bit more of a lingering impact for the travel industry,” Ken Odeluga, a market analyst at City Index, told Reuters.

On the other hand, important operators and top companies might resist this crisis. TUI, Carnival, On The Beach Group, Ryanair and IAG are considered to be among the stronger players and able to overcome the obstacles.

The dollar drop in the oil price also helps airlines offer market discounts and survive the overwhelming storm created in the travel sector.

By changing their business strategy, world’s largest tour operators have even managed to find ways to increase their earning: TUI switched its popular but unsafe destinations, such as Egypt and Tunisia, with the Canary Islands and Cyprus, while On The Beach Group focuses on Spain, Portugal and the Canaries.

As the current political and security situation regarding the so-called Islamic State will probably keep European states on high alert in the near future also, the travel industry will continue to be affected as well.

Analysts estimate that the total revenue on Europe’s travel and tourism sectors losses will hit over 1 billion Euros.

Europe is currently the world’s number one tourist destination with a market share of 51% in 2014. The tourism industry generates (directly and indirectly) 9.7% of the 28-member European Union GDP, a figure which prior to the attacks had been forecasted to rise to 10.4% by 2025.