European Travel Industry Could See Major Hit After November Paris Attacks
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More than $1 billion for Europe’s travel industry could be lost due to the Paris attacks However, analysts have said low oil prices and the recovering economy could offset the security worries for many companies.
Investors, who want to benefit from positive factors, are looking at groups with an array of travel destinations, that are steering clear of questionable safety countries and have a significant amount of finance to handle any possible issues.
According to London Capital Group market analyst Ipek Ozkardeskaya, bigger companies are far more prepared and can handle further destinations.
When the fourth-quarter results come in, a clearer picture will be seen on what kind of impact the Nov. 13 attacks, which led to 130 people dying, had on the tourism. The U.N.’s World Tourism Organization said evidence is being seen that a big hit is happening to a Europe tourism industry, which could be worth $500 billion.
Paris hotel revenues are down already 40 percent from the levels seen last year. Restaurant revenues are also falling as long as well flight bookings to the city since the attacks in Novemeber. The cost to Air France KLM is running around $55 million, and Stagecoach, a British train and bus operator, released a profit warning due to customer fears on traveling to big cities.
City Index market analyst Ken Odeluga said a lingering impact is on the horizon for the travel industry. Analysts have estimated that the total revenue loss is going to extend beyond one billion euros.
With the Middle East still in a volatile situation, major Western countries are on high alert for additional Islamist attacks. And, because of that safety fears will still hamper the industry for quite some time.
Daniele Patti, Allianz Global Investors senior research analyst, said the issue can worsen because there can be a series of events that cause people to feel insecure.
On an up note, analysts said cruise operator Carnival, tour operator TUI, online holiday retailer On the Beach Group and IAG have been able to cope with the storm. TUI said it was confident it would see a more than 10 percent increase in its earning after the company turned its attention toward Cyprus and the Canary Islands, and away from Tunisia and Egypt.
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