Security fears blight European tourism

Security fears blight European tourism
By admin


Europe’s travel industry could lose more than $US1 billion ($A1.4 billion) in revenues because of the impact of the Paris attacks, analysts say.

Keen to benefit from the positive factors, investors 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 full impact of the November 13 attacks that killed 130 people in Paris will become clearer with fourth-quarter results, but there is already evidence of a significant hit to Europe’s tourism industry, worth $US500 billion ($A700 billion), according to the UN’s World Tourism Organisation.

Hotel revenues in Paris are down 30-40 per cent from last year’s levels. Restaurant revenues have fallen by a similar margin, while new flight bookings to the city fell by 27 per cent in the week following the attacks.

That cost Air France KLM 50 million euros ($A75 million), while British bus and train operator Stagecoach last week issued a profit warning because of customer fears about trips to big cities.

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

On the positive 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 said it was confident of increasing earnings by more than 10 per cent this year, after switching out of Egypt and Tunisia to focus on the Canary Islands and Cyprus.

With ships seen as less likely to be targeted in attacks, Carnival was cited as a good bet, while On The Beach Group could benefit from its focus on destinations like Spain, Portugal and the Canaries.

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