Trends Update

How terrorism is affecting European hotel industry

An article from the New York Times has outlined the potential ramifications of terrorist attacks like the one in Paris last year on hotel operators across Europe. Rising fears of repeated attacks have caused a sense of unrest which has led to a decrease in the number of holidaymakers heading to Europe.

In the wake of recent terrorist attacks that have taken place throughout cities across Europe, business owners and operators within the hospitality industry witnessed firsthand the effects of falling tourism figures and lower occupancy. This has left many hotels wondering the same thing: whether or not tourists will still travel. A number of reports from hotel chains across popular regions of Europe have already illustrated a slump in booking figures following major terrorist attacks. Most notably, the Sodetour Group, a chain of hotels in the popular area near Mont-Saint-Michael, experienced losses of 70% in the months following the Paris terrorist attack in November 2015. This paints a daunting picture for other hotel operators in major cities throughout Europe as they struggle to maintain high sales figures in an increasingly competitive market. Travel Luggage Following the devastating attack, hundreds of holidaymakers cancelled their reservations at a number of the Sodetour Group hotels, despite the fact that they are located hundreds of miles away from Paris in Normandy. The loss of customers resulted in a huge slump in sales and the closure of multiple hotels which is a pattern that has since been repeated in other areas across Europe. Many hotels remained in the recovery stage for months and have become increasingly hesitant about trying to expand or invest amongst fears of future attacks. While central European governments have begun investing billions into security measures to counteract terrorist activities, the fear amongst holidaymakers has caused stagnation in the EU hospitality industry the New York Times report found. As the attacks in popular cities seem to become more frequent, hoteliers must adopt measures to minimise spending and cut costs, leading to a number of redundancies in cities all over France and wider Europe. Data from leading hotel chains in areas including Brussels and France showed that the number of bookings fell consistently after every major terrorist attack. The global travel website, reported that nightly bookings in France fell below 10% following the Paris attacks and the number of bookings in Brussels fell into negative figures after the bombings in March 2016. The slump in tourism throughout Europe doesn’t look promising for the economic stability of the region. The tourism industry makes up 10% of the EU’s economic income which means that the hotel market could see large financial losses in the years to come. The uncertainty of potential terrorist attacks makes it even more difficult for hotel operators in the area to make financial forecasts or expansion plans. Although the market continues to fluctuate, it seems that the threat of further terrorist attacks has and will continue to affect the success of hotels in Europe. In this environment, investment in other areas such as digital marketing, responsive sites and booking engines is critical.