The 2015 Paris attacks inflicted tremendous losses upon the French hospitality market, resulting in the lowest level of customer turnover for some hotels over the last twenty five years. The Paris and Nice attacks caused economic damage, equivalent to damage caused by the 2008 Great Recession (Alderman, 2016).
On a global scale, the global tourism industry demonstrated 3 percent growth prior to the 2015 Paris attacks (LaGrave, 2016). Moreover, the global tourism industry employed 7.2 million people more in 2015 alone, providing income for about 284 million people all over the world. Global tourism generated about one-tenth of the global GDP, or $7.2 trillion prior to the Paris attacks of 2015.
According to survey conducted by the French Association of Hotels, Restaurants, Cafes and Caterers (Synhorcat), Paris bars and cafes reported a 44 percent revenue decrease after the 2015 Paris attacks (Daly, 2016). Paris hotels reported a 57 percent fall of revenue after the attacks. In the early 2016, the customer turnover was at least 11 percent lower in comparison with the early 2015.
According to the 2016 MKG Group report, estimated losses for the French hospitality industry in 2016 will comprise about 270 million euro (Daly, 2016). As for the Paris hospitality business losses, the city alone will lose 146 million euro in 2016. Prior to the 2015 Paris attacks, Paris hospitality industry generated 21 billion euro revenue, servicing to 32 million tourists per year.
Trying to restore the number of tourists prior to the Paris attacks, the Accor hotel group along with the state-run SNCF railway operator undertook the #ParisWeLoveYou promotion campaign in the late 2015. While the railway operator attracted tourists with discounts on about 220,000 tickets, Accor hotel chain offered 30 percent discounts for about 100,000 all-inclusive rooms. The SNCF chairman confessed the aforementioned promotion campaign had never been practiced before the Paris attacks in 2015. Greater Paris Regional Council president confirmed the French government was fully aware of the losses inflicted upon the tourism industry by the terrorist attacks.
Prime Minister Manuel Valls assured the public the security measures during the Euro 2016 would be sufficient to eliminate any risk of other terrorist attacks in June and July, 2016. Eight million football fans were about to visit Euro 2016 from mid-June to mid-July. The government assured the public several fan zones would contain from twenty thousand up to one hundred thousand fans simultaneously.
According to the Moody's Investors Service report, the terrorist attacks indeed weaken economic activity, causing long-term damage to the tourism industry of France. On a global scale, terrorism has already inflicted economic losses, equivalent to 0.5-0.8 percent of GDP of some most formerly attractive countries since 2013.
The Brussels 2016 attacks resulted in 60 percent fall of the tourist inflow (Chow, 2016). Prior to the bombings in Brussels, about 82 percent of rooms were reserved, and only 25 percent of rooms remained reserved after the bombings. The Belgian economy lost about 1 billion euro because of the Brussels bombings (Alderman, 2016). The Chinese tourist inflow in Paris dropped only 3 percent after the Paris attacks (Chow, 2016). In the course of 2015, the number of Chinese tourists in Paris had been growing steadily, approximately 5 percent every month of 2015.
Booking.com platform reported 10 percent decline of bookings the week after the Paris attacks. The month after the attacks, Air France reported $134 million of lost profits. In the late December 2015, the Europe's largest airline reported slight growth of traffic, which was caused by the Christmas holidays. Luxury segment of the tourism market experienced even more drastic fall of demand. Hermes International reported fall of income in the late 2015 in comparison with the late 2014. The number of British high school students in France dropped 55 percent after the attacks. British teenagers and their families are scared to study in France.
According to journalist Hugh Morris (2016), natural disasters cause far greater damage to the tourism industry than the terrorist attacks. While the terrorist attacks cause rather temporary damage to the tourism industry, natural disasters such as hurricanes, tsunamis and earthquakes intimidate potential tourists more than the various terrorist attacks. The number of tourists in Spain recovered next year after the 2007 Madrid terrorist attacks. The number of tourists in Great Britain had been falling for two years since the 2007 bombings to 2009, demonstrating slow recovery since 2010. The point is that natural disasters such as floods or hurricanes inflict far great damage to the tourism infrastructure, unlike the terrorist bombings. Thailand had been recovering its infrastructure for 14 months after the 2004 tsunami. It took Haiti almost two years to recover after the 2010 earthquake. Japan's infrastructure had to undergo fundamental two-year reconstruction after the 2011 earthquake. As for the 9/11 attacks in New York, the number of tourists to the U.S had been falling for five consecutive years, reaching the pre-9/11 level only in 2007.
The attacks in Nice exacerbated the negative effect of the Paris attacks in terms of accelerating the tourist flow fall in France. The Rouen murder of a priest immediately resulted in the 20 percent fall of the tourist flow fall within Normandy (Alderman, 2016). 19 European nations witnessed the same tourist flow as in 2008 after the outbreak of the Great Recession. In the early 2016, the EU supranational economy reported 0.3 percent growth, but the Nice attacks immediately resulted in the zero economic growth for France. Extra police patrols across French cities now cost extra 1.1 million euro for French taxpayers (Alderman, 2016). On the top of that, French government had already spent extra 816 million euro to provide better security across the country.
LVMH Hennessy Louis Vuitton corporation reported zero sales growth in 2016 because of the Paris and Nice attacks. Hermes branding confirmed the company experienced zero sales growth, too. Luxury segment of the tourist market was damaged more than conventional tourism market niche.
As a conclusion, terrorist attacks indeed imposed tremendous losses upon French hospitality industry, equivalent to the damage caused by the 2008 Great Recession. Although natural disasters indeed cause greater damage in terms of infrastructure, terrorist attacks jeopardize overall image and reputation of various nations such as France or the U.S. after the 9/11 attacks. French tourism industry lost at least 200 million euro in 2016 because of the 2015 Paris attacks. The Nice attacks exacerbated the negative impact of the Paris attacks on the French hospitality industry. Further terrorist attacks will slow down the recovery of French tourist industry, making it almost impossible to expect fast recovery and restoration of the previous number of tourists, willing to visit France.
References
Alderman, L. (2016). Terrorism Scares Away the Tourists Europe Was Counting On.Nytimes.com. Retrieved 29 July 2016, from http://www.nytimes.com/2016/07/30/business/international/europe-economy-gdp-terrorism.html?_r=0
Chow, J. (2016). European tourism hit hard by terrorist attacks. MarketWatch. Retrieved 29 July 2016, from http://www.marketwatch.com/story/european-tourism-hit-hard-by-terrorist-attacks-2016-03-28
Daly, J. (2016). Analysis: French tourism counting the true cost of terrorism.Irishexaminer.com. Retrieved 27 July 2016, from http://www.irishexaminer.com/business/analysisfrench-tourism-counting-the-true-cost-of-terrorism-394890.html
LaGrave, K. (2016). How Terrorism Affects Tourism. Condé Nast Traveler. Retrieved 29 July 2016, from http://www.cntraveler.com/stories/2016-03-31/how-terrorism-affects-tourism
Morris, H. (2016). Terror has smallest impact on tourism industries. The Telegraph. Retrieved 29 July 2016, from http://www.telegraph.co.uk/travel/news/terrorism-has-the-smallest-impact-on-tourism-industries/
