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Abu Dhabi, UAEWednesday 20 June 2018

Tourist industry worldwide shows resilience to terror

Despite appalling atrocities in recent years, countries have shown a remarkable ability to bounce back, say experts

Newly installed barriers on the pavement on London Bridge in London in the wake of a vehicular terror attack in June. Odd Andersen/ AFP
Newly installed barriers on the pavement on London Bridge in London in the wake of a vehicular terror attack in June. Odd Andersen/ AFP

Terrorism’s impact on tourism is well documented but what is less known is the remarkable capacity for recovery shown by many affected countries.

The threat of extremist violence against holidaymakers and other travellers is widespread with few areas of the world wholly untouched by actual attacks or perceptions of insecurity.

Western foreign ministries, which publish regularly updated advice for citizens planning to travel, often opt for caution. There are warnings of risks even in destinations with little or no history of terrorist attacks.

For countries that have witnessed atrocities, the official guidance can seem alarming.

In economic terms, the importance of a robust tourism sector is highlighted by statistics from the London-based industry forum, the World Travel and Tourism Council (WTTC).

The 2017 WTTC report shows the sector generating US$7.6 trillion (DH29.9 trillion) for the global GDP and 292 million jobs – equivalent to 10 per cent of all employment - in 2016.

“Despite the ever-increasing and unpredictable shocks from terrorist attacks and political instability, to health pandemics and natural disasters, travel and tourism continued to show its resilience,” says David Scowsill, who recently completed a six-year stint as the council’s president and chief executive. The WTTC estimates that rebuilding the tourism sectors of countries hit by terrorism takes on average 13 months although the recovery range is wide, from two to 22 months

“It tends to depend on such factors as the effect on infrastructure and perceptions, the type of locations and the nature of the events,” says Olivia Ruggles-Brise, the council’s director of policy and communications.

Paris took some time to recover from the horrific attacks of November 2015, the nature of ISIL’s crimes – 130 killed at the Bataclan theatre and open-air bars and restaurants – deepening public concern about safety. International and domestic bookings fell by 30 per cent in the immediate aftermath.

By contrast, London rebounded quickly after the London Bridge attack in June when a van driver deliberately ploughed into pedestrians, leaving eight dead and 48 injured. Travel agents reported bookings to be up by 6.7 per cent in the two subsequent months. The London Bridge attack came less than three months after five people were killed in a similar attack in Westminster and less than two weeks after a bombing in Manchester in north-west England killed 22.

In the US, Las Vegas was “more or less up and running” again within days of a gunman, without obvious political motivation, shooting dead 58 people attending a country and western music concert.

Ms Ruggles-Brise says markets react differently, with Asian travel seeming to be more liable to lose trade after terrorism attacks or natural disasters than the United States or Europe.

A report last year from the London School of Economics painted a gloomy picture, saying “harrowing media coverage” of ISIL attacks on western tourists in one Muslim country deterred people from visiting others.

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“Terrorists have a strong strategic incentive to target Western tourists," says Proffessor Eric Neumayer, one of the authors, says in the report.

“Not only will this generate considerable media attention, such attacks also target the major sources of tourist inflows and the victims come from countries whose governments often support, militarily, politically or economically, the governments in Islamic countries that the terrorists wish to overthrow.”

According to Prof Neumayer and his co-author, Thomas Plumper, the value to terrorists of attacking western tourists goes beyond the fact that they are symbols of western culture, easily identifiable as “different” in predominantly Islamic countries.

"There is also the impact on national economies the terrorists desire.”

As well as deterring tourism to the country in which the attack occurs, or visitors from the victims’ country of origin, the effect spreads. “The decline is larger for tourists from the country whose citizens have been killed or injured, but tourists from other western countries are also deterred,” says Prof Neumayer.

The academics used World Tourism Organisation data from 1995 to 2013 to analyse the impact of 190 fatal terrorist incidents in Islamic countries involving citizens from western nations and causing 1,402 deaths.

In the country where a deadly attack takes place, there is a 4.2 per cent reduction in the the tourist flow from the home country of most victims in the same year, and a 7.4 per cent fall the year after.

But the research also concludes that if, for example, Britons are killed in a Muslim country such as Tunisia, tourism to Egypt or other Muslim countries is also hit – typically by 3.8 per cent in the same year and almost the same in the next one. In addition, an attack targeting one western country’s citizens puts off people from other western countries.

“Our research provides further reasons for regional cooperation in anti-terrorism policies among Islamic destination countries since countries cannot shield themselves from the negative consequences of terrorism on tourism by preventing such attacks only in their own country,” says Prof Neumayer.

Spain was another country hard hit by terrorism this year with a deadly attack in Barcelona. But that has not dampened enthusiasm for Grupo Barcelo hoping to create the biggest hotel operator in Spain, as tourism there also shows signs of recovery, according to Reuters.

Family-owned Barcelo has proposed taking a 60 per cent stake in a combined company and a majority of its board seats in a non-binding offer that values NH at €2.48 billion (Dh10.68bn), NH said on Monday.

According to a letter sent to NH and published by the Madrid stock exchange, Barcelo has proposed a reverse takeover by NH, with Barcelo suggesting that NH pay for Barcelo with an issue of new shares at a value of €7.08 euros each, a 27 per cent premium to NH's average share price over the last three months.

A combined NH-Barcelo company would have over 600 hotels and sales of around €3.5bn, although Barcelo said its expression of interest was at this stage, "very preliminary".

Tourism accounts directly for around 11 per cent of Spain's economic output with the number of visitors to Spain having grown to a record high.

No one at HNA, which owns 29.5 per cent of NH and 26 per cent of bigger US hotels company Hilton Worldwide Holdings, was immediately available for comment.

Separately, NH said on Monday it had recently approved a three-year strategic business plan and this was still in place, focused on boosting its exposure to higher-spending customers and expanding abroad while reducing debt.

Analysts said NH could prove a good complementary fit for Barcelo as the latter, which has over 230 hotels, has a stronger presence in the Caribbean, while NH with over 380 hotels, has leading positions in European cities.