How have hotel markets in Europe reacted to terror attacks over the past three years?
Tragically, Europe has endured multiple terrorist attacks in recent years. In the past 12 months alone, we’ve seen a shift in the way terror affects hotel performance, and this article will delve into how several markets reacted following attacks. (All figures are 12-month moving averages, indexed to the month prior to the terror attack unless otherwise stated.)
We’ll start by looking at France, which has endured several attacks over the past three years, most notably in Paris and Nice.
- The attacks at the Bataclan and across Paris on that horrific night in November 2015 had an immediate impact on hotel performance. This further exacerbated the declines that hotels had already been experiencing following the Charlie Hebdo attacks in January of the same year. Last November, RevPAR in Paris remained a full 11 percent lower than it was in October 2015.
- The Bastille Day attack in Nice in July 2016, which claimed 86 innocent lives, again caused RevPAR declines, although to a lesser extent than in Paris. Hotels in Nice took 14 months to recover from the attack and are now achieving a RevPAR higher than the month prior to the attack.
In March 2016, Brussels hotels were already suffering due to the aforementioned atrocities in France. Then terror struck at Brussels Airport and Maalbeek metro station.
- Eleven months after these attacks, RevPAR had fallen 19 percent to 62.37 euros.
- Last November, RevPAR was still 7 percent lower than it was before the attacks.
There were five separate terror attacks in Istanbul in 2016, along with the nightclub shooting on the first day of 2017. The city was also the center of a coup d’état attempt in July 2016 and, for the purpose of analysis, performance has been indexed from that point.
- Istanbul has suffered the steepest RevPAR declines in Europe due to terrorism.
- By February 2017, RevPAR was down 27 percent at TRY144.87. Recovery has been rapid from this point, however, and RevPAR has since increased to TRY183.55.
Attacks in 2017
Since December 2016, when one of Berlin’s Christmas markets was attacked, London (on two occasions), Manchester, and Barcelona have suffered terrorist atrocities. The impact on hotel performance, however, has been markedly different from those previously seen in Paris, Brussels, Nice and Istanbul.
- Only Manchester has seen a decline in RevPAR – by 1 percent – and this was driven solely by supply growth, up 4.8 per cent January-November 2017.
- Meanwhile, RevPAR increased in Berlin (+3%), London (+1%) and Barcelona (+3%) since each of their attacks.
- This is particularly impressive in London, as supply increased by 1.5 percent in the six months since the March attack.
- In Barcelona, however, the Catalan independence declaration sparked significant declines, with RevPAR down 12.5 percent in October.
While it can be argued that the sophistication, or lack thereof, of a terror attack can have a bearing on visits to a city, there does appear to be a shift in traveler attitudes to cities that have been affected by terror. Travelers appear to have become more stoic in the face of terror and have accepted that, sadly, this is a danger that we face in our day-to-day lives, both now and for the foreseeable future.
This article was originally published in STR's Global Hotel Study, a comprehensive overview of the hospitality industry covering over 100 markets worldwide.
Global Hotel Study: 2017
STR's Global Hotel Study gives an unprecedented, worldwide view of the hospitality industry. With detailed insights for more than 100 global markets, the report explores the highs, the lows, and the factors tipping the scale in each direction. Beyond the numbers, the greatest value of this report is that it ties together on-the-ground industry knowledge from STR experts located across 15 countries.
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