Simon Calder: Tourist industry prepares for surge in cancellations

The aftermath of the murderous attack that the London Mayor and the Commissioner of the Metropolitan Police had predicted will have a lasting impact on the capital's economy, of which tourism is an important part. Although yesterday's attack was not aimed specifically at tourists, there is likely to be an immediate exodus of visitors from London. Indeed, in anticipation of heavy demand from passengers desperate to get home, Ryanair has organised extra departures today from Stansted to its key destinations of Barcelona, Dublin, Frankfurt and Milan. Many airlines and other transport operators are allowing passengers to switch flights free to allow them to return home early.

The converse also applies to many prospective visitors: holiday companies abroad have allowed customers due to travel to London to postpone, cancel or switch destinations.

The attack has come at the start of the summer peak season, normally the time when occupancy rates and prices are at their highest, and when airlines, hotels and tourist attractions expect to earn the bulk of their annual profits. The recent weakening of the pound against the euro and the dollar had raised hopes for a bumper summer.

In the immediate aftermath of the tragedy, companies involved in inbound tourism were understandably reluctant to quantify the likely financial cost of the attack. But one senior executive said he had already "written off" the rest of the summer.

There have, sadly, been sufficient attacks on tourists worldwide to identify the probable effects. Firms focusing on the lucrative US market are likely to be badly affected: the evidence from atrocities in Egypt, Bali and Kenya suggests American visitor numbers will decline sharply, not just for London but for the UK. US travellers spend more per visit to Britain than any other nationality.

And many groups of children are booked to travel to the capital, either on holiday or for language courses, during the summer. Some observers expect large numbers of cancellations from fearful parents. Yet among other prospective travellers, the capital's role as the world's leading aviation hub could limit the damage to London's economy.

The sharp rise in low-cost flights to and from Gatwick, Luton and Stansted has helped boost travel to Britain; for people in many European cities, the one destination to which they can fly cheaply is London.

The targeting of the attacks on commuters rather than tourists has many similarities to the 11 March bombings in Madrid last year. After that, tourism to the rest of Spain was barely affected, and visits to the Spanish capital recovered quickly.

The effects will be felt well beyond Britain. Each time a terrorist attack is blamed on Islamic extremists, tourism from the UK and other wealthy nations to Arab countries suffers. Morocco, Jordan and Egypt are all likely to be affected by yesterday's atrocity. So destinations perceived as safe could benefit. Canada, New Zealand and Scandinavia would not want to benefit from an atrocity, but are likely to be seen as havens for holidays.

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