Brussels terrorist attacks induce slow-down in luxury and hotel industries

The terrorist attacks that took place in Brussels on Tuesday delivered a further blow to the hotel and luxury goods industries, already weakened by the November attacks in Paris.

The occupancy rate in Paris hotels, far from having improved, has recorded a 13% decline from the start of the year, according to figures from specialised agency MKG group. Revenue per available room, a key hotel industry indicator, has also decreased by the same amount.

Given this context, the Brussels attacks "are clearly very bad news for the industry, which has remained under pressure since January 2015," stated Georges Panayotis, President of MKG Group.

Ads

"What happened in Brussels may happen elsewhere in Europe tomorrow," he added. Panayotis foresees no improvement in the months to come until the European football championships in June in France, "which ought to give hotel owners some breathing space."

The first quarter outlook is equally tough for the luxury goods sector, which has to deal with tourism's downturn in France due to the attacks, the Chinese market's slow-down and Hong Kong's slump, the disappearance of Russian tourism and the decline in US-bound tourism owing to the strong dollar.

Purchases by tourist customers in Europe have decreased by 2% in February, with a 10% downturn in France, a 15.5% decline in Germany and one of 1.9% in the UK; this was partially compensated by a 10.5% increase in Italy and a 28.6% one in Spain, according to figures by tax-free sales specialist Global Blue.

Expenditure growth by Chinese consumers, which account for roughly one third of the world's luxury goods market, levelled off at 5% last month, marking the smallest increase since August 2014.

On Tuesday on the Paris Stock Exchange, tourism and luxury goods equities were among those posting the largest daily decreases. AccorHotels lost 3.85 %, LVMH 1.2 %, Hermès 0.92 % and Kering 0.85 %.

The so-called Islamic State has claimed responsibility for Tuesday morning's attacks at Brussels' Zaventem airport and at the Maalbek underground station.  According to the latest information, 31 people were killed in the attacks.