European Travel Affected by Bombings in Madrid
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Posted on: May 1st, 2008 by Frank Todd
Attacks by bombs have killed nearly two hundred people and left over twelve hundred injured during peak travel time in Madrid. Stock in the airlines and travel agencies are lower and officials are concerned travelers will cancel their vacation plans.
Experts and financers anticipated the most deadly attracts on tourism, particularly in Spain, in over fifteen years. However, they do not believe this will negatively affect the recovery of the travel sector from a decline that began in 2001.
Stock in the biggest travel agency in Europe, TUI, fell over seven percent and its United Kingdom counterpart dropped over four percent. Airlines like Ryanair and EasyJet also felt the shock.
Standard Life handles over one hundred and seventy billion dollars in assets. Anita Griffin, who is the director of investment for European equities there, said, “This is a reaction on the day to terrible news of the bombs. The backdrop for the sector is that is has shown improvements for the last 12 months. We have seen the demand coming back”
She also claims that business travel has risen and airline yields were “bottoming out.”
The government of Spain blames the attacks on a separatist group from Basque called ETA. They have had a regular “summer campaign” over the last few years, warning travelers to stay away from Spain for the holiday season to prevent attacks. This campaign has had a minimal effect on people traveling to Spain. These recent explosions, however, are not in the same league as ETA.
The investment strategy director for Fyshe in the UK, Jeremy Batstone, believes the biggest fears of the investors in al-Qaeda instead of ETA. They are afraid the recent attack was related to a crusade against the countries that support the United States war in Iraq. He still believes the impact will be felt by hotel, airline and tour companies. He said, “It will have an impact because Spain is such an important destination for many Europeans”
Spain has one of the largest economies in this region.
