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Overview of the impact of 9-11 on America's hotel industry

The tragedy of the attacks that took place in Paris on November 13 and the concerns raised among tourism and hospitality professionals recall the difficulties encountered by the sector in other countries hit by terrorism: Tunisia, Egypt, Turkey today, Spain, the United Kingdom and the United States before that. Hospitality ON takes a look at the difficulties encountered by the hotel industry in New York and America after September 11, 2001: what was the impact? How long? And what can we learn from it?

Due to their amplitude and the shock they caused in the United States and in the world, the attacks of September 11, 2001 made a durable impact on the American tourism and hotel sector. The drop in occupancy rate at American hotels was immediate following September 11 and continued over the following five months. After a study by Renáta Kosová and Cathy A. Enz published in the Cornell Hospitality Quarterly in 2012, the occupancy rate is the indicator that experienced the most flagrant drop after the attacks, bringing the Revenue per available room (RevPAR) with it. This is observation needs to be studied within the context of 2001, when dynamic price policies were not yet widespread throughout the hotel industry; it is thus more the evolution of the RevPAR that allows it to be put back in perspective. In September 2001, America's national RevPAR national experienced a monthly drop by 20 to 25% compared to the previous year, with an even more marked drop in the indicator in New York and Washington (-30 to -40%), which were hit directly. Across the country, the most touristic destinations (Honolulu, San Francisco, Boston, etc.), particularly as far as international arrivals are concerned, suffered more sustainable from the repercussions of the attacks. This is also true for American cities that host high volumes of business tourists, due in particular to a decrease in attendance at conferences and conventions, and cancellations. Considering the weight of the American economy, hotels in the country were not the only businesses impacted: the hotel industry worldwide entered a downturn. But we must also remember that September 11 produced no less than 2,977 victims for the global economic leader, which had never experienced such attacks on its own territory, and that it caused the New York Stock Exchange to close, and that all airline traffic was perturbed.

In New York, differences in impact could be observed between the different hotel ranges, as the studies by Renáta Kosová and Cathy A. Enz remind us. Initially, the upscale segment was especially impacted, but was then able to re-set its indicators faster than hotels in other categories. On the contrary, independent hotels and hotels in the economy categories initially suffered less from repercussions from the attacks, but their occupancy rate took longer to return to normal. Overall, it wasn't until January 2002 that there was a rebound in activity, meaning that the impact of the attacks on the domestic hotel industry could be felt for about 3 months.

Another particularity of the attacks on September 11, 2001 - due to their extent and geopolitical repercussions- was also their global impact on tourism worldwide. According to figures from the World Tourism Organization, the last four months of the year saw an 11% drop in travelers worldwide: the drop was particularly marked in the Americas (-24%) and the Middle East (-30%). It would take until 2004 to observe a real growth recovery for the flow, with a significant increase in international arrivals worldwide. In the United States, it is also in 2004 that tourism revenues (domestic and international visitors alike) finally caught up with their pre-9/11levels.

MKG Hospitality measured the impact of the 9/11 attacks on France's hotel industry: the national RevPAR dropped by 6% in September 2001, 13% in October, 7% in November, before regaining nearly stable levels at the end of January.

It remains to be seen if the attacks of last November 13, committed right in Paris, will dissuade France-bound tourists as much as the global trauma of 9/11. Although booking cancellations for Paris's hotels have multiplied since last weekend, flight cancellations remain limited. While the attacks are not comparable, it is nonetheless likely that we will see a temporary drop in international clientèle, and that complicated weeks lie ahead for Paris's hotel industry, if not that of all France.

Last January, we observed an impact on Paris's hotel industry that was relatively similar to the terrorist attacks in Madrid in 2004 and London in 2005. The current trend leads to believe that the repercussions of the latest attacks in Paris will last longer. The feeling of repetition after January's events, the coordination of the attacks, the methods used, their even more intensive international media coverage... for whichever reason, the latest data from MKG Hospitality suggest a more alarming fracture for France's hotel industry. In January it is noteworthy that following the attacks on Charlie Hebdo and the Kosher market on January 7, 2015, a major regular event -Fashion Week- helped Paris's hotels get back up on their feet. In this context it is clear that professionals will pay careful attention to decisions regarding COP21, which is to be held in Paris in just ten days.

Also Read :

  • Terrorist attacks in Paris: impact on the hotel industry
  • After the attacks, hospitality professionals step to the fore
  • First steps to support the hotel industry after the attacks
  • Attacks in Paris: daily follow-up of the impact on French hotels




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