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Hospitality faces up to the terrorist bombers

01 December 2005
Hospitality faces up to the terrorist bombers

Hotels, restaurants and bars around the globe have increasingly become not scenes of enjoyment and relaxation, but of terrorist atrocities.

Terrifying as it might seem, the question we now have to face is exactly what impact these attacks are having on the trade, and how hospitality operators can work to mitigate their threat.

The latest terrorist attack to hit the industry occurred last month in Amman, the capital of Jordan. The horrific bombing of three hotels - the Grand Hyatt, the Radisson SAS and the Days Inn - left 60 dead. Yet this wasn't an isolated incident. It followed attacks earlier in the year in Indonesia, Egypt, India, Pakistan and the UK.

Impact on occupancy
Hospitality commentators and operators are naturally concerned that such attacks could cripple tourism and tourism-related businesses. Robert Barnard, partner and head of hotel consultancy at PKF, said: "There will be fears that the bombing of three hotels in Jordan may affect tourism in the region. The hope will be that the impact on hotel occupancy and room yield will be minimal and short-term."

It's a view shared by the World Travel & Tourism Council (WTTC). President Jean Claude Baumgarten said: "I call upon all sectors of the travel and tourism industry, both globally and in Jordan, to come together and work to ensure that the significant economic and social benefits of our industry in Jordan are sustained."

The WTTC estimates that travel and tourism accounts for more than 16% of Jordan's economy, so any severe downturn would seriously hurt the prosperity of its people.

Sadly, the message delivered by Baumgarten was a mirror of those already issued this year by the WTTC following attacks in India, Indonesia, Egypt and London.

If there is a silver lining in the clouds of atrocity, it's that travellers and tourists are becoming increasingly resilient.

The island of Bali in Indonesia is a case in point. Following the attacks in October 2002, the number of arrivals dropped 82%, from an average of 5,000 visitors a day to less than 1,000. Figures from Deloitte's HotelBenchmark show that even three years later, revenue per available room (revpar) at Bali's hotels was still down 30%.

However, the latest attack on 1 October 2005, which left 25 dead, saw arrivals drop only 63%. While still challenging, this isn't as bad as in 2002. This time recovery is expected to be much swifter.

Closer to home, the response following the bombs in London in July also gives cause for hope. The latest figures from TRI Hospitality Consulting's HotStats survey show that London has bounced back with improving revpar in both September and October.

"It really needed two months' worth of data to give us comfort that London has shrugged off the impact of the terrorist attacks. We now have those two months of positive figures and it appears the London market has recovered strongly," said Jonathan Langston, managing director at TRI.

Since the 11 September attacks, Marriott International, the world's biggest manager of hotels, has added preparation for a terrorist attack to its list of routine security procedures. The company uses a system of colour coding to signify the threat level for particular properties, with red being the highest. If it's red, metal detectors are used to scan people, luggage and vehicles. Other measures include surveillance and guest profiling.

Vigilance and deterrence undoubtedly remain the best weapons against terrorists. In 2004, the Jakarta JW Marriott in Indonesia was hit by a car bomb which killed 12 people, but the number of casualties was considerably lower than it might have been thanks to a hotel checkpoint.

While the hospitality industry is putting new security measures in place, there's a limit to what can be achieved. Hotels, restaurants and bars are, by definition, public access places and over-the-top security procedures can put customers off. This leaves a difficult balance between risk-eduction and damaging business.

First-hand experience It's a balance the airline business understands all too well. Stelios Haji-Ioannou, founder of airline EasyJet and budget accommodation brand EasyHotel, has first-hand experience in both sectors. He believes the biggest issue is ensuring customers have a reasonable assessment of the risks they face. "We have a new type of risk - infodemic," he says. "The fear of having a crisis can obliterate travel. It might be safe, but people won't travel if they're scared. We have to think how we manage the information flow."

Andre Martinez, head of European hospitality at Accor, said the recent riots in France had had a major impact on business at the hotel group.

"One picture with burning cars in front of the Eiffel Tower gave the impression that Paris was burning," he said.

The experience means he now looks at TV news pictures from countries like Iraq with different eyes. Customers and staff at hospitality businesses around the world are increasingly being forced to look with those same more realistic, more aware, eyes.

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