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LONDON-London’s hotel market is likely to feel the worst knock-on effects of the terrorist attacks on the USA but continental European markets may yet stave off a prolonged downturn. That’s the conclusion of one leading hotel brokerage.

Directors at Jones Lang LaSalle Hotels agree that the future of the market rests on the nature and extent of retaliatory action in the coming weeks and months. In the meantime, it expects markets with a high reliance on US customers to be hit hard.

Arthur de Haast, managing director Europe at Jones Lang LaSalle Hotels said: ‘We have to assume that in the short term the London market has the potential to suffer the most, not only due to its high level of US demand, but its role as a gateway to Continental Europe for many US leisure travellers. In addition, the high profile political and possible military support the UK has given the USA, may deter travellers to the UK. Looking across the continent, the upper segment of hotels in Paris, Rome, London and Amsterdam are most exposed to US demand.’

In the short term it is the convention cities which are also likely to suffer as large scale meetings and non-essential travel is cut. ‘Cities such as Paris, Berlin, Madrid and Frankfurt all fall into this category and hoteliers across these markets are citing heavy cancellations of meetings,” said de Haast. ‘While the short term is likely to see further cancellations, a proportion of this demand will be deferred to next year. However, the European market has proven more resilient to cancellations in meetings and conventions compared to the US.’

The destinations likely to feel the worst impact of the curtailing of leisure demand include Egypt, Morocco and Tunisia. Turkey too may suffer from significant cancellations. ‘Spain and Portugal, which are currently among the most important outbound destinations for the UK and German markets, look likely to benefit from displaced demand,’ he said. ‘Looking back to the Gulf War, the London hotel market was the first to fall, but noticeably the first to recover.’

To combat the downturn, the London Tourist Board and Convention Bureau has formed a new partnership to research the effects of the terrorist attacks on the city’s tourism industry and the wider economy and use the information to implement a long-term recovery plan. The research will be undertaken by accountant PKF.

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