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Fears for Tunisian tourism industry after attack

Tunisia is reeling from a terrorist attack on Friday in which a gunman appeared to target European visitors, prompting fears that a key pillar of the country's struggling economy – tourism – could be under threat.

At least 38 people are believed to have been killed in the holiday resort town of Sousse on Friday when a gunman opened fire on a beach and nearby hotels. The majority of those killed were tourists, enjoying the beach resort popular with European holidaymakers.

Tunisian Prime Minister Habib Essid announced a clampdown on security after the latest massacre, but whether that is enough to inspire faith among tourists – whose numbers in Tunisia are already falling -- is another matter.

Karim Touhami, a sales manager at the Hotel Marhaba in Sousse, located near where the shootings took place, told CNBC on Monday that he was worried about business, and the industry as a whole.

"Of course, we are worried about our industry and our business, but the government is taking decisions to protect the beach and all of the hotels. There are police on the beach and there will be security at the hotels," he said.


Photographer | Collection | Getty Images

"We hope it will give some assurances to our guests and partners."

Touhami said that only a small number of guests had decided to leave the hotel following the attack, with the remainder determined to continue with their holiday. However a number of tour operators, including Britain's Thomson and First Choice, evacuated tourists from the country over the weekend.

Second attack

The latest shooting follows a similar Islamist-inspired attack on the country's Bardo museum in March, in which 31 people died – again, the majority of them tourists. The terrorist group which calls itself "Islamic State" claimed responsibility for both attacks.

Tunisia relies heavily on tourism and the industry accounts for 15.2 percent of Tunisia's gross domestic product (GDP), according to the latest figures from the World Travel and Tourism Council. The industry directly supports 228,000 jobs -- or 6.6 percent of employment in the country.

According to data from the Tunisian Tourism Ministry, however, the numbers of visitors have been falling – from 6.9 million visitors in 2010, to just over 6 million people in 2014. And available figures for 2015 indicate that this trend is set to continue.

Analysts at political risk consultancy Eurasia Group warned that the latest terrorist attack in Tunisia would have a "devastating impact on the tourism sector and, more broadly, on the already struggling economy."

"After the Bardo museum attack in March, tourist arrivals have fallen by about 30 percent year-on-year as European visitors cancelled reservations," Eurasia analysts Ayham Kamel, Riccardo Fabiani and Famke Krumbmüller said in a note Friday.

"The targeting of another popular tourist destination (the seaside town of Sousse) will further reduce the number of visitors this year, hitting employment and exacerbating social tensions in the country."

Reforms

Unlike some other northern African countries, Tunisia has not experienced turbulent political upheavals since the uprisings that occurred in the region in 2011. However, its economy is still struggling – it relies on funding from the International Monetary Fund (IMF), which says reforms are needed to boost both public and private investment.

The Eurasia analysts warned that the recent attack would likely present a further obstacle to reform.

"As the authorities struggle to revive the economy, this situation will make it more difficult for the authorities to implement politically sensitive structural measures, such as the reform of the banking sector (which in part targets non-performing loans in the tourism industry)," they wrote. "Nevertheless, under pressure from the IMF, we still expect the government to adopt banking and fiscal reforms."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld