Road Warrior

Terrorism fears up stakes for tourism as Europe travel falls ‘off a cliff’

Harriet Baskas, Special to CNBC
People look at the Eiffel Tower in Paris illuminated in colours of the Belgian flag in tribute to the victims of terrorist attacks in Brussels on March 22, 2016.
Philippe Wojazer | Reuters

Paris. Nice. Brussels. Orlando. Istanbul. Venezuela. Brazil. Baton Rouge. Dallas.

The list of places around the world touched by terrorism, violence, rising crime rates and health alerts continues to grow, along with the impact on the travel and tourism industry. In 2015, the sector contributed an estimated $7.2 trillion to the world's economic output and supported more than 284 million jobs worldwide, according the World Travel & Tourism Council.

The 73.4 million Americans who traveled abroad in 2015 (up almost 8 percent from the year before) helped boost those numbers. This year, however, U.S. travelers are increasingly taking terror risks into account when making vacation plans.

In the last few weeks, the U.S. State Department has issued travel warnings for voyagers to Turkey and Europe. With geopolitical risks on the rise, some travel insurance companies report an uptick in calls from travelers checking on the details of already-purchased policies, and inquiring about pricing and broader options for future coverage.

And whether insured or not, almost a quarter of Americans now say they will cancel, delay, relocate, change or reconsider travel plans before taking a vacation, according to the annual Vacation Confidence Index released by Allianz Global Assistance. In Europe, tourism has suffered in the wake of attacks: France's tourist sector alone has lost an estimated 270 million euros ($299 million) since late 2015, according to recent data.

'Fallen off a cliff'

"Americans are putting safety before money and may travel to more expensive destinations to insure their security," said Daniel Durazo, spokesman for Allianz Global Assistance USA.

"Our data shows that American summer travel to Brussels and Istanbul has fallen off a cliff," said Durazo, while "other locations, which Americans deem safer, like Dublin and Shannon in Ireland, have seen tremendous increases in American visitors."

The flip side of all this is that some travelers may be able to cash in on the heightened travel concerns, as airlines and various sectors of the industry try and halt the dip in bookings.

"We normally expect airfares from the U.S. to Europe and the U.K. to peak in late May and early June and slowly decline into fall," said Patrick Surrey, chief data scientist at Hopper.

"This year, prices have dropped precipitously from May into June, and there's been significant 'flash sale' activity as airlines tried to shore up demand in the face of ongoing uncertainty and apprehension about travel to Europe," Surry added.

Round-trip airfares from the U.S. to the U.K. are down about 35 percent, to $667, from their highs in May, reports Hopper, with prices to Western Europe down 36 percent, to $627. And compared to the same period last year, flight prices from the U.S. to Europe and the U.K. are down 31 percent overall.

Belgian troops control a road leading to Zaventem airport following Tuesday's airport bombings in Brussels, Belgium, March 24, 2016.
Charles Platiau | Reuters

According to experts, worldwide terror jitters make it more important for would-be vacationers to do something they often forgo: insuring their trip, which is an added cost.

"These uncertain times heighten the need for adding 'cancel for any reason' coverage to a travel insurance plan," InsureMyTrip noted in a release after Turkey's failed coup. The company added that "this coverage will typically cost the traveler an added premium, but provides a level of comfort that a trip can be canceled whether or not a terrorist event or political unrest is listed as a covered reason on the plan."

So how much does an added premium cost? Most companies add a surcharge of 45 to 50 percent for CFAR coverage to the policy cost, said Jason Schreier, CEO of April Travel Protection, "which typically adds hundreds of dollars, and increases as the cost of the trip goes up."

Although travelers may be on edge, "they aren't throwing in the towel," said Joe Diaz, co-founder of Afar Media, an online travel media company. "They are putting more thought into where they go and what travel suppliers they use."

Overseas, big American chain hotels can become targets for terrorism, said Diaz, "So travelers are considering more independent and boutique hotels, as well as using services like Airbnb and HomeAway."

And for their part, "hotels are doing what they can without making the hotel feel like a prison," said Anthony Melchiorri, a hospitality expert and a host of the Travel Channel's "Hotel Impossible."

Strategies include utilizing closed-circuit television for security, requiring picture IDs at check in, monitoring the halls late at night and asking guests to prove that they are registered, said Melchiorri.

"They are also increasing staff members to ensure mobility and flexibility and requiring in-depth training and planning for strategic responses to any number of emergencies," he added.

— Harriet Baskas is the author of seven books, including "Hidden Treasures: What Museums Can't or Won't Show You," and the Stuck at the Airport blog. Follow her on Twitter at @hbaskas. Follow Road Warrior at @CNBCtravel.