5 Travel Stocks Hit By The Brussels Attacks

At least 31 people were killed and more than 200 injured during terrorist attacks on Brussels airport and a metro station on Tuesday. The Islamic State (IS) claimed responsibility for the two attacks which took place on Tuesday. These tragic developments sent ripples throughout Europe and the world at large. Authorities have been forced to reevaluate levels of security at airports and public transport.

Travel, tourism and airline stocks took a hit immediately after these developments. Following indications that these events may be linked to the attacks which occurred in Paris in November, airline, travel and tourism companies may be significantly affected as travel to Europe is likely to fall.

Links to Paris Attacks

According to experts, the blasts were being planned before the arrest of a French citizen last Friday. The individual is believed to have played a major role in the attacks on Paris which took place on Nov 13. Explosives and evidence of his association with the IS were discovered during his arrest. Meanwhile, the IS has claimed responsibility for the attacks on Maelbeek metro station and Zaventem airport.

IS has also issued a warning to those countries which have joined in a coalition against the group and are actively engaged in a conflict against it in Iraq and Syria. Public transport had been suspended following the attacks but normalcy has now begun to return to Belgium’s capital. Despite the resumption of some services, the city’s metro system and airport remain closed for now.

Travel, Airline Stocks Decline

Immediately after these attacks, travel and tourism stocks took a considerable hit. Delta Air Lines, Inc. (DAL - Analyst Report) and American Airlines Group Inc. (AAL -Analyst Report) declined bya minimum of 1.5% on Tuesday. Meanwhile, Marriott International, Inc. (MAR - Analyst Report) and Starwood Hotels & Resorts Worldwide Inc. (HOT - Analyst Report) fell by 1.9% and 0.4%, respectively. Additionally, United Continental Holdings (UAL - Analyst Report) which owns United Airlines experienced a 1% fall in its stock.

United Airlines has decided to exempt passengers from the change in fees and gap between fares in case they decide to reschedule their flights to Brussels up to Apr 1. Meanwhile, American Airlines has decided to suspend Wednesday’s and Thursday’s flights to Brussels. Both companies are also reaching out to employees affected by these events. Marriot, Starwood and Delta have confirmed that employees and customers caught up in these events are safe.

Summer Travel to Europe Likely to Fall

Following Tuesday’s attacks in Brussels, travel and tourism to Europe is likely to be affected this summer. According to travel company Thomas Cook, summer bookings have declined compared to last year. Only 40% of the summer season has been sold yet, primarily because of the recent events in Paris and now Brussels.

According to airfare prediction app Hopper, bookings to France have declined 8-10% year-over-year following November’s events. Further, the number of Internet searches made on the site show that interest in Europe as a destination has declined 13% year to date compared to the year ago period.

However, there are still some factors in play which could reduce the impact of these events. A strong dollar, decline in airfares due to cheaper fuel prices and affordable accommodation have increased the area’s attractiveness to travelers.

In Conclusion

It is likely that travel to Europe is likely to suffer somewhat over the year following the recent terrorist attacks. Additionally, the migrant crisis is also likely to force travelers to rethink their choice of destinations.

In this event, it is likely that travel, airline and tourism companies will garner gains from regions like Latin America and Australia. For instance, the Rio Olympics is likely to attract significant traveler interest. In any event, travel in regions other than Europe is likely to pickup because of recent developments.