GLOBAL REPORT—Terrorism and tourism do not make good bedfellows.

A new report from MKG Group analysts shows the November 2015 Paris attacks sparked a dramatic drop in hotel stays across France, as French hoteliers lost an estimated €270 million ($299.3 million) in revenue, according to MKG’s Vanguelis Panayotis.

“€146 million ($161.9 million) of those losses were suffered by Paris hotels, » he said.

Then, just as signs of recovery were setting in, the Nice Bastille Day terrorist strike has caused an immediate fallout on hotel and holiday bookings, according to British consultant David Tarsh, managing director of Tarsh Consulting.

Tarsh said data from travel intelligence firm ForwardKeys, which analyzes travel agent bookings, shows Paris has been the worst-hit city in Europe in terms of a terrorism-driven tourism slump, with a 22% year-over-year drop in foreign tourists since the November attack and 10% fewer hotel bookings.

Now since the Nice tragedy, Tarsh said Chinese, Japanese and U.S. tourists in particular are « canceling in droves, » setting France back even further.

“What this study shows is that after the Nice atrocity, future holiday bookings over the next couple of months were down 19% for Nice and 20% for France,” he said. “Before the (event), they had fallen by 14% for Nice and 16% for France.”

In 2015, France led global tourism with a record 84.5 million foreign visitors, according to government data. But terrorism is taking its toll.

Panayotis said those statistics are reflected in hotel occupancies and turnover countrywide, but particularly in Paris and in Nice, the two leading tourist destinations.

Plus, hotel bookings could erode even worse than they have in past months, he said.

“We have to go back to the Gulf War (1991-1992) to see hotels hit in this way,” Panayotis said, “so this is really quite something unusual for French and particularly Paris hotel activity.”

Panayotis said security-conscious Asian and U.S. tourists, who represent 30% of total tourists, are among those canceling the most hotel stays.

Hoteliers on the French Riviera have seen this happen and have observed hotel bookings drop by up to 30% over the last few weeks.

Michel Tschann, honorary president of Nice’s hoteliers union and owner of the Splendid Hotel & Spa in Nice, has observed a sharp plummet in stays since the Bastille Day attack.

“We are experiencing a drop in occupancies of about 15% and a 20% slump in earnings,” he said, “though the full effect won’t be clear for about six months.”

The hoteliers in the alliance are working together to try to turn around the fears and negativity keeping tourists away, largely by promoting tourism through social media.

Tschann said hoteliers in the region are using social media these days “to show that life here continues despite the tragedy that hit the city, and by showing that the coast is still beautiful—the beaches are open, the restaurants are open, the terraces are full—so people can visit very easily.”

Travelers who do visit the area are met with premium rates, since hotel prices are at an all-time seasonal low.

“The drop in visitor numbers has seen big price drops,” Tschann said.

Côte d’Azur hotels are reportedly being forced to slash their high season prices on travel sites such as Booking.com and Trivago by between 12% and 50%, as Paris recovers from last November’s attacks.

Luxury hit hard
The luxury sector in Paris and in Nice has been hit hardest, according to the luxury branch of the hospitality trade union, UMIH Prestige, which reported revenue per available room at luxury hotels in both cities falling by as much as 45% on certain days in late July.

“2016 has been a very difficult year for Paris hotels,” said Jean-François Martins, the deputy mayor of Paris, who is responsible for tourism in the city. “Hotels had to lower their prices a lot, especially in the luxury and upmarket segments.”

Martins said RevPAR in the capital has been shaken in the first half of the year by both terrorism and “the defection of Russian tourists.” Now Asians in particular are staying away since the latest attacks.

“From January to May, hotels registered an average 20% drop in room prices,” Martins said.

“Japanese and Chinese tourists are contributing a lot to this situation,” Tschann agreed. “Now we have to reassure tourists—our guests—that they can come here in total confidence.”

Security concerns
In order to improve visitor confidence, Panayotis said the one overriding concern now for all French hotels is to improve their security.

Panayotis said he believes the latest Nice and Normandy attacks will be far from the last, and urgent action is needed to boost hotel security with measures such as video surveillance and tighter individual guest checks.

« Now we are experiencing a series of attacks. This is something that has never happened before, and I don’t think it’s going to finish just like that,” he said. “So now we have to integrate security, which is something tourism professionals in places like the Middle East have long made a part of their daily business; they are pretty aware of the importance of security. The same can’t be said for France. We have to change that for the long-term, as we learn to live with and deal with the ongoing threat of terrorism. »

In doing so, he said, hotels particularly the luxury sector would have to take great care « to not spoil the guest experience.”