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London Calculates The Cost Of Attacks
Tourism and Sales Plummeted in July

By Mary Jordan
Washington Post Foreign Service
Tuesday, August 16, 2005

LONDON, Aug. 15 -- Department stores and other retailers in central London have lost an estimated $1.4 billion in sales, and hotels, restaurants and other businesses also report mounting financial losses because of terrorist attacks last month.

Retail sales in central London dropped 9 percent in July compared with the same period last year, according to statistics reported by the British Retail Consortium. "The bombings had a huge effect," said Dee Crooks, a spokeswoman for the trade group.

Crooks said shoppers have been reluctant to visit downtown stores after the attacks, compounding already lagging sales. "The key question now is how U.K. consumers and visitors from abroad will react to these attacks and if the impact will become more long term."

The July 7 subway and bus bombings -- which killed 52 people, along with the four presumed bombers, and injured 700 -- and the failed attacks on subway trains and a bus July 21 led to serious disruptions of the public transportation system. Even though the stations bombed July 7 have now been repaired, daily security alerts continue and subway ridership is down, particularly on weekends, according to transportation officials.

Tourism officials said that their industry, vital to the British economy, has been adversely affected but that it would be months before they knew the full impact of the bombings. Elliott Frisby, a spokesman for VisitBritain, the government tourism agency, said the economic toll had reached into the hundreds of millions of dollars. For the first six months of this year, overseas visits to London were especially strong, 14 percent higher than the same period last year, but the attacks have decidedly slowed that pace, tourism officials said. In 2004, nearly 28 million visitors came to Britain.

"Business has been better," said Mark Osborne, commercial manager of the Big Bus Co., a tour bus operator that carries about 1 million people a year. He said that his company's business declined by about 20 percent in July and that much of the loss was from families from other parts of Britain deciding to stay away from the capital. "They are clearly not comfortable coming to London now; maybe they will come back in autumn," Osborne said.

Osborne said, by comparison, the financial impact on his company was far worse after the Sept. 11, 2001, attacks in New York and at the Pentagon, which severely hurt airlines and tourism worldwide. "After that, people just stopped getting on airplanes," he said, noting that the drop-off now is not as severe.

Jamie Chappell, manager director for The Bench, a firm that conducts marketing analysis for hotels, agreed that London hotels are suffering less now than they did after the New York attacks. He said he believed that hotel business was off about 10 percent, so far. "We are far more interested in what is going to happen in the coming weeks," he said. "Hoteliers are holding their breath. If nothing else happens, they could come back pretty strong."

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