In its second-quarter earnings call this week, Paris-based AccorHotels said its profit fell in the first half of the year because its home market of France was hurt by the fallout from repeated terrorist attacks.
"Right now people who have a choice between traveling to New York or traveling to Paris choose New York because they feel safer there," said Jean-Jacques Mori, chief financial officer of AccorHotels, during the call.
According to various analysts, the weakening of the British pound, following the U.K.'s vote to leave the European Union and continued attacks in the region, are having a negative impact on tourism business. In particular, the attacks in Paris, Nice and in a church in Saint-Étienne-du-Rouvray have dealt a blow to the tourist industry in France, which accounts for almost one-third of AccorHotels' revenues.
"With several of our key markets, including France and Brazil, shaken by crises and violent events, the group showed remarkable resilience in the first half of 2016," said Sebastien Bazin, CEO of AccorHotels.
Net profit for the company dropped by 23 percent for the first six months of 2016, compared with the same period in 2015, while revenue was down by 4.7 percent year-over-year. In its analysis of the French market, AccorHotels said revenue per available room was down by 14 percent in Paris for the first half of the year compared with 2015, and sales in Nice have dropped by 10 percent since the July 14 truck attack that killed 84 people and injured dozens more.
"The next three months are vital for the company, as we make 35 to 40 percent of our profits in July, August and September," said Mori. Still, it was not all gloom and doom for the hotel company: Revenue was up by 2 percent over 2015, boosted by "robust growth" in all of the company's key markets, except France and Brazil.