Impact on British tourism to be seen

A plane flies over the London Eye on August 10, 2006.

TEXT OF INTERVIEW

KAI RYSSDAL: Marketplace's Stephen beard is in London and that's where we go now. Stephen, let me ask you first of all about last year. The English economy is just now coming out from under the train bombings of 7/7.

STEPHEN BEARD: Well, the contrast with 7/7 is quite interesting because on that day of the London tube bombings, more than a year ago, the stock market fell very sharply. Today it didn't, it fell a little. There were some quite big falls for airline stocks, predictably, and hotel chain and tour company shares fell too, but overall the market was NOT badly hit, so investors are sort of biding their time and wondering where this is going to lead and whether there may be more serious long term consequences.

KAI RYSSDAL: What is the general economic sense right now in the English economy and across Europe? Do you think you're going to be able to come back quickly, or might it take some time?

STEPHEN BEARD: Well, the big question is about tourism. It's estimated that last year's tube bombings cost the British economy about one and a half billion dollars in canceled vacations and so on. The big worry is that this plot will deter American visitors, who are by far the biggest vendors. And Americans have been flocking back to London. In fact, about a week ago the tourist chiefs here were celebrating the fact that Americans were back in their pre-9/11 numbers. So London hoteliers, like Sally Beck, are very worried about the fallout from today's developments:

SALLY BECK: We were all very, very happy. Business was buoyant, London was back on the map, there was a pent-up demand from last year with 7/7, this year they were all coming and hotels certainly were feeling the upturn, having had, you know, three or four very difficult years. And today it's just knocked us all back a bit, thinking "oh gosh, how long is this going to last, what does this mean?"

STEPHEN BEARD: Well we don't know the answer to that question yet, and it will take several days, or perhaps weeks, to find out where we ARE heading.

KAI RYSSDAL: Stephen, let me ask you very quickly about Heathrow Airport. Is it still effectively closed? What happens tomorrow? Are there tens of thousands of people sitting there waiting?

STEPHEN BEARD: No, it's not effectively closed, in fact the ban on short haul flights has been lifted by far the majority of long haul flights are going ahead. We haven't seen large numbers of Americans stranded here in London, most of them do appear to be getting away. However there are going to be long delays, and these delays seem like to continue well into the weekend.

KAI RYSSDAL: Marketplace's Stephen Beard in London today, thank you Stephen.

STEPHEN BEARD: Thank you Kai.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, the most widely heard program on business and the economy in the country.

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