Will Travel Warning Hamper Europe's Economic Recovery?

The U.S. Department of State issued a travel alert on Sunday for Americans who are in Europe or are planning to go there. The alert did not say that Americans should avoid Europe, but that they should be cautious while visiting tourist attractions or in transportation hubs.

The alert was triggered by evidence of terrorist plots that might originate in Pakistan and aimed at targets in the United Kingdom and France.

Will some Americans take the alert seriously enough to avoid travel to Europe completely? How much will it affect tourist revenue in nations like France?

France was the most visited travel destination in the world with 75 million visitors last year. The nation also has the third largest income from travel of any country in the world. France's gross domestic product (GDP) contracted 2.2% in 2009. Like most developed nations, GDP is up very moderately this year, but not enough to weather a significant downturn in one of its most important industries.

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Other nations in the European Union which rely very heavily on tourism are not likely to be included in the warning. But there is the chance that travelers will stay away from Europe altogether.

Any drop in tourism to Spain and Greece in particular would be very painful. Those countries both have a high volume of tourists and their economies are currently very weak. For them, this travel warning presents particular risk.

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