Concerns are growing about London's reputation as a safe tourist destination following Thursday's attempted bomb attacks in the capital.
The industry hopes tourists will remain defiant
Figures from the Tourism Industry Emergency Response Group estimate that the 7 July attacks alone could cost the UK industry about £300m.
However, travel companies say they are expecting business as normal.
But economists are concerned that the second wave of bombing incidents could harm the industry in the longer term.
The travel and tourism industry, however, is keen to stress that it is "business as usual".
"We don't expect this to result in a downturn in tourists to London," said the Association of British Travel Agents.
"Following the 7 July incidents, there has been no noticeable reduction in visitors to London or in forward bookings."
British Airways confirmed that there was no significant dip in bookings after the 7 July attacks and it does not expect the latest incident to have any significant impact.
Long term doubts
Thursday's blasts come at a crucial time for the travel industry as the school summer holidays get underway.
London's mayor Ken Livingstone has already reported a "dramatic reduction" in British people bringing children to London from other parts of the UK.
Anita Thornberry, head of tourism at the London Development Agency, told the BBC that "there's bound to be an impact".
"But as to what that impact is it's too early to tell," she said.
Economists, on the other hand, fear that two attacks in as many weeks could put tourists off from visiting the capital in the future.
Although very few existing bookings have been cancelled future bookings could suffer.
"Tourists who already may have thought twice about visiting the UK may be discouraged from visiting given that 7 July was not a one off," said Alan Clarke, economist at BNP Paribas.
Other experts fear that the incidents could still deal a fresh blow to a softening UK economy, which is critically reliant on consumer spending and consumer confidence.
The latest figures show the economy growing at its slowest rate for more than a decade.
"It is a matter of how long that shock stays in people's minds," said Grant Montague at consultancy GfK Martin Hamblin.
Time to heal
In the weekend after the first bombing there was a 20% reduction in shoppers in central London.
But research group SPSL discovered that the blasts did not deter shoppers as much as analysts had first feared.
The company said that it probably would take six months for sales and visitor numbers to recover to pre-blast levels.
New York took 18 months to fully recover from the 9/11 attacks, SPSL said, while Madrid took six months to recover after its train bombing attacks.
However, after the latest incident, SPSL says the ongoing threat of more bombings is bound to keep people away from the High Street .
Shoppers' numbers on Thursday fell back to about 75% of the previous year's level.
Retailers point out that because the latest attacks were not at rush hour or at prime shopping locations it shows there is no safe time or place to travel.
SPSL said this was "not good news for London or its retailers".