Focus on France Ian Sparks reports from Paris

EURO-REPORT

FOCUS ON... France

Ian Sparks reports from Paris on efforts to revive France’s tourist industry.

France is to plough €10 million into boosting its tourism industry after a succession of terrorist attacks, strikes and floods saw visitor numbers plummet by 7 per cent this year. Paris has lost about €750 million in income since January due to the fall in tourists, while the number of nights booked in hotels is down 11.4 per cent, industry officials said.

Luxury hotels in the capital were hit the hardest by the revenue crisis, reporting a decline of between 30–40 per cent in wealthy guests. The number of Japanese visitors almost halved in the first half of the year, compared to the previous year, according to tourist board figures. Russian numbers were down by more than a third, Italians by a quarter and Chinese visitors by almost a fifth.

Visitors to the Arc de Triomphe fell by more than a third in the first half of 2016 from the same period a year earlier, the tourist board said. The Grand Palais museum reported a 43.9 per cent slump and the Palace of Versailles just short of 20 per cent.

Frederic Valletoux, head of the Paris regional tourist board, described the losses as an ‘industrial disaster’ and said the city was now in need of massive new investment and a rescue package.

Visitor numbers first started dropping following the terror attack in Paris last November, when 130 people were killed. Officials had hoped the trend would reverse following the Euro 2016 football championships. But just days after the competition ended, a man believed to be acting for Islamic State drove a lorry into a crowd celebrating Bastille Day in Nice, killing 86 people.

Christian Navet, head of the Paris-Ilede-France hotel federation, said: “The Nice attack derailed our hopes of a recovery. It’s a dramatic situation and there will be job cuts in the sector if things do not get better by the end of the year.”

And Georges Panayotis, head of hotel research firm MKG group, added: “Hotels are already laying off staff though they’re not saying it. This industry is on its knees and it needs relief measures now. Hoteliers need the weapons to fight back.”

The French government has now unveiled a €10 million plan to restore its image and bring tourists back, by launching a series of publicity campaigns promoting France around the world. The project aims to woo visitors back to France’s museums, cafes, beaches, and cultural attractions, after many people cancelled their trips or opted for other destinations.

Tourism is a €170 billion industry in France, with 90 billion of that accounting for cafes, restaurants and hotels alone. With 2 million people working in the tourism services sector, a decrease in tourism arrivals can have a ripple effect throughout the entire economy.

Foreign minister Jean-Marc Ayrault said: “Although we have identified problems, the hope is to have a positive message to promote France as a tourist destination.”

But according to Steve Born, head of marketing for the US-based tour group Globus, the return of visitors may already be on its way. While Globus saw a dip in bookings to France in the months following the November 2015 attacks, the bookings for 2017 are already back on par and competing with other European destinations. He said: “France has it all. For those that are looking to visit Europe, it’s such an iconic experience and must-see destination.”

Anti-gloom message

Outside the tourism sector meanwhile, optimism is returning to the French economy, with the number of unemployed dipping below ten per cent to 9.6 per cent in the first two quarters of the year – the first drop since President Francois Hollande was elected in 2012. This is a major boost for the deeply unpopular Socialist leader, who had vowed not to run for re-election next year if unemployment does not come down.

Experts are also predicting that after four years of near-stagnation, the eurozone’s second-largest economy is expected to grow at more than 1.5 per cent in 2016.

Record-low interest rates, a cheaper euro and looser fiscal policies in France and in the eurozone have also boosted business and consumer confidence. Measures such as 40 billion euros in tax breaks awarded to companies by Mr Hollande in 2014 have improved profit margins, giving much-needed financial breathing room.

French companies have stepped up investments by 2.4 per cent in the first quarter. Households are buying more goods and homes.

This feelgood factor was demonstrated this month when 700 French executives and business chiefs rode in convoy down Paris’s Champs Elysees on battered blue mopeds in a bid to combat a climate of economic gloom. Decked out in matching blue capes and pink helmets, the bosses rode down the boulevard on their Motobecane mopeds, much beloved in France during the 1970s. Organisers said the event was an ‘apolitical’ attempt to increase confidence in the French economy and show solidarity with employees.

Organiser Dominique Ravon said: “It’s an anti-crisis, anti-gloom message. The goal is for entrepreneurs and their employees to come and show that everything is alright.”

Remi Peraud, a bank manager with the Banque Populaire who took part in the twowheeled demo, said he wanted to show that ‘bosses know how to have fun’.

The event was also designed to allow business chiefs to discuss new potential collaborations.

Paris-based Merrill Lynch economist Gilles Moec said: “It is time to stop beating ourselves up. This cyclical recovery has legs – provided the disruptions brought about by the strikes and ensuing political uncertainty do not last for too long.” n