PARIS — WITH MANY countries worldwide economically shut down for the past two months, businesses have been struggling to weather the storm. But with COVID-19 social distancing measures potentially lasting until 2022 and international travel at a standstill for the foreseeable future, those in the tourism industry stand to be especially hard-hit. The struggle could be especially apparent in Paris, France, which relies heavily on international tourism.
On Thursday, May 14, French Prime Minister Edouard Philipe announced a major $19.4 billion (18 billion euros) stimulus package for hotels, restaurants and other businesses in the tourism industry. “What is good for tourism is often good for France, what strikes tourism strikes France,” he said.
Dubbed a “Marshall Plan” for the tourism industry, the package includes a solidarity fund through the end of 2020; more funds for larger government-backed loans to businesses; and an extension of government-paid partial unemployment for workers as long as companies are forced to remain closed.
While travel in France is currently restricted to within 100 kilometers (about 60 miles) of home, Philipe also announced that French people will be allowed to travel inside the country beyond that distance for vacation in July and August. He also said that the amount of restaurant vouchers, a preexisting government-funded program paying for all French workers to buy restaurant meals during the work week, will be doubled and extended to holidays and weekends.
Tourism: A Pillar of the French Economy
France set a new tourism world record in 2018, welcoming nearly 90 million foreign tourists, according to the French government. With 19.1 million foreign visitors, Paris was the second most-visited city worldwide, according to Mastercard’s 2019 Global Destination Cities Index. Revenue from international tourism was a record $60.7 billion for the year, or roughly one-sixth of France’s gross domestic product.
The current year is shaping up quite differently. All non-essential businesses including restaurants have been shut down since March 15. A progressive plan of deconfinement began on May 11, but plans for cafés and restaurants won’t be announced until the end of May. Borders will remain closed until at least mid-June.
Even when businesses do reopen, workers in the tourism industry say no one is sure how many businesses will survive the next year without international tourists.
More than one-third of French workers, including those who work part-time in restaurants and hotels, are currently on temporary unemployment. The program, established by the French government at the start of the coronavirus epidemic, pays businesses all or most of the salary of temporarily inactive employees (up to 4.5 times the minimum wage) to keep workers on the payroll.
Re-opening to slow foot traffic will put these businesses in danger of closing.
The coronavirus crisis is unprecedented. European businesses are facing an economic crisis not seen since World War II. While some European tourists have already made flexible bookings at his hotels for June and July, Machefert expects tourists from outside of the European Union won’t begin returning until September, with more cautious tourists waiting until May 2021 to book their vacations. “We’re optimistic. Others don’t see business coming back before September 2021,” he says.
For now, many restaurants and hotels are getting creative to streamline costs and make up for lost international revenue by focusing on the French market.
Most hoteliers pay a 15%-25% commission to reservation websites like Booking.com, says Machefert. These savings can be passed along to customers through benefits such as discounts, free meals and experiences. He says many other hoteliers and regional tourism offices have expressed interest, and he hopes to recruit more partners before officially launching the platform in the coming days.
Restaurants are taking a similar approach. Paris-area restaurants will also focus on attracting French tourists with gastronomic events and discounts, says Fontaine.
The industry will still face a big deficit, since 90 million foreign tourists come to France but French people make only about 24 million trips abroad every year.
The question for all businesses remains how long it will take for the French and global economies to return to quasi-normal.
Dazzling and enchanting, Paris, one of the most famed capital cities, offers more than just the iconic Eiffel Tower and awaits your post-pandemic visit.Paris, the beloved European favorite, can be counted on to be open for business as soon as travel resumes, and will welcome you to marvel at its delights.