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2016-08-23 12:36:25
The accumulating costs of terrorism for French businesses
IN NOVEMBER Youssou N Dour, from Senegal, and others will perform at the
Bataclan concert hall in Paris. A year after gunmen killed 90 people there, the
idea is to let audiences feel safe again. The best way to defy terrorists, and
keep businesses going, is to resume normal routines.
That s a fine ambition. Yet tourism, entertainment and other business in France
are struggling. Heavily armed soldiers continue to patrol Paris s streets,
metro stations and riverside beaches, snapped by wide-eyed tourists as a new
sort of postcard from the city. A national state of emergency, in place until
January, plus pat-downs and bag searches at the entrance to any mall or cinema,
are constant reminders of ongoing threats. A blues musician laments that
concerts in his city are far less well-attended than before.
Fears are spreading that businesses face more than a temporary dip in custom. A
hotelier grumbles that bookings fall each time a ruling politician declares
that France is at war . Late in July AccorHotels, a big group, reported a
very pronounced drop in demand this year, as its revenues in Paris fell by
12%. Across France they slid by more than 2%.
Though France hosted the Euro 2016 football championship without incident,
passenger growth has stalled at Paris s main airport, Charles de Gaulle. A 3.9%
slump in June suggests deepening gloom, even as traffic surges across Europe as
a whole. On July 29th Eurostar said cross-Channel passenger numbers fell too,
with revenues down by a tenth in the second quarter compared to last year. That
matches the general downturn for foreign-tourist arrivals. Late July brought
19% fewer flight reservations by Americans than in the same period last year.
Trips by Brexit-pinched Brits fell even more. Nor are once-buoyant new markets
helping: France s embassy in Beijing says it had 15% fewer visa applications
than last year.
In rich countries terror attacks are typically shrugged off by most businesses
before long, as visitors resume postponed trips; financial markets routinely
brush aside a single assault, even big ones. Roughly a year after attacks in
Madrid (in 2004) and London (2005) hotel occupancy rates in each city were back
at old levels.
But France has suffered a steady drumbeat of recurring attacks, which poses a
worse threat to the world s second-most-valuable tourist industry, accounting
for 2m jobs. After 14 assaults in two years, and more in nearby Belgium, gloom
is deepening. In some cases official behaviour has gone from Gallic defiance to
skittish anxiety. Nice scrapped a big European road-cycling event, due next
month. Lille s mayor has called off a huge flea market, in September, which
last year drew 2.5m visitors. The boss of a union of hotel workers talks of a
catastrophic downturn.
Officials say that tourist revenue losses last year were around 2 billion in
total. This year will be worse. Nor is terror the only problem. Spring strikes
and floods were unhelpful. Cash-strapped Russian sun-seekers are retreating
from beauty spots, including French ones. Lower oil revenues affect high
spenders from the Gulf. Some firms that cater to tourists have themselves as
well as terrorism to blame. Disneyland Paris says revenues and visitors fell by
about a tenth from April to June compared to a year ago. It cites terror, but
people are also fed up with its dowdy, badly-repaired theme park.
Paris s tourist office bravely claimed this year that it saw growing tourist
resilience in the face of terrorist attacks . But if the downturn lasts into a
third year, or longer, it will have to learn from others prolonged slumps.
Thirty years of troubles clobbered private-sector job creation and tourism in
Northern Ireland. Decades of violence in Corsica put off investors in tourism.
Academics who studied the economy and tourism in Spain s Basque region, to the
1990s, found terrorism cut incomes by a tenth. In all three, tourism picked up
again once stability returned.
Until then, it makes sense for local authorities to boost the sums they spend
on private security firms, and to get them co-operating more closely with
police. They can perhaps divert more anxious visitors to cruise liners or
resorts where security measures can be more easily organised than on beaches or
in flea markets. French officials have vowed to spend more promoting the
country s attractions, though a boom in foreign visitors to Spain this year
suggests other destinations could make headway faster. The resumption of shows
at the Bataclan will also be a symbol of resilience as long as the crowds turn
up.