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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.