Social protest, the image of France as a destination is once again tarnished

5 min reading time

Published on 28/03/23 - Updated on 28/03/23

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The political management of the pension reform has pushed a part of the French population to the limit, leading to thousands of people in the streets and a process of renewable strikes. Beyond the demonstrations, or rather within them, certain radical movements are sowing chaos and this is what the press retains, conveying a catastrophic image of France as a destination. Apart from a damaged image, there are also concrete consequences with a visible loss of revenue in the hotel performance data taken from the MKG Consulting database on 27 March 2023.

Although this impact is fairly moderate and relative, since in absolute values the various territories and ranges remain up relative to 2019 and 2022, the comparison with days without a strike clearly shows this impact. The data shows a loss of revenue of -14% in Paris (i.e. RevPAR up by +18% on strike days compared to +32% excluding strike days), -12% in IDF excluding Paris (-11% vs +1%) and -8% in the Regions (+3% vs +11%).

The midscale offer (-14%) is slightly more impacted, probably because its corporate clientele is more affected by transport restrictions, while the budget/economy ranges are traditionally more resilient and the upscale/luxury segment has been supported in recent weeks by strong demand from international clients.

The impact varies significantly on a case by case basis depending on the days of mobilisation considered, with a peak on 7-8 March of around one third less activity in Paris and the Ile de France and -20% in the Regions compared to days without strikes. The day of 23 March strongly affected Paris (-28% compared to non-strike days), slightly less the Regions (-13% compared to non-strike days).

The GHR-IDF shared a press release at the end of the day on 27 March, on the eve of a new day of mobilisation, in which it "sounds the alarm about the impact of social movements on the activity of cafés, hotels and restaurants in the capital". According to data collected from members, 95% of professionals in the sector have noted a drop in the number of visitors to their establishments.

For Pascal Mousset, President of the GHR IDF: "The risk is that this drop in attendance will be the final blow to businesses that are already in difficulty. The Parisian properties already had to face the explosion in the cost of raw materials, then energy, and the erratic changes in Parisian regulations on their activities, all the while continuing to reimburse the PGE following the Covid crisis. The drop in OR is therefore particularly dangerous in this context of great tension.

There is no short-term impact of the garbage collectors' strike in Paris; international tourists in particular had already booked long ago. However, the impact is felt on the image of France as a destination, with videos and photos of clashes and rubbish being shown on the news and social networks in France and abroad. The postponement of Charles III's visit made the front pages of British newspapers, a clientele that France competes with Spain.

The blocking of the Louvre museum on Monday 27 March also sends a negative signal to tourists, some of whom will leave Paris without seeing the Mona Lisa.

More damaging in the long term than the postponement of King Charles III's visit, is the fact that France is in the spotlight with the upcoming Rugby World Cup and the 2024 Olympic Games. These two events are being organised in a period that is far from calm and which is also generating friction behind the scenes.

"The image of the capital is deteriorating day by day, with the consequences that we can fear for the upcoming tourist season. It is urgent: we must at least respond to the issues of public health. It is crazy that the health of Parisians and all visitors to the capital is now being held hostage to political palaver! The GHR IDF calls on the public authorities to take their responsibilities: this is a state of health and economic emergency!" adds Pascal Mousset.

In addition to the accumulation of rubbish, there are scenes of violence that have been added to the social protest. For example, the Lyon tourist office had to temporarily relocate its premises following the damage to its reception on Place Bellecour. The testimonies of hoteliers and restaurant owners present on the passage of the processions are also multiplying on social networks. All the professionals have in mind the damage to the Mama Shelter in Rennes, which has just opened, and some Parisian restaurant owners share their anger at seeing their establishments ransacked, but also confide their fear.

Frank Delvau, president of the UMIH Paris Île-de-France sums up: "There are many consequences. On strike days, there are cancellations that can reach 40%. We are once again seeing cancellations of seminars and congresses, and even the postponement of videoconference meetings due to the transport strike.

These reductions in travel also have an effect on restaurants, as this means that lunches or dinners the day before are no longer possible.

There is also a growing sense of insecurity due to rioters and night-time venues are being affected. Consumers are afraid to go out, especially in Paris where there are rubbish bin fires every day.

Strike days are black days for shops. Those that are on the route of the demonstrations choose to close.

Finally, these disruptions have an impact on the number of local tourists. Europeans who were planning to spend a weekend in Paris are changing their choice of destination. The closure of the Louvre Museum yesterday and the Eiffel Tower last week also has negative effects.

Beyond the core issues of pension reform, on which everyone can form an opinion, the extent of the tug of war between the government and its opponents has direct consequences on an activity that represents 8% of French GDP and whose entrepreneurs have been going from crisis to crisis since 2015. Although they have mostly shown resilience, the repayment of the PGEs, which began in 2022, combined with inflation affecting energy costs and raw materials, as well as the salary expectations of a disenchanted workforce, further complicate an equation that includes more and more unknown factors.

MKG Consulting

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