PARIS— Since the U.K.’s Brexit referendum in late June, the French tourism industry has been dealt another shock with the deadly attack on Nice’s Promenade des Anglais on 14 July. While the impact of those terror attacks on tourism still has yet to be determined, hoteliers in France are cautiously upbeat when it comes to adapting to the effects of Brexit.
For months, tourism and hotel industry players across France have been posing the question of what might happen if Britain leaves the European Union.
Now they are living it, and many hoteliers were caught off-guard, said Sarah Grellier, GM of the Holiday Inn Paris Notre Dame.
“It was a nasty shock for us, because of course we heard it could happen, but we didn’t really believe it would,” she said. “Now we just have to adapt. We work mostly with leisure travelers, and I think the impact will not be too strong.”
Tourism impact
France is the leading city break holiday destination for British tourists, according to the national tourism development agency Atout France. In 2015, 11.8 million British people visited France for an average weeklong stay, led by Paris, Normandy, Brittany and the Provence-Alpes-Côte d'Azur region, according to the agency.
Now the hotel industry is concerned that the tumbling pound and fears of a Brexit recession could make matters worse.
According to the Deloitte ABTA publication, “What Brexit might mean for U.K. travel,” France is the second leading European travel destination for British leisure and business travelers after Spain. But it warned Brexit might have disastrous fallout on that with the adverse exchange rates, steeper medical insurance and import taxes.
“We already saw that in 2008 and 2009 during the financial crisis,” said Thierry Gregoire, regional president of France’s biggest hotel industry union, the UMIH, for northern France, and hotelier at Le Caddy in the seaside resort of Le Touquet.
“We had less English tourists than usual. ... They stayed at home. They are people who show a huge lot of solidarity to each other—and they’re very pragmatic, so we could see a similar thing now post-Brexit.”
Gregoire said the whole of the Nord-Pas de Calais region is dependent on British tourists, who represent the biggest foreign tourist market on the Channel coast.
“I don’t think Brexit will have the same impact—this is more political than economic—the context is different. Sure the numbers of visitors might slump a bit ... and sure, if the pound stays lower, the Brits I think will continue to come, but they might drop hotel category from 5- to 4- or 4- to 3-star.
“We’re monitoring it very closely, because at my hotel British visitors represent 80% of our clientele. They are telling us that it will make no difference to them. So I’m very optimistic.”
Gregoire feels it will even help put the region on its toes a bit in marketing itself better to British holidaymakers.
“I think we’ve become too complacent, because we’re just across the other side of the Channel and think the English are an easy tourist catch. In 2015, shuttle ferry services rose by 37%, but the spending by Brits was down 20% ... so the region needs to work on that.”
Luxury and business travel predictions
All hotel and tourism industry players agree it’s too early to measure any real Brexit effect in figures. But some hoteliers, including Grellier, fear the occupancies may have been underpinned by the Euro 2016 fever, and they might now see a drop.
Like many of her colleagues, she believes it’s not changes to passports that pose a big threat, but those to buying power with the pound whittled to an all-time low against the dollar in over three decades in the wake of Brexit.
“Of course we fear we will have some effect, especially depending on the currency," Grellier said. "But I think there will be no problem with visas and people should continue to travel normally.”
Alessandro Cresta, GM of the Grand Hyatt Cannes Hôtel Martinez on the famous Boulevard La Croisette, said he feels upscale and upper-midscale hotels stand to weather out any problems with the pound better.
“The luxury sector always holds up better in any crisis,” he said, “and often continues to perform very well. If the pound continues to fluctuate of course this will affect the midmarket, and not just in France.”
"This region belongs to the English people for 300 years!" said Stephanie Gombert, owner of the Château de la Treyne in the Dordogne Valley with her husband Philippe Gombert, president of the Relais & Châteaux luxury hotel group.
"The Brexit is a pity," she added, "but I don’t think that we are going to suffer so much through this. We have a lot of regular guests, and I don’t think that the luxury market in general will suffer. Maybe a little bit, but not so much."
Cresta said the Brexit effect is not yet being felt on the French Riviera, which relies on British tourists more than any other foreign visitors.
“Last year the market grew and the situation remains very stable and positive ... In the past two weeks since Brexit, we have not seen any change in terms of reservations, or any significant change at all for the whole of summer in terms of occupancies and bookings compared to last year,” he said.
“I would say we’ve had even more English because of the football (Euro 2016) ... so it may well be a distortion.”
Paris hotels stand to be hit harder by any Brexit economic fallout than southern France because of the importance of business tourism, Cresta said.
“If the pound is unstable, it will have an effect, of course,” he said.
Grellier agreed.
“I think for leisure tourists, it will be the same ... and transport connections are not affected," he said. "But let’s see what will happen with business travelers ... maybe we will see some effect on them, depending on the company they work with.”
Less than optimistic
Not everyone is optimistic about the upcoming challenges of Brexit for the French tourism and hotel industries.
“The British clientele—who make up the core of tourism business in the region—will turn their back on Europe and opt for cheaper, longer-haul destinations such as Northern Africa over Europe,” warned Gilles Grattepanche, the former GM of the hotel Le Westminster Le Touquet, which was acquired by the Barrière group in May.
Others too are concerned British tourists might go where they’ll get more bang for their buck.
According to the Chamber of Commerce and Industry for the Provence, Alpes-Côte d’Azur region, the British are the leading foreign market with 830,000 annual stays, 7.2 million bed nights and economic benefits estimated at €800 million ($889 million). The organization said the tourism industry is visibly concerned about the fallout of Brexit.
“It is of course too early to assess the impact on regional passenger leaving the U.K. from the European Union, but already the concern is palpable among tourism professionals, with many questions concerning freedom of movement of British citizens, the health of the pound, transport operators ... ” it states on its website.
One question no one wants to address is what if favorable exchange rates steal international vacationers away from France to the U.K. That’s apparently already close to the case for Chinese tourists.