France unveils 'massive' €18bn plan for hard-hit tourism sector

France on Thursday announced measures worth €18 billion to support its tourism sector, which has been hammered by the coronavirus crisis and resulting shutdown in beaches, leisure attractions and hotels.

Nearly 90 million foreign tourists visited France in 2019, making it the most visited country in the world, according to government data. Tourism accounts for almost 8% of the country’s €2.3 trillion economy.

“Tourism is facing what is probably its worst challenge in modern history,” Prime Minister Edouard Philippe told a news conference. “Because this is one of the crown jewels of the French economy, rescuing it is a national priority.”

“This very French pleasure, which is at the heart of our identity, to meet up, eat well and have a chat, has been compromised by the lockdown first, and then the conditions of lifting that lockdown,” Philippe said.

The prime minister said that with 95% of hotels closed, the government’s priority was to avoid bankruptcies and job cuts.

To prevent job losses, the government is reimbursing companies for 70% of the gross wages of workers they put on furlough, and Philippe said that it will extend this measure until at least the end of September.

In other sectors the government is now looking at winding this support down as France emerges from a nationwide lockdown.

In April, French hotels company Accor, which runs brands such as Ibis and Sofitel, said it was cutting spending and had placed the bulk of its staff on furlough or unemployment schemes.

Philippe said he hoped restaurants would be able to reopen on 2 June in the country’s “green zones” where the virus is not circulating widely.

That would, however, rule out an immediate return of the dining scene in Paris, a virus hotspot “red zone”.

The prime minister sought to reassure people that the cherished summer holiday - during which Paris virtually shuts down and holiday-goers head for beaches and country houses - would not be lost.

He indicated that restrictions including a ban on trips over 100 km and the closure of beaches would be no obstacle during summer months, unless the outbreak picks up again.

“We must set a goal, and widen our horizons,” Philippe said. “The French will be able to holiday in France in July and August,” he said.

Measures outlined by Philippe to rescue the sector, which he said totalled a “massive and unprecedented” €18 billion, included a €1.3 billion investment plan for direct cash injections into businesses by state banks.

Businesses with up to 20 employees and €2 million in annual revenue in the tourism, hotel and restaurant sector will also be able to tap a solidarity fund until the end of the year, to receive grants of up to €10,000.

There will also be a social security tax break for May and June payments. The amnesty will continue as long as businesses have to remain shut. Tax exemptions will in total amount to €2 billion, Philippe said.

More on this subject: Coronavirus

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