Hospitality Industry
2 min read

‘Gilets Jaunes’: What's the Impact for Parisian Hotels?

What does not kill you makes you stronger. That phrase was coined by German philosopher Friedrich Nietzsche who died in 1900 after suffering serious health issues for years, but it’s a phrase that still resonates today as hoteliers struggle to survive, adapt and thrive in the highly complex hospitality environment in the 21st century. France has been subject to a series of challenges over the past decade, from the financial crises at the end of the first decade of the new millennium, triggering an inevitable period of recession, followed by the 2015 terror attacks and, most recently, the local uprising of French citizens in the so-called ‘gilets jaunes’ anti-government protests, immobilizing historical locations in Paris such as the Champs-Elysées, Place de la République and Place de la Bastille.

 

The one common denominator of the three events is that they have all had a significant impact on the local hospitality industry.

 

Whereas the economic crisis led to corporate accounts of major banks being frozen, therefore highly restraining corporate travel to upper-tier hotels – always considered as a comfortable cushion and almost a given for the higher luxury hotel market – the second event, the terror attacks, significantly impacted on France as a global tourism destination. The effects on the Parisian hotel market were felt all the way through 2017.

Eventually tourism in Paris made a close to full recovery in 2018, seeing hotels thrive after the summer break … until the ‘gilets jaunes’ movement took to the streets, bringing Christmas shopping to a halt as shops and other businesses scrambled to protect their window fronts and the media projected an image of the next French Revolution.

The impact on the hotel business has been significant. Cancellations have been pouring in as visitors avoid traveling to France for safety and security concerns. Corporate travel has been rearranged as Paris has again become a liability, very similar to last year’s Barcelona crisis.

 

What can we take away from this?

  • Economies go through cycles of boom and bust, providing moments of peak performance and high profitability to moments of opportunity to re-assess if what has been done in the past still applies to the future. The latter is usually done during down cycles and provide for a chance to reinvent services or, as loans become more affordable as seen over the last decade, spur changes in ownership.
  • Times of crisis provide an opportunity to invest in marketing campaigns aimed at major tourist destinations as efforts are consolidated and government agencies get involved.
  • Most importantly, people forget over time. The degree of impact and length of recovery depend on the cause. While it is particularly difficult for Paris to suffer economic downside during the pre-Christmas shopping spree due to the political turmoil, the market should recover rapidly and the damage done will soon be forgotten.
Written by

Former Senior Lecturer at EHL

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