Indigo Consulting   Paris, France

Economy

Economy with Tourism Related Impact

The current situation in France is better known as the “crisis of the purchasing power”. The prices of food, rents, oil and gas have increased by 3.7 percent over the last year - and the wages have remained the same: the French middle class has no money left for leisure and travel. From 2002 to 2007, the purchasing power had gone up but should loose 1.3 percent by the end of 2008. This has an immediate effect on tourism as the French cannot afford to travel as far and as long as they used to, these changes have boosted new travel trends.

The main French Tour Operators, such as Jet Tours and Kuoni, have noticed that the crisis has not really affected luxury travel. They have all issued new editions of their luxury collections for 2009 – Secrets de Jet Tours and Emotions de Kuoni – as the 2008 brochures generated excellent results. For example, Emotions brought 8.8 million Euros to Kuoni this year.

The French parliament has recently changed the law on retirement, allowing people over 65 to go on working for another 5 years. Senior citizens are high-quality travellers, they have time and money – this amendment could have a double-edged effect: senior workers might have less time to travel or on the contrary, they will be able to afford trips that are more expensive.

Tourism

Tourism Trends

In the actual economic situation, the French have changed their travelling habits. Because they have less purchasing power, they now chose to go on shorter trips, more often in order to spread out the expenses over the year. Nowadays, the destination-choice is more and more motivated by the budget: travellers will choose a theme (seaside, mountain, sport, etc.) and the best value in that category.

Concerning this new way of travelling, Europe has become their first choice because of lower flight prices.

The French have become great users of the web when organising their holidays. Online, they have immediate and easy access to a wide selection of hotels and flights and to the total cost of the trip. They can easily check the given information and visit personal holiday websites to confirm their choice. 4.6 million French internet users have web pages on which they talk about their trips: with pictures, comments, advices, tips, etc. they have become a real tool for the future traveller organising his trip. French travellers also have the habit of booking through a Tour Operator or travel agent if the package offers an added value such as a ticket for the theatre or the opera, entrance for an exhibition, gastronomic meal, etc. In 2007, 30.6 million French people over the age of 15 went on holiday, short or long haul. Forty nine percent of these travellers booked their trip online.

Tourism Industry

The tourism figures for the summer 2008 in France are stable compared to the year before. It seems that the world economic situation has not affected national tourism yet. From July to September, tourism activities have increased from 0.2 percent to 0.8 percent.

The number of guests staying in campsites has risen by 1.3 percent, whereas the number of hotel guests was stable in July and August 2008 but lower than in September 2007, this is a perfect indicator of the lower holiday budget. The results of the autumn school holidays were good, because people have made reservations before the crash. For the winter of 2008/2009, the French ski resorts have received slightly more booking than last year but these figures can vary with the weather.

Business travel is not suffering much for the global situation yet, but the important companies are tightening their budgets, for example by booking hotels in a lower category and by preferring low-cost carriers instead of business class flights.

France has defined the new generation of travellers as being from the emerging countries: they are indeed new destinations, but they are definitely new tourists. Countries such as Brazil, Russia, India, China, Dubai and Mexico represent a real target for France as a travel destination. With nearly 82 millions tourists visiting France in 2007, the French Ministry of Industry and Finance has decided to set up a new program to help develop national tourism and make it an essential part on the country’s economy. The three main targets are:

  • Attract more visitors from the emerging economies such as India, Brazil or China to all parts of France offering a better service and accommodation.
  • Enhance and modernise the offer for tourists
    Communicate on France as a travel destination.