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France: France Tourism Profile

2015/03/11

France,Pays de la Loire

Lacklustre performance for French travel and tourism

2013 is at initial sight a good year for French travel and tourism. Its numerous assets, such as varied landscapes and key tourist attractions, further attracted incoming tourists. The country remained the leading tourist destination worldwide, receiving 85 million inbound arrivals in 2013. Tourist spending, both incoming and domestic, played a major role in sustaining economic activity in France, contributing 7% to France’s total GDP. Nonetheless, the number of French people taking domestic trips waned, and fewer left the country in 2013 as well. Key categories such as car rental and travel accommodation almost levelled off, whilst sales of travel retailers even dropped in current price terms on 2012.

Discounters and alternative players shuffle the cards

One of the major events of 2013 is the on-going upsurge of low-cost concepts in air transportation and car rental and the double-digit development of new modes of transport and accommodation, such as the sharing scheme and informal rent. Low cost carriers presently form a prominent part of France’s travel and tourism landscape, not only under the impetus given by Ryanair and EasyJet, but as well the counter-attack from Air France with Hop! and Transavia. The domestic expansion of France’s low cost carriers has made air transportation increasingly competitive with France’s national rail service. Since the crisis of 2009, the niche of car sharing schemes and private car rental has taken off, which urges traditional car rental players to react by focusing on discounts and last minute deals. Online sales of private accommodation via players such as Abritel and Homelidays, or peer to peer websites such as Airbnb.com, as well scored a hit in 2013.

Foreign tourists can afford to be additional loyal than the French

During the initial half of 2013, the drop in the number of French who went off on holidays was such that the headline of a trade press’ article was “Where are the French?”. Due to the fragility of the local consumers’ confidence and purchasing power, a worrying number of French consumers sacrificed their holiday budget in order to keep up their favourite leisure completed times. Meanwhile, the number of trips and mainly the sales from inbound travellers forged ahead in 2013, thanks to the growing number of travellers from Germany, Italy and Belgium, and mainly the increasing proportion of inbound arrivals coming from nations with emerging economies, such as Brazil and China.

Online sales drive increase in revenues in travel and tourism

Travel and tourism by presently had a high rate of internet penetration in France prior to the advent of the economic downturn. This trend was further consolidated in 2013 as the recovery of the French economy failed to materialise as consumers and businesses alike continued to seek the best price for money. While offline sales were strongly influenced by the slow business environment, double-digit increase was recorded in online sales in numerous categories. A lot of industry heavyweights were increasingly moving their activities online, nonetheless, the majority dynamic operators in 2013 were pure players such as Priceline and Expedia.

Additional uncertainty estimate for travel and tourism

Opinions differ on the projected fortune of travel and tourism in the coming years. For some sources, the industry will rely on its traditional key assets to ensure the loyalty of incoming tourists from Europe and the US, and should further attract upper-middle classes from the BRIC nations. In addition, the development of airports other than in Paris should fuel traffic to the provinces. However, there are some disturbing facts, such as the growing cocooning attitude of the French. Traditionally, even in times of recession, French consumers put aside money for their annual holidays; nonetheless, this was not the case in 2013. Given the growing competitiveness and attractiveness of border destinations such as London, Berlin and Spain, the French tourism industry can no longer afford to rest on its laurels and has to focus notably on increasing the level of sales per trip.

Impact of the recession on travel and tourism
 

The French tourism industry has been adversely impacted by the recession as people travelled closer to home and restricted spending. International tourism arrivals fell sharply, airlines suffered from lower request, hotel occupancy rates fell and secondary tourism businesses, such as bars and restaurants as well experienced lower revenues amid the downturn. The crisis has led to a “staycation” movement, where a growing number of consumers both in France chose to forsake their international holidays and preferred domestic travel or even holidays at home.
 

France is expected to maintain its leading position

France\" style=\"color:#0495FF; font-size:15px; font-weight:bold;\"> France is expected to remain the world’s number one tourist destination in 2009 since all major highly touristic destinations were impacted by the crisis and experienced sharp declines in international arrivals. France has proved to be additional resilient than in other nations. These combined trends have helped limit the decrease in the tourism sector sales compared with other destinations.
 

New trends in consumer behaviour

One of the majority significant trends that emerged from the recession has been the search for price for money – an increase in thrift and frugal living. In some categories, this movement has taken the form of trading down. Additional and additional tourists are staying closer to home, travelling economy instead of business class, booking a three-star instead of a four-star package, reducing expenses on non-essentials and choosing low-cost providers. The French are increasingly booking their holidays at the last-minute and using the web. Online travel agencies are benefitting from the crisis and gaining market shares.
 

A marked decrease in business travel

Following the tightening of corporate travel budgets, in 2009 executives made fewer, shorter and cheaper trips and switched from luxury extras in favour of basic efficiency and good service. This shift had an impact on airlines and hotel sales, particularly in the luxury segment.
 

Travel retail industry reorganisation

Smaller tourist agencies faced difficulties and in several cases closed down in 2009, while larger market players focused on low-cost propositions. However, the situation varied according to the structure and activities. Travel retailers specialising in business travel and MICE were the majority heavily impacted.