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Brasseries, shops and other small businesses in Paris are suffering a sharp drop in sales as footfall dwindles before the Olympic Games, with arrivals of tourists and ticket holders yet to make up for an exodus of locals.
The gloomy retail period, coupled with warnings over weak revenues from some airlines and hotels during the event, has cast doubt on the scale of France’s economic boost from the Paris 2024 Games.
Inside a security perimeter along the banks of the Seine, impenetrable to anyone who has not preregistered ahead of the opening ceremony on Friday, the collapse in clients has been even more drastic.
“It’s strange to have so few people here for lunch,” said waiter Marc Houlier at the Deux Palais, a café on Île de la Cité often packed with lawyers from a nearby court.
Some restaurant owners were experiencing a 50 per cent drop in July sales and were concerned about paying rents and salaries, said Bernard Cohen-Hadad, head of the CPME small business lobby for the Paris region. “We knew it would be difficult for deliveries and with metro closures . . . but we had not expected this lack of French or foreign tourists.”
For other businesses the decline in revenue was as much as 70 per cent, according to hotel associations and other lobby groups that called for financial help similar to that disbursed during the Covid-19 pandemic.
“The economic situation for many was already difficult due to inflation and high energy costs,” Francis Palombi, who heads a federation of commercial companies, said, adding that “anxiety-inducing coverage of the lockdown” had persuaded many Parisians to flee the city.
A regional committee to examine compensation claims is being set up, while President Emmanuel Macron on Monday said his caretaker government would look into the fallout. The state helped pay for temporary unemployment schemes during the pandemic.
Though some businesses may not recoup losses, spending is expected to pick up when the Games begin — football and rugby tournament events are already under way — with restaurants, the metro system and other services raising prices to cash in on demand.
The Olympics are expected to contribute to an expansion in France’s output this year, said economists and officials.
The Insee statistics office forecast a 0.3 percentage point boost to gross domestic product in the third quarter, roughly in line with Allianz estimates of an overall €10bn boost to GDP from tourist spending and government investment in infrastructure.
Locals’ pre-Olympics exodus was expected, including by the Paris 2024 organisers, although the economic effect has been magnified by the move to hold many events in the city centre.
Before London 2012, deserted streets grabbed headlines, as did worries over ticket sales, but a surge in activity during the Games made up much of the earlier shortfall. The UK also enjoyed a tourism boom the following year.
Airlines Delta and Air France-KLM have warned of hits to revenue as tourists who would normally come to Paris in the summer steer clear.
In the hospitality sector, hotel group Accor, an Olympics sponsor, expects a modest 2-3 per cent boost in revenue from the Games this year, but it is banking on the long-term Olympic effect. “I’m telling my teams: ‘this is our chance to be visible for the long run’,” said Accor’s European chief executive Patrick Mendes.
Occupancy levels are now close to 76 per cent, up 3 percentage points from the same period last year, according to consultancy Lighthouse. But advertised room prices have fallen some 44 per cent from a peak reached about a year ago, dashing hoteliers’ hopes of juicier returns.
At the Deux Palais café In the barricaded zone, only about a dozen people were having lunch on a midweek visit and normally harried waiters stood by the bar chatting. Houlier said the management had given some staff the week off but planned to bring them back next week when the strict lockdown was eased.
Even outside the perimeter, business is limp. In the northern district of Montmartre, there are still tourists visiting the Sacré-Coeur basilica. Ahmed Alim, manager of a stand selling postcards and souvenirs, said sales were steady but he has about one-third fewer customers than normal.
“In the long term this is going to be a success if it all goes well, Paris will be seen by millions of TV viewers and that will compensate for this morose moment,” said CPME’s Cohen-Hadad. “But in the short term, the economic boom is not there.”
