Economic Issues Relating to The Tourism Industry of France - Essay Example

? The economic issues relating to Tourism industry of France Table of Contents Introduction 3 Tourism Industry of France 4 Issue 5 Discussion 7 Government policies affecting domestic Tourism 9 Weather conditions affecting Tourism 10 Tourism affected by illegal usage of political status 10 Reference List 12 Introduction Presently the industries are not operating in an economy that is characterised by scarcity but by plenty where everyone is operating in a limited space. To achieve success in today’s crowded and globalized economy, organizations are seen to offer differentiated products or adding value to their products and services. Before going for any product or services the consumer apart from comparing the physical features of the product also goes for comparing how the product or service is delivered, who is the service provides and the price of the product. Value addition refers to technology, reputation, brand and design that go towards the development of the product or services. According to the reports of the World Trade Organization, service industry is one of the fastest growing industries in the world that generates “two thirds of global output, one third of global employment and nearly 20% of global trade” (Nanayakkara, n.d., p. 9). A continuous growth is experienced by the tourism industry that surpasses the automobile, food products and oil exports. In international commerce tourism has now become one of the major players that has become one of the primary sources of income for several developing countries. People travel to experience the culture of other places, which is manifested through the art and craft, music, food, language, monuments, historical architecture, costume and language. France is a country that has highest density of museums, monuments and festivals. It also has amazing picturesque locations. Since 1990s it has been placed at the number one position in ranking of tourist destination that makes it ahead of Spain and United States. Tourism industry is regarded to be one of the leading industries of France that contributes over 30 million Euros to trade, leisure and hotel industry of the country (France.fr, n.d.). The study focuses on the economic issue related to the tourism industry of France. Tourism Industry of France Tourism adds to the vitality of the national economy and creates almost one million employments, which mainly comprises of young people. Atout France is the national agency that is working as the main body in promoting the tourism industry of France. From the year 1960 till 1980 tourism has lead to the creation of huge numbers of infrastructure and large developmental programs both in the mountains and the coast, which has extended mass tourism, creation of winter sports, attraction to the coast and sundrenched area. Due to the infrastructural developments and the facilities created that was a major subject under the national plan has lead to the economic development of these areas. The tourism industry has also caused development of the transportation facilities to enhance the convenience of the tourists. Thus the tourism industry has done a major contribution towards the economy of France (Blanke and Chiesa, 2013; Euromonitor International, 2013). Tourism industry has been seen to be successfully exploiting the collective marks. France is not an exception in this case. An association of hoteliers are tied together with the motto to promote the privately owned hotels that are operating in rural settings under the same label “Logis de France” which is the registered trademark. The main objective of such a concept is to provide quality food and services that has a local flavor in them. They wanted to prevent the rural area from getting abandoned and create new product that adds value by attaching a label, which compels the hotels to adhere to the strict criteria. There are nearly 3000 hotels that are registered under this association and are operating not only in France but have expanded their business outside France too. The hotels are grouped as per their themes and categories. Because of this highly respected and recognised trademark, the individual establishments are now able to compete effectively and efficiently in the highly competitive service industry. Their involvement with the association will provide them with appeal and recognition (Nanayakkara, n.d.). Agri-tourism is another growth engine that strengthens the tourism activities in the areas that focuses on the agriculture. They may come under an umbrella brand or independent or any destination brand. The wine industry is the best instance for such tourism. Agri-tourism that encompasses such product is one of the fastest growing sections in the tourism industry. This includes tasting the samples of the product in the wine yard and the local restaurants, tour to the production facility, spending time in the local wineries and experiencing and participating in the festivals. Bordeaux is the region in France that is famous for wines and creates a market that targets to the niche market of tourists who are wine lover. Issue France continues to attract tourists from various parts of the world by its rich cultural heritage and creative industries. The country has hosted many fairs and exhibitions. Along with this the country also excels in infrastructure of ground transports that include both roads and railways as well as excellent infrastructure in air transport. But a recent report published by the World Economic Forum shows that France lack competiveness in the global tourism industry. In recent times the overall regulations and rules framed by the government are not supportive and helpful in promoting the industry. This has resulted into the decline of the overall ranking of the Travel and Tourism industry from third position in the year 2011 to seventh position in the year 2013. Figure 1: Travel and Tourism Competitive index (Source: Blanke and Chiesa, 2013) Moreover lack of availability and quality of qualified labours has worsened the situation. The tourism industry lacks competiveness is a sensitive issue and has made the economy to come to a halt. Nobody would have ever expected that such a booming industry like tourism will be lagging behind like this. The report showed that Switzerland is leading the league of 140 countries by proving its ability and attractiveness to develop the tourism industry. Though France has taken several initiatives and invested heavily to increase the attractiveness of the country but the policy rules and regulation of the government has made this effort null and void (Blanke and Chiesa, 2013). Travel and Tourism has been regarded as one of the important economic activity in amongst large number of countries around the world. According to the World Travel and Tourism council the total contribution of tourism towards the economy can be segregated into direct, indirect, induced and total contribution (The Authority on World Travel and Tourism, 2013). The direct contribution of tourism towards GDP is indicated by the internal spending that is signified by the overall spending of the residents and the non residents within the border of a particular country for the purpose of business and leisure. It also includes the spending done by the government towards the service of tourism directly to the tourist like spending towards culture and recreation. The direct contribution of Tourism towards GDP takes into account the direct services linked with the tourists like the leisure, recreation, travel agents, airports, airlines and hotels. The total contribution creates a wider impact on the economy of the country since it includes both the induced and the indirect impacts. The indirect contribution includes the GDP and the processes performed towards the tourism industry enhancement. The investment towards tourism includes activities like construction of hotels and resorts or purchase of aircraft. In simple terms any activities that contribute towards the current and future prospects of the industry are said to contribute indirectly. Employment in the tourism industry includes involvement of the individual in the hotels, airlines or other transportation services, travel agents and other organizations that deal with the tourists. It also includes the activities of the resorts and restaurant towards the recreation and leisure of the tourists. Another key component that contributes directly to the travel and tourism industry of France is the visitor exports. Tourism industry of France can be thus seen to make major contribution towards the country’s economy. It contributes towards the GDP and generates huge employment for the youth of the country. But according to a recent report of World Economic Forum the competitiveness of the French tourism has reduced. Thus it can be seen to affect the tourism industry, which will also affect the GDP of the country. Moreover the report has also revealed a decline in the prioritization of the tourism sector, giving an overall ranking of 35. Discussion The report showing reduced competitiveness of tourism industry of France is very shocking for the not only the government but also the people who are engaged in this sector. The report has suggested that rules and regulations are responsible for such a downfall. Along with this the poor quality of workers are also held responsible. The government of France has been seen not to prioritise the sector of Travel and Tourism. However Sylvia Panel, the tourism minister of France dismissed this accusation. According to her the government is well aware of its priorities and the professionals working in this industry are sincerely, dynamically and wilfully associated with the implementation of the government plans. Moreover she claims that tourism industry is one of the magnificent and most valuable assets of the country. The way the industry has survived the financial crisis that has paralysed many sectors, is really admirable. The reports have commended France for its magnificent roads and other ground infrastructure as well as its cultural sites that add to the World Heritage. These were placed at the fourth rank. In the year 2012, $103.4 billion was generated from the tourism industry of France in absolute terms. This was equivalent to 3.7% of the country’s GDP. The total contribution of tourism towards the GDP is EUR 197.6 billion in 2012, which is 9.7% of the total GDP. In the year 2012 the tourism industry of France was seen to generate 1,189,000 jobs, which was 4.4% of the total employment. On the other hand the total contribution of the tourism industry towards employment generation was 2,924,500 jobs for the year 2012 and signified as 10.9% of the total employment. Thus tourism does a significant contribution towards the employment of the individuals. France has been seen to generate EUR44.9 billion towards visitor export in the year 2012. In the year 2012 the industry has attracted an investment of EUR21.4 billion (The Authority on World Travel and Tourism, 2013). Though the investment towards this sector was high but still the government policies were as such that the industry lost its competitiveness when compared to previous year. As a consequence the industry can be seen to lose its business in the upcoming years. Moreover the lack of skilled labour will generate employment on one hand but will also result in loosing many. In the year 2011 the number of tourist visiting France was 81.4 million, which was higher than the figures of the previous year. Paris was the most visited city as compared to other tourist destination of the world. Every year this city has earned millions of Euros from the tourists coming in. The city’s tourism office reported that the hotels of Paris have recorded 15.68 million tourist arrivals in the year 2012. On the other hand the number of domestic French visit has been seen to decline to 13 million nights, which has been compensated by the foreigner who stayed 23.9 million nights (The Local, 2013a). Thus this shows that though the on one hand the number of tourists coming from outside has increased but at the same time the number of domestic tourists have reduced significantly. Government policies affecting domestic Tourism Many of the initiatives taken by the government of France have created positive effects in enhancing the business of the tourism industry but some of the initiatives have created negative impact too. France has a tradition of long summer holidays that has been suggested to be cut to six weeks by the ministry. This has made the tourism industry of the country to hit adversely. This decision has been regarded to be a policy against the economic interest of the country. The president of Protourisme, Didier Arina claimed that French people are culturally and socially attached to the tradition of long summers. This tradition has been maintained over a long time by the French people and announcement of short holidays have created a mini revolution in the country. The long summer holidays make the French people to plan for visits to other places, but such a cutting down of the summer holidays have made the tourists to cancel their plans. Some of the local newspaper in France has been seen to post pictures of deserted Deauville beach. This clearly shows how the tourism industry has been affected by the decision of the government (The Local, 2013b). Weather conditions affecting Tourism Winter months are also not easy for the tourist industry. Due to snowfall many of the trains were seen to get cancelled, speed restrictions were imposed on cross channel lines, which indicated that the visitors travelling between UK and France may get delayed. The passengers were compelled to cancel their trains and book their seats in the trains running later. Alerts are also raised due to the risk of ice and snow. Civil aviation also got affected. The authorities of the French government asked many of the airlines operating in the two airports of Paris, Orly and Charles de Gaulle to cut down the schedule of the flights by 40%. The passengers were requested to confirm about their flight’s status before starting their journey. This adverse weather condition has almost paralysed the transportation system of France. It can be concluded apart from the adverse weather condition which has been seen to affect the tourism industry in the winter season, the decision of the government has further spoiled the business in the summer seasons when the situation are seen to be in favour of the industry. This may be one of the viable reasons due to which the arrival of the domestic tourists is seen to diminish (The Local, 2013c). Tourism affected by illegal usage of political status Moreover some other incidents like the conviction against illegal usage of status as a government official by Eric Vannier, the mayor of Mont St Michel and proprietor of Mere Poulard group for the interest of his own businesses has also further created an awful reputation. He has been accused of changing the route of the shuttle buses that were running to the rocky island and “Gothic-style Benedictine abbey” so that the tourists may depart from the area where his hotels and restaurant were located. The tourists were compelled to walk 900 meter staring from the main parking area to the departure point on the island. This created a hue and cry among the tourists since they were not satisfied with system and the number of visitors visiting the place was seen to reduce after the system got introduced. They complained of walking for one kilometre to catch the bus. Thus incidents have further mutilated the image of the tourism industry of France (The Local, 2013d). The Government must take immediate action in order to stop this type of damage. They should implement policies that not only benefit the foreign tourists but also the domestic one. While framing any policies the government should strictly consider the economic interest of the country apart from the public interest. Lowering of summer holidays should be again considered by the government. Apart from this the government should also ensure that the organizations like hotels, restaurants and transportation services should recruit quality and skilled people who are directly involved in service delivery to the tourists. The travel agents should also be licence holder and the government authorities should deeply scrutinize their credentials. Reference List Blanke, J. and Chiesa, T., 2013. The Travel and Tourism Competitive Report 2013. World Economic Forum [pdf] Available at < http://www3.weforum.org/docs/WEF_TT_Competitiveness_Report_2013.pdf> [Accessed 16 June 2013]. Euromonitor International, 2013. Travel and Tourism in France [online] Available at < http://www.euromonitor.com/travel-and-tourism-in-france/report> [Accessed 16 June 2013]. France.fr, n.d. Tourism, a key sector in the French economy [online] Available at [accessed 16 June 2013]. Nanayakkara, T., n.d. Role of Intellectual Property in Enhancing the Competitiveness of the Tourism Industry. World Intellectual Property Organization [pdf] Available at [Accessed 16 June 2013]. The Authority on World Travel and Tourism, 2013. Travel & Tourism Economic Impact 2013 France [pdf] Available at < http://www.wttc.org/site_media/uploads/downloads/france2013.pdf> [Accessed 16 June 2013]. The Local, 2013a. France's tourism industry loses competitive edge [online] Available at < http://www.thelocal.fr/20130307/frances-tourism-industry-loses-competitive-edge> [Accessed 16 June 2013]. The Local, 2013b. Breaking with tradition: French summer holidays [online] Available at [Accessed 16 June 2013]. The Local, 2013c. Eurostar trains cancelled as cold snap bites [online] Available at < http://www.thelocal.fr/20130121/eurostar-trains-cancelled-as-cold-snap-bites> [Accessed 16 June 2013]. The Local, 2013d. Mont-St-Michel mayor fined over bus route [online] Available at < http://www.thelocal.fr/20130227/mont-st-michel-mayor-fined-30000-over-bus-route> [Accessed 16 June 2013]. Read More