Rescue Plan for the restoration and tourism : it is necessary to go further

Le Figaro the restaurant industry, hospitality, leisure and tourism activities is the sixth largest employer in France and an annual turnover of 70 billion eur

Rescue Plan for the restoration and tourism : it is necessary to go further
Le Figaro

the restaurant industry, hospitality, leisure and tourism activities is the sixth largest employer in France and an annual turnover of 70 billion euros, including 30 billion only for the traditional restoration, follow-up of 17 billion for the hospitality industry. The restoration represents 60% of the tourism activity and account 960.000 employees, of which be 740,000 employees. Workforce with an additional 400,000 seasonal workers who find a job each year, of which three-quarters during the summer season.

read also : The race of tourism professionals in order to save their summer season

the objective announced by the government is a bailout plan target of 18 billion euros :

€ 2.2 billion in deferrals, and exemptions from charges

If the sector receives reports of expenses on social security contributions, the government has announced that SMES and VSES (cafes, small hotels and restaurants) would benefit from exemptions, complete these social security contributions on the four months of closure. The effort, for the public finances, is estimated at approximately € 2.2 billion. For the ETI, and large companies in the sector, the loads will be spread out until the end of the year, but specific arrangements will be determined on a case-by-case basis, including for debt cancellation.

7 billion from the solidarity fund are dedicated to the restoration and tourism

For tourism and restoration, access to support is extended up to the end of the year and broadened to include companies employing up to 20 workers for 2 million euros of turnover (against a ceiling of 10 employees for 1 million of turnover for the other sectors).

us $ 1.5 billion to aid regional

The maximum subsidies that can be paid by the regions is, also, gone up from 5000 to 10,000 euros in the tourism and catering.

5 billion euros from the support by the State of the partial unemployment

Last point, the use of partial unemployment in its original form, with support at 100% by the State (up to 4.5 smics) is being extended until September, while the share of the State decreased in the other sectors since the 1st of June.

It must be said that the tourism and the restoration have been particularly affected. According to the data of the Dares, in march and April, 71% of employees in the sector "food & accommodation" (1.2 million employees) have been put in short-time work by their employers : it is the highest rate in the sector compared to the number of employees (in the second position, we find the construction sector with 56%).

If since the 15th of June, the hotels and restaurants may re-open throughout the country (with the exception of Mayotte and French Guyana), a limitation in tables of 10 people still exists, as well as compliance with a health protocol strictly (port mask for the staff, in particular, leaching of the tables between each customer, etc). The Union trades and industries of hospitality believes that these sanitary protocols are yet reduce to 60 % the capacity of the institutions and call for alleviating them.

The government's plan insufficient

But it is obvious that the government's plan is not enough to save the industry, which will also suffer from a lack of foreign tourists this summer. The assessments on the bankruptcy potential range between 20 and 30%.

A solution really ambitious would be to test the reduced VAT rate of 5.5% until December throughout the area.

The most effective way to give leeway to the professionals, would be, at a minimum, to pass all sales of products to take on a reduced rate at 5.5% until the end of the year. Today, with the exception of certain categories of sales take-out sales (sales of bread, pastries or the caterers), pizza, sushi or a dish delivered remain taxed at a rate of 10%. However, it is well on the takeaway that restaurateurs have to bet to generate a little revenue for the containment.

read more : Germany to drop the VAT to sustain consumption

The best would be to experiment with a VAT rate of 5.5% on all the sector of the restoration : we can estimate this effort, on the part of the State, around 1.52 billion euros, but this would have the merit of providing a breath of fresh air in a sector that is heading toward many of the bankruptcy, with potentially, the key, between 140,000 and the 190,000 job cuts. In effect, the goal would not be to obtain a lower price for the customer on the products consumed, but to reconstruct the margins of restaurateurs. Therefore, one would require, obviously, the DGCCRF to refrain from control the impact of the decrease of VAT on the prices charged to end customers...

Le Figaro

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Date Of Update: 17 June 2020, 06:47

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