One of the main highlights of early July has indeed been the Tour de France (TDF2014). Launched in England, despite a lot of people being unclear as to why it was not France, the spectacular event attracted up to 5 million spectators. It seems that the French trademark insists on expanding abroad! Remember the so-called ‘Paris-Dakar’, which now takes place in South America? It is indeed quite far from its origins! Nonetheless the British economy has been known to take advantage of hosting a few stages of the TDF2014.
From Leeds to London, this Tour has attracted many people, and of courses, these spectators need a place to sleep, eat and to drink. Thus, the British catering industry has benefited greatly from the TDF2014. For instance, in Holmfirth, Old Bridge Hotel’s takings have increased by 50% for this weekend. So, not only is this event fantastic for us sports enthusiasts to watch, but it’s great for the British economy too.
However, imagine for a second that the State could diminish this attractiveness in order to boost its income. Since the 2008 crisis, all the European States are struggling to uphold an efficient economy and they all seem to have different policies. This week the French government has increased hotel tax by 500%. This means that tax will increase from £1.20 to £6.40; not to even mention the £2 tax implemented in the ‘Ile de France’ (the region surrounding Paris). This tax should finance Parisian public transport. Their view is that as the 40 million visitors in Paris are using public transport, tourism should contribute to improving theses transports’ competitiveness. On the other hand, the British government plans to decrease tourism tax by 75% in hopes that it boosts the economy. The future VAT value will be 5 per cent (instead of 20). This will help to create more than 100,000 jobs over ten years. Moreover, it attract even more tourism to the UK.
The catering industry is also seen as a double-edged sword. You can use it to attract tourists in your country and to boost your economy, or you can use it to weaken your position. In conclusion it’s right to host the French Tour de France, but not necessarily to follow France’s tax policy.