The recent terrorist attacks in Paris will have major financial implications, as the city is predicted to experience a $2.1 billion economic decline in the aftermath of the incident. The estimate was provided by the General Directorate of the French Treasury, and the losses will primarily come from a reduction in tourism and a decrease in consumption. Certain sectors of the French economy have already slowed down.
In the ten days following the attacks, hotel occupancy in Paris has declined by 24%. Flight reservations are 13% lower than they were last year. Most French malls and department stores have had their total number of customers fall by anywhere between 30% and 50%. And museums have had up to 50% less visitors.
Luckily, more than two-thirds of all French companies have stated that they have not experienced economic downturns and city wide downturns started to reverse over the course of last week. French officials have stated that hotel reservations and the number of fliers have been returning to more typical levels. Still, the economic consequences of the attacks can still be felt.
Organizations in the cultural sector are still concerned. Many French citizens are reluctant to attend large meetings or gatherings in fear of a second attack. Indeed, the ticket sales for concert shows last week fell by about 80% when compared to last year. Many shows at performance halls were outright cancelled following the attacks. Making matters worse is that many concert halls have been forced to invest in additional security measures. So while revenues are down, expenses are up.
French President François Hollande has said that the country will spend hundreds of millions of euros on security measures across the country. Luckily, about 8,500 new jobs will be created in the process. President Hollande has stated that maintaining proper security is more important than economic stability for the time being.
And while many businesses are down, some companies have actually experienced increased earnings in the wake of the attacks. French flag makers have had a boom in business because of people wanting to express support for the country during this dark time. President Hollande has called on his citizens to hang the French flag on the outside of their windows as a sign of support.