Credit crunch taking toll on smaller hotels
As banks in France cut back on lending, two-thirds of hotels in need of renovation work are unable to raise funds.
1 December 2008
STRASBOURG – Holidaymakers in France could have less choice over where they stay next year as the credit crunch threatens some smaller hotels with closure, a senior tourism industry official said Saturday.
Georges Klaerr-Blanchard, director for the Alsace region tourist board, said two-thirds of French hotels are in need of crucial renovation work, but cannot raise funding after banks cut back on lending.
"At the moment, some hotel owners are being refused credit even when their balance sheets are strong and they have a very high number of bookings," Klaerr-Blanchard said.
"The difficulty in securing credit today means small and medium hotels risk being caught between a rock and a hard place."
Those in rural areas would be particularly worse off, and could end up being taken over by a large chain just to keep going, he said.
"Everyone in the hotel and catering industries is expecting a drop in earnings for 2009," he added.
[AFP / Expatica]