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Two years after the pandemic, tourism faces the “wall” of state-guaranteed loans

So there it is, this wall. This “PGE wall” under which accommodation providers and restaurateurs fear being buried, and which they have been describing as the Chinese wall for six months in the hope of seeing it moved, brick by brick, by the government. The latter, working on other projects, has already warned: nothing will happen. And the state-guaranteed loans taken out at the start of the Covid-19 crisis are beginning to be repaid by 123,000 tourism companies. Some, with limited reserves, are afraid of losing their investment capacity, and therefore of seeing their attractiveness deteriorated in the medium term.

Given the unexpected duration of the pandemic, the government had already granted a one-year deferral to start repaying these five-year loans. It is therefore in the spring of 2022, and not 2021, that the repayment schedules begin, but they are now spread over four years: a tight duration for sums which can reach 25% of annual turnover.

“If we force hotel-restaurants to repay so quickly instead of benefiting from the recovery to continue to maintain and modernize the tools, this will engulf the good management of the crisis by the government”, worries Karim Soleilhavoup, managing director of the independent hotel network Logis Hôtels. The family owner will make it a point of honor to repay his debts, but this will come at a price: the aging of the hotel stock and the remuneration of employees.

According to the Treasury Department, 38% of accommodation and catering companies have contracted a PGE, which makes it by far the leading sector concerned. Tourism represented 12 billion euros in assets, according to the ministry, or about 9% of the mass of PGEs. But, for several months, members of the National Group of Independents (GNI) or the National Federation of Passenger Transport (FNTV) have been showering the State with worried messages.

“That those who are able to repay can do so”

The most affected are those whose business has recently restarted and who have still not resumed cruising speed: tour operators, coach operators, holiday centers, Parisian hoteliers and event specialists. These small companies constitute the bulk of the 25,000 to 30,000 companies in difficulty to immediately repay their PGE, confirmed in January the French Banking Federation.

All are asking the government to postpone the first repayments and to spread the maturities over ten years, until 2030, even if it means going to a showdown with Brussels and the banks. Alternative proposed by the GNI: a “new Covid loan” spread over a maximum of fifteen years could allow reimbursement… of the first EMP. A few months ago, others were hoping for a conversion of PGEs into equity loans, quasi-equity funds to reduce corporate debt.

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