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Paris hotels angry over tourist tax hike ahead of Olympics

Paris hoteliers were up in arms on Tuesday over a government plan to triple the tax paid by visitors on nights at hotels next year when the capital hosts the Olympics.

Published: 19 December 2023 17:29 CET

Paris hotels angry over tourist tax hike ahead of Olympics

A hotel in Paris in August 2020 (Photo by ALAIN JOCARD / AFP)

The tourist tax in Paris now varies from €0.25 a night for the most basic accommodation to €5 a night for luxurious establishments.

The government is to triple that fee as part of its 2024 budget, which it plans to ram through parliament without a vote before Christmas.

READ MORE: What is France’s tourist tax and where is it charged?

“It’s another blow for the competitiveness of our sector as well as France’s image at a time when all attention is on the Paris 2024 Olympics,” the UMIH hotel and restaurant union and GNC group of hotel chains said in a statement.

The government has said the 200-percent increase in the tourist tax will help fund public transport.

The syndicates claimed it would “amount to €423 million in tax collected a year — far more than the €200 million” the government and the regional transport authority have said they needed.

Catherine Querard, the president of GHR, another union representing the hospitality and catering sector, added: “The authorities fear a hike in hotel prices, but they’re sending the tax rate through the roof. Then they’ll come and blame us.”

READ MORE: Hotels, tickets and scams: What to know about visiting Paris for the 2024 Olympics

Hotels have already increased their rates for a night during the Olympics from July 26 to August 11.

President Emmanuel Macron’s government is to invoke article 49.3 of the French constitution to pass its 2024 budget without a vote.

It does not have a majority following 2022 elections and has several times used the controversial mechanism, including to enact its highly disputed pension reform earlier this year despite months of protest.

The controversy comes after regional authorities announced a sharp rise in public transport tickets for the Games, sparking anger.

READ MORE: Paris to hike Metro prices during Olympic Games

The regional transport authority is to near-double metro fares for single tickets and 10-ticket passes during the Olympics.

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What is considered a good salary in Paris?

Centrist Renaissance candidate Sylvain Maillard, running for re-election in France’s snap parliamentary elections, was trying to highlight the high cost of living in the capital in a debate on RMC Radio

“You have extremely expensive rents [in Paris], between €1,500 and €1,700, and then there are all the charges and taxes to pay,” he said.

But what most people seized on was his comment that anyone earning €4,000 a month after tax would not be considered rich in Paris – he predictably was accused of being out of touch with French people’s lives.

There’s no doubt that €4,000 a month is good salary that most people would be happy with – but how much do you need to earn to be considered ‘rich’ in Paris?

National averages

Earlier this year, the independent Observatoire des Inégalités calculated poverty and wealth levels in France.

READ ALSO How much money do you need to be considered rich in France?

According to its calculations, to be considered ‘rich’ in France, a single person with no dependants needs to earn more than €3,860 per month, after taxes and social charges. Around eight percent of single workers have this sum deposited into their bank balance every month, it said.

A total of 23 percent of workers take home €3,000 or more every month, while the top 10 percent clear €4,170.

To be in the top one percent of earners in France in 2024, one person must bring in at least €10,000 per month. After taxes and social charges.

The median income – the median is the ‘middle value’ of a range of totals – of tax households in mainland France is €1,923 per month after taxes and social charges, according to INSEE 2021 data, which means that a ‘rich’ person earns about twice as much as a person on the median income, according to the Observatoire.

Paris situation

About 75 percent of people living in Paris earn less than €4,458 per month, according to Insee data – so according to those calculations, 25 percent of Parisians earn the equivalent of the top 10 percent in France.

But that city-wide average still hides a wide degree of variation. In the sixth arrondissement, the median income is €4,358 per month, after tax. In the seventh, it’s €4,255. Further out, those bringing home €4,600 a month in the 19th and 20th arrondissements are among the top 10 percent in wealth terms.

But still, the median income in Paris is €2,639, significantly higher than the €1,923 France-wide median.

That would mean – using the Observatoire des Inégalités’ starting point for wealth – that a Paris resident, living on their own, would have to bring home €5,278 per month to be considered ‘rich’.

France is a heavily centralised country, with many of the highest-paying industries concentrated within the capital, meaning there is much more opportunity to secure a high-wage job if you live in Paris.

Cost of living

Even these figures should all be taken with a pinch of salt because of the relatively high cost of living in the capital, compared to elsewhere in France. Paris is objectively an expensive place to call home.

In 2023, France Stratégie published a report on the disposable income of French households, after housing, food and transport costs were deducted. It found that, on average, people living in the Paris region had more left to spend, due to higher incomes and despite the fact that housing costs more.

It’s the income paradox in action. A person with a take-home salary of €4,000 per month has more money to spend if they live and work outside Paris. But they’re much more likely to earn that much if they live and work in Paris, where it’s not as valuable.

Someone who earns a ‘rich-level’ salary in Paris might not appear rich – because they live in an expensive area, and a surrounded by very wealthy people in property that’s out of reach all-but the fattest of wallets. But they’re still earning more than twice the median income in France.

And that’s what Sylvain Maillard was getting at, clumsily as he may have expressed it.

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