Inbound tourism to France fell by 7% in the nine months following the November 13 terrorist attacks in Paris.
Hotel occupancy in the French capital has fallen 9 percentage points to 70%.
Turnover at luxury hotels such as the George V and the Plaza Athénée has dropped by 35% in Paris and by 22% in Nice, the Union of the Hotel Industry Trades (UMIH) reported.
The union’s chairman Roland Héguy told Le Monde: “Paris is suffering enormously. There will certainly be lay-offs.”
A cut of 5% in hotel accommodation and restaurant charges has done nothing to bring back tourists who are deterred by the continuing state of emergency.
Americans, Chinese and travellers from the Middle East have stayed away the most. Chinese visits to France are expected to fall by 25% in 2016.
In addition to terrorist fears, tourists have been deterred by a rise in muggings and thefts in Paris. Visits from the Middle East have dropped by 40%, with many wealthy people opting for London instead where they can benefit from the collapse of sterling in the wake of the Brexit vote, The Times reported.
Héguy urged the French government to act with an international marketing campaigns and tax measures to soften the blow to the industry.
“This crisis did not begin with the terrorist attacks,” he said. “They accelerated a falling out of love with France as a destination.”
The industry suffered from poor infrastructure, too-high prices and an unfriendly welcome, he said.
President Hollande’s government blames the slide in tourism, which accounts for 7 per cent of GDP, for a rise in unemployment nationwide in August.
Labour minister Myriam El-Khomri said the economy had been punctured in “areas linked to tourism, notably hotels, restaurants and the leisure industry”.