INFLATION IN FRANCE

Bay of Plenty Beacon, Volume 10, Issue 18, 30 August 1946, Page 5

INFLATION IN FRANCE

HOTEL RATES BOOSTED

French inflation at last has hit the point of greatest impact on tourists and visitors —a sharp increase in hotel rates.

Tourists bound for France will have to readjust their prospective budgets as a result. Hotels have been charging roughly double their pre-war rate. They now are authorised to increase this to triple the pre-war rate, that is 50 per cent, higher than the rates existing up till now. Some are not taking full advantage of this fact for the moment, for they do not wish their rates to go any higher than is necessary due to the effect on their clientele. That these same hotels later will make another increase must be expected, since costs still are increasing • in France.

Actually the increases allowed are very small considering what has happened to hotel maintenance costs. Labour in France has had its pay increased at least five times the prewar figure and other costs have gone up as high as 10 times. Yet hotels have had to operate at only double the pre-war rate. In view of this fact, triple and prewar rate still is conservative.

Top-flight hotels that charge 700 francs a day for a twin-bed bedroom and bath have increased this to 1000 francs. In dollars this means the rate has increased from roughly 6 dollars to 8.50 dollars a day. The whole situation is typical of the inflationary spiral in which the race moves so fast that no one is really taken care of. French hotel labour getting five times the pre-war rate cannot buy much in 10 times the pre-war market. Management facing impossible repair, linen replacement and other such costs, plus increased labour at 5 to 10 times the pre-war cost gets little genuine recovery from only a triple rate increase. Yet any higher increase would hit clientele so hard it probably would cause chaos in business.

Rents are high primarily because tenants have been subletting and taking the increase while landlords have had to go along at pre-war rates. Many people say the landlords have practically been expropriated, as their present income bears no relation to the investment. As a result, people have to do their own repairs, buy their own coal for heating, pool together to pay electric bills, heavily tip the concierge, and in general run the houses they rent.

With high prices current in France the temptation to augment a low income by subletting apartments has been too great to avoid. While tenants can not charge increased rent over what they pay. the landlords, there is no limit on a furnished flat as against an empty one. ■ So a few sticks are thrown in, the place is called furnished, and a very high price is charged for “buying the furniture” or “buying the key.” These premiums are high, running from as low as 2000 dollars up to 10,000 dollars just to get in a place, and payable at once. Thus the hotel dweller looking for an apartment as an escape from his newly increased hotel rent has little offered him that he can swing.