Best known as the glamorous backdrop to the world’s biggest film festival, Cannes has become one of France’s wealthiest cities thanks to the yearlong parade of markets and conferences it hosts. But with many of these events going entirely digital or having been called off altogether due to the coronavirus pandemic, the city’s restaurant and hospitality sectors are enduring heavy losses.

“This pandemic is having a catastrophic impact on the local community,” Cannes Mayor David Lisnard tells Variety. Lisnard, elected in 2014, predicts that business done by the Palais des Festivals convention center and the local conferences — including TV markets MipTV and Mipcom and other industry gatherings focused on insurance, music and law — represents around 85% of Cannes’ annual income.

The pandemic’s toll on the city is expected to amount to €800 million ($941 million), Lisnard says. “The repercussions are huge and far-reaching on a whole chain of professionals,” he explains, highlighting the severe impact on a vast network of independent contractors whose livelihoods rely on conference activity. “[They] are left in dire straits and aren’t even eligible for unemployment subsidies; they are invisible. I’m talking about drivers, caterers and the people who help build stands.”

As many as 52 professional events are organized at the Palais des Festivals annually. To date, five, including the Cannes Film Festival, MipTV and Mipcom, have been canceled and seven have been postponed until late 2020. The impact of the scuppered events, however, needn’t have been so dire, says Lisnard, who points to stringent rules on public gatherings and a lack of economic aid. “The government has completely underestimated the events sector, and doesn’t see the power and relevance of this industry, even though it brings €70 billion to France’s economy.” And he adds: “It’s easier to prevent the spread of a virus in a large conference under strict sanitary guidelines than in a supermarket.”

In Cannes, key venues for talent and events during the festival and other conferences, such as the Carlton, Martinez and Majestic hotels, have been hit hard by cancellations.

The Carlton and the Gray d’Albion hotel have closed indefinitely, while the Martinez is open only during weekends. The Radisson will soon close, and the Majestic could follow suit at the end of October. Some venues will likely reopen for a three-day event in late October, but there are few major events to stay open for.

“Everything [has been] falling apart since March. The damage for us is north of €200,000,” says Pascal Boulanger, a former TV journalist who owns the Athénée Hotel in the center of Cannes, around the corner from shopping haven Rue d’Antibes. “The downfall started when we found out that Mipim [the March real estate market] was postponed to June and then canceled.”

For Boulanger, it will take another year to get back to normal. Like many hotel owners, he gave guests who had paid a 50% deposit to book rooms the option of getting a full refund or applying their deposit to next year’s edition. He says half his regular film festival customers were willing to use their credit toward the 2021 event, but some are now getting cold feet.

“Our latest cancellation was this morning. We had to reimburse 60 nights to a customer who long hesitated and finally chose to get a refund, probably for accounting reasons,” says Boulanger, whose hotel has a seven-night minimum policy for the film festival, a five-night minimum for Mipim and a six-night minimum for the Cannes Lions advertising conference.

Approximately 75% of clients who had booked for Mipim decided to keep their bookings for next year’s conference, but even the 2021 edition could be delayed due to France’s cap on public gatherings, which is set at 5,000 people until the end of March, says Boulanger.

Even in a best-case scenario, if all of next year’s events are held, Boulanger expects to fill only half the rooms that had been booked in 2020. “We anticipate that we’ll be back to normal in 2022 — not until then.”

In pre-pandemic times, getting a table sans reservations at Italian eatery Da Laura during a busy market was laughable. But even one of the city’s busiest restaurants has hit a rough patch, with business down 40% in recent weeks.

“The few customers we have now are locals and a few European travelers. We’re going to keep the place open for lunch until November and then go into snooze mode until the restart of events,” Tarantino Ermindo, manager of the restaurant, tells Variety.

Some tensions have also been building between Cannes locals and Reed Midem, the French branch of London-based Reed Exhibitions, which is being blamed for canceling its many Cannes-based events. “Reed Midem is in a position of near monopoly in all the professional events they organize,” says one Cannes-based industry insider, who allows that the company could take its business elsewhere. “Ultimately, they could decide to move these events to Amsterdam or Barcelona,” the insider says.

Reed Midem, which has managed to pay its employees without resorting to government support during the pandemic, tells Variety that it doesn’t plan to go anywhere. “Our goal is to bring our events back to Cannes as soon as it is possible to do so,” organizers say.

Lisnard points out that Cannes has navigated adversity previously, referencing the terrorist attacks in Paris in 2015 and Nice in 2016 that prompted a state of emergency. “We know how to deal with these crises. When we were at risk of terrorist attacks, we set up a sprawling security protocol and envisioned scenarios to best protect market participants. And it worked,” says the mayor.

Indeed, the festival was placed under surveillance, with nearly 600 cameras installed, a network of vigilant neighbors mobilized and a dispatch of snipers at
the ready.

“We want to do the same as we cope with the pandemic,” says Lisnard, who maintains that he wants Cannes to become the European capital of hybrid events that mix online and in-person components. “We can ask everyone to bring a [COVID-19] test to events, take people’s temperatures as we’ve been doing since March, and many other things. We just need to reformat our events in various ways.”

Although Mipcom’s physical component was recently axed, October drama festival Canneseries will still be held in person as well as virtually. “It will be more French and European this year, and we look forward to welcoming guests in the city, while those who can’t attend will have access to many things online,” Lisnard says.

But for many, the rise of virtual dealmaking and hybrid events could mark the beginning of the end as more livelihoods are threatened for a sustained period.

“[As more] business is done virtually, it’s a disaster for Cannes’ business model, which is built around those conferences,” says Boulanger. “Cannes has always been oriented toward business tourism. It was our strength, and today, it’s our weak point.”