With a rise in RevPAR from 0.5% to 0.7% in June, hoteliers along the French coast have seen a better beginning to the summer season than last year.
• Though the number of visitors has remained largely unchanged along the Atlantic coast over the years, recent figures indicate an improvement in the situation along the Mediterranean coast.
• The high temperatures in the beginning of the month do not seem to have had an affect on reservations with regards to customers that seem increasingly in favour of selecting destinations at the last minute.
According to preliminary estimations, the 2005 summer season may turn out to be better than last year for hotels along the French coast, with a rise in RevPAR between 3% and 4.5% depending on the coast concerned.
Another observation of the early figures: the last few months may seem to mark a rebalancing between the Atlantic / English Coasts and the Mediterranean coast - particularly the Southeast of France.
Indeed, the driving force for growth in hotels along the Atlantic coast essentially resides in the attractiveness in average daily rates, both in June and July, while occupancy rates considerably weakened over the past three months. On the other hand, June and July were more favourable for hoteliers along the Mediterranean coast with two successive rises in occupancy rates.
Though the activity of hoteliers along the Atlantic coast last year seems to have been sustained from an inflow of customers looking for cooler temperatures after the 2003 heat wave, the Mediterranean coast seems to have suffered from fears of extreme heat, notably along the French Riviera due to competition from new destinations in Europe, Northern Africa, and moreover in the Middle East. Customers from the Persian Gulf are increasingly turning towards these 'domestic' destinations and the luxury hotels along the Mediterranean coast.
The effort made on rates is accompanied by signs of recovery. Results from the month of May have already been satisfactory in Cannes. Each year, the festival period is accompanied by a sharp rise in rates. In Nice as well, hotel indicators for the month of May were positively oriented, even though the beginning of the year was more delicate.
Right from the beginning, the state of reservations at the beginning of this season shows that the British and the Russians are more present this year on the French Riviera. At the same time, we note that the Japanese market is picking up once more, which is a good sign for the upcoming tourism season. A minor note however must nonetheless be made with regards to German customers whose purchasing power has been eroded by economic difficulties encountered in recent years. These latter seem to increasingly be choosing competing and less expensive destinations in Europe, and more recently, in countries along the Adriatic coast.
The beginning of the season is truly encouraging, though one must still remain prudent. Though the high temperatures in the beginning of the month do not seem to have had an effect on reservations, customers are increasingly choosing their destination at the last minute. Reduced visibility of the market currently implies a near-instant level of reactivity in adaptation.
Monthly Results and Forecasts for French Coastal Hotel Chains in May, June, and July 2005
Average daily rates and RevPAR expressed in euros incl. of tax
(Source: MKG Consulting July 2005)
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