Market Report France

Poor June Performance for French Hotel Industry

June’s results were mostly negative, which the French hotel industry recording a decline in RevPAR. June is traditionally a strong month, without the numerous bank holidays that impact trading in May. Yet, occupation and average rates – with the odd exception – were down on last year’s results.

Deloitte June finished on a negative note, with the French hotel industry posting a decline in RevPAR. The reason? The seemingly never-ending difficult economic situation that is impacting the hotel industry, coupled with an even-numbered year with fewer MICE(*) activities: the latter illustrates how a destination’s events calendar has become highly strategic for many tourism actors.

June’s results were mostly negative, which the French hotel industry recording a decline in RevPAR. June is traditionally a strong month, without the numerous bank holidays that impact trading in May. Yet, occupation and average rates – with the odd exception – were down on last year’s results. 

Can the blame be again heaped on the gloomy economy? Yes, of course – the effects are still being felt. Business travellers are still limiting business trips and leisure travellers are still wary about spending money during a recession. 

However, this is not the only explanation. The drop in trading can also be explained by the year 2014 itself! Nothing mystical about this and it’s not worth studying the planets or consulting the prophecies of Nostradamus.. There are historically fewer MICE activities – and consequently overnights – in even-numbered years. Philippe Gauguier – Partner at In Extenso THR – insists on the fact that a large proportion of major trade shows – Batimat (Paris), Syrha (Lyon), SIMA (Paris), etc. – take place during odd-numbered years. The absence of such, and the hosting of smaller events in their place, has thus penalised trading in June. Inevitably, then, a comparison with the previous year yields a negative result. To illustrate, hotel trading in Paris was marked this year by the absence of the Paris Air Show in Bourget.

Similarly, Olivier Petit – Partner at In Extenso THR – emphasis how the absence or presence of a mediatised event can penalise or support hotel trading in a destination. Rouen, for example, saw a significant drop in trading compared to June 2013, when it hosted the Armada 2013 – the World Festival of sailing ships. Conversely, hoteliers in Nantes benefited from the success of the latest “Royal de Luxe” that took place in its streets.

(*) MICE : Meeting, Incentive, Congress, Event


Table - French Hotel Industry Performance June 2014

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