Market Report France

February a Mixed Bag for the French Hotel Industry

Deloitte French Hotel Industry Performance February 2014

Deloitte The month of February saw mixed results. At the national level, occupancy and average rates dropped slightly, without, however, entirely collapsing. The Luxury segment was the only one to stay on course, posting positive results. Paris - usually spared from downturns - did not manage to escape during February. Conversely, other destinations benefited from bright spells, giving rise to contrasted results.

Traditionally acclaimed, and in spite of the number of major events held (Agricultural Trade Show, etc.), the Capital saw a stark decrease in trading in February. Occupancy was down in all categories: -0,3% to -7.7%. The same was true of average rates, with the exception of the Luxury segment whose rates grew by 4.7%. 

The results were somewhat mixed on the Côte d‟Azur: Luxury and Midscale performances were up: ARR grew by up to +13% for the Luxury segment, for instance. In contrast, Upscale and Super-budget hotels posted a decline, reaching a -13.6% drop in RevPAR for Upscale hotels. Cannes managed to stay on course, with satisfactory results thanks to the city hosting MIDEM and the International Games Festival in February: in the Upscale, Midscale and Luxury categories, occupancy grew by around 21% and ARR by 8%. 

Concerning other main destinations, Strasburg experienced a bright spell (as in January), notably in the Midscale and Budget segments (RevPAR grow by 29.4% ad 26.3%, respectively). The holding of two parliamentary sessions, instead of the usual one per month, as well as the “Strasburg mon amour” marketing campaign, strongly contributed to these results, attracting increasing numbers of visitors in a traditionally calm month. 

Furthermore, the organisation of tradeshows such as the CFIA and the Salon Bio in Rennes, or Vinisud and the Salon Vintage in Montpellier, enabled these two cities to pull hotel performances up and post encouraging increases over the first two months of the year. To illustrate, occupancy in Rennes‟ Midscale hotels grew by 19.7%. RevPAR followed this trend, rising by 34%. In Montpellier, the Luxury and Upscale categories posted the best results, with an occupancy rate that grew by 34.6%, leading to a 42.6% rise in RevPAR. 

Lastly, even if indicators vary from city to city, February‟s results give some hope for improvement at the end of the first trimester 2014, further to a long period of stagnation. This could, however, be more difficult for smaller cities.

Table - French Hotel Industry Performance February 2014

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