Once more, Parisian hotel markets show signs of their good health with double-digit growth rates. The 2 star category remains slightly behind but still post a satisfying 7.8% increase in RevPAR. In the rest of France, hotel markets are equally doing well; RevPAR progresses with rates of more than 4% for all categories.

In Paris, 3 and 4 star hotels’ room revenue growth is even higher than in September. While all categories have benefited from increasing rates, superior 4 star (+22.1%), boutique hotels (+20.1%) and standard 3 star properties (+20.8%) show above average performances. The 2 star category shows more modest growth rates in the region of 7.8%.

Parisian hotel markets have reaped the benefits of several major events: Mondiale de l’Automobile, Fashion week, FIAC (Modern Art Fair), Prix de l’Arc de Triomphe, etc. These events have boosted occupancy rates in the capital while at the same time pushing average rates further upwards, in a generally positive economic environment.

The good performances of the upscale segments are fuelled by an increase in occupancy rates (+8.5%) on the one hand and improved average rates (+8.8%) on the other. Hotels in the midscale category already posted fairly high occupancy rates in October last year; hotelkeepers have mainly used rate increases to improve overall room revenue.

All together, Parisian hotel markets (both upscale and midscale) give way to true optimism. Indeed, cumulated figures (YTD) at end of October show occupancy rates of more than 75% (!) for 4 star hotels and nearly 80% for midscale hotels. Paris currently benefits from the rapid development of new feeder markets BRIC (Brazil, Russia, India and China) bringing new clients with high purchasing power.

At the same time, mid- and upscale hotel supply in Paris is growing. The Fouquets Barrière Hotels on the Champs Elysées has opened its doors beginning of November. Furthermore, several “design” hotel project are under development in other neighbourhoods of the city. We can mention amongst others the Porte de la Villette project with 420 rooms and Philippe Starck’s Mama Shelter project in the 20th district; both are expected to open in 2008.

In the other regions of France, we observe the same trend as in Paris with RevPAR growth linked to increasing demand (+4.7%) for upscale hotels and thanks to higher average rates (+3.4%) for the midscale hotels.

The progression in RevPAR is similar from one category to the other with an average increase just over +4%. Nonetheless, the figures presented are to be interpreted with caution because great disparities exist between various cities in France.

Contrary to Paris, cumulated performances in the rest of France are less bright. Even though RevPAR of upscale hotels progresses more rapidly in 2006 than during the period 2004-2005, the growth of midscale hotels remains identical to last year’s figures.

Willemijn Geels
Consultant
+ 33 (0) 1.72.29.61.97
BDO MG Hôtels & Tourisme

Related