French Hotel Industry Performances | July 2010

In July, hotels in Paris, regional France and the Côte d’Azur demonstrated similar RevPAR tendencies: an increase of over 10% for 4 star hotels, a more modest progression for 3 star hotels and a stagnation for 2 star hotels.

More luxurious establishments benefited from the return of overseas guests, whilst budget, 1 and 2 star hotels were more heavily influenced by the behavior of the domestic market – increasingly watchful of accommodation expenses, with alternative lodging solutions often being favored.

Although RevPAR followed the same trend in the three major French hotel markets, variations in the two key indicators (OR and ARR) differed. Unlike the regional market, growth in the Paris and Côte d’Azur upscale markets was primarily down to an increase in average rates.

This can be explained by high occupancy levels in 2009, as well as the lower ability to lever occupancy. It can also be explained by the fact that these two markets have a higher number of superior 4 star hotels. Since these hotels have a larger proportion of suites, average rates play a greater role in RevPAR changes. The most luxurious hotels in Paris recorded ARR growth of 11% and the Côte d’Azur over 16%.

Aude de Mauvaisin
Senior Consultant | Deloitte TH&L
33 (0) 1 58 37 90 37
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