French Hotel Industry Performance - January 2015
Business in Paris impacted
Parisian hotels were hit by the dramatic events at Charlie Hebdo and Porte de Vincennes. Demand dropped, particularly in hotel categories that traditionally welcome a high proportion of overseas guests. However, the decline remained limited and could have been more significant had the destination not been able to rapidly reassure foreign visitors.
Parisian hotels were hit by the dramatic events at Charlie Hebdo and Porte de Vincennes. Demand dropped, particularly in hotel categories that traditionally welcome a high proportion of overseas guests. However, the decline remained limited and could have been more significant had the destination not been able to rapidly reassure foreign visitors. Further afield, the French hotel industry had a good month, driven by several key destinations with strong MICE business.
Parisian hotels were affected by the events at Charlie Hebdo and Porte de Vincennes. Occupancy dropped in January – down 3 to 6% for most categories. The impact was particularly visible in the more prestigious categories – Boutique and Luxury hotels – where the mostly-foreign clientele preferred to postpone travel. Philippe Gauguier, Associate at In Extenso Tourism, Culture & Hospitality, highlights that we could, however, have expected an even steeper decline in the light of the dramatic events. The destination was able to quickly bounce back afterwards and reassure foreign visitors. Furthermore, seminar and congress visitors were still in attendance, as most large-scale business events were not cancelled. Moreover, Upscale hotels were the only ones to record higher RevPAR in Paris.
The notable drop in demand in Paris tended to eclipse the rest of the market. However, results are interesting and even encouraging in regional France. Budget to Upscale categories all recorded a strong increase in RevPAR. Occupancy and average rates progressed, signalling strong demand. This was even the case for the Côte d'Azur, even if RevPAR growth was driven by higher occupancy. The only exception was the Luxury segment that recorded a drop in business – both in regional France and on the Côte d'Azur. Overseas visitors – influenced by the events in Paris – most likely wondered whether similar incidents would happen elsewhere in France.
Regional trends are, therefore, encouraging. However, Olivier Petit, Associate at In Extenso Tourism, Culture & Hospitality, observes that market growth was primarily driven by several zones, and notably by certain cities. Lille, Lyon and Montpellier thus recorded a significant improvement in activity. These destinations offered a rich events agenda in January, which favoured hotel activity – often the case in odd-numbered years.