French Hotel Industry Performance - November 2015
Paris and the Ile de France region were dramatically hit by two terrorist attacks in 2015. The impact on hotel activity is evidently substantial and hotels in this area will finish the year on a lower note. November saw a fall in occupancy in Parisian hotels of all categories compared to the same period 2014. Although the impact appears to have been less strong in regional France, intermediary categories nonetheless recorded lower performances in November 2015, particularly on the Côte d'Azur. Our fears were unfortunately confirmed as Paris suffered a significant drop in occupancy further to November's attacks (a fall of 10,9% to 14,6% depending on the category). Stable average rates limited the drop in RevPAR, although rooms revenue was still affected. Paradoxically, Luxury hotels managed to stabilise or grow RevPAR (+3,3%), although this was an illusion, since November 2014 was not a particularly good month (aggravating the findings for other categories). The rest of the region fared better, and inferior categories (Budget and Super Budget) in certain departments even managed to increase RevPAR. The rest of France suffered to a lesser extent. The Upscale and Midscale categories were the only ones to record fairly significant drops in RevPAR in November 2015: -9,8% for regional Upscale hotels given the combined fall in occupancy and average rates and -9,5% for Midscale hotels on the Côte d'Azur given the significant drop in occupancy. All other categories recorded stable or better performances, confirming the more encouraging pattern recorded over the past few months. Even though we should remain cautious when comparing results against November 2014, year-end performances show a marked increase, with December not likely to reverse the trend. For Super-budget hotels, the months go on and resemble each other. Maintaining a +1,5% increase in average rates since the start of the year has not been sufficient to offset declining occupancy: RevPAR is down by almost 1% and appears to have stabilised at this level. We are already well into the month of December, and the picture is not likely to change much. Yearend results will in all probability be encouraging for regional France, particularly for the Côte d'Azur. Conversely, the significant drop recorded since the start of the year in Paris will likely be aggravated by an uncertain month of December, as security fears continue to prevail. 2015 looks, then, to deliver mixed results.
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Aude de Mauvaisin
Senior Consultant | Deloitte TH&L
33 (0) 1 58 37 90 37
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