French Hotel Market Performance February 2005 | BDO Reports
Activity of Parisian and regional hotels showed a slow down in recovery with generally decreasing RevPARs. The Palaces & Deluxe hotels as well as the 2 star properties (both in the capital and in the provinces) are an exception to the dropping RevPAR trend while other categories are severely affected.
Activity of Parisian and regional hotels showed a slow down in recovery with generally decreasing RevPARs.
The Palaces & Deluxe hotels as well as the 2 star properties (both in the capital and in the provinces) are an exception to the dropping RevPAR trend while other categories are severely affected.
January presented an increase in RevPARs compared to last year, kicking of a year that hotel keepers see as a start for recovery both in Paris and in the French regions. February now casts a shadow of uncertainty with a general drop in performances for most markets mainly due to depressed demand.
In Paris, the average RevPAR of the midscale hotel market is down by -3,8%. This drop is due to sluggish demand (OR) - 4,8% compared to last year - while prices (ADR) remain stable. In any case, none of the categories observed ADR variation above +1,1%
Concerning the upscale segment in Paris, the Palaces & Deluxe hotels are the only ones to post increased RevPARs with +2,6%. This increase is achieved through clear progression of ADR (+4,4%) compensating the low occupancy rates (-1,7%).
The remaining 4 star categories are all in the same situation: occupancy down and stable or even declining average rates (ADR). However, the phenomena is extremely vivid for the Boutique hotels whose RevPAR plummeted in February (-10,3% compared to last year).
The midscale hotel markets present a more contrasted situation. The RevPAR of 3 star units (both superior and standard) was down by -5%, mainly due to lower average rates. 3 star superior hotels are moreover subject to decreasing demand. 2 star properties on the other hand post a RevPAR increase of +2,2% as a consequence of higher occupancy rates. Unfortunately the stagnation of average rates limits the growth in this segment.
In the Provinces, the demand is also decreasing. All hotel categories register falling occupancy rates, -2,3% for 2 star hotels, -4,9% for 3 star properties and finally -3,2% for the upscale segment.
Especially the upscale hotels suffer from the drop in demand because they do not manage to compensate -even partially - by increased rates.
Contrary to the upscale hotels, the midscale hotels in regional France limit the drop in RevPAR thanks to growing average rates. The 2 star categories even posts RevPAR growth.
The drop in occupancy in Paris and the Provinces can be explained by a lack of business clients. February could however be just a little misstep without consequences according to hotel keepers whose forecasts for March are positive.