Despite Urban Violence, An Excellent November For France’s Hotel Industry - MKG Reports

The preliminary results of MKG Consulting’s daily programme confirm the excellent results of France’s hotel industry in November. The occupancy rate rebounded by 2.5 points to 65.6% while average daily rates rose by 5.7%. Across the month, the RevPAR rose by 10%, which would constitute the best results this year if the definitive results confirm these figures.

In November, all indicators were green, with an excellent November in particular for the 4* segment. This category reported an increase in its occupancy rate by 6.1 points and an increase in its RevPAR by nearly +17%. The other categories also reported satisfactory results, the 3* category in particular where revenue per available room rose to 8.1%.

These results confirm MKG Consulting’s first results for November; the impact of the riots on the performance of the French hotel industry is minimal or non-existent for November.

Several reasons explain this excellent performance:

• At this time of year, and during the period when the rioting took place in particular (first two weeks in November), Leisure clientele is relatively absent. The few cancellations received from Leisure clientele were thus generally compensated for by the dynamism of Business segments.
• In Paris in particular, the month of November was excellent. The hotel business received a boost from Batimat 2005, the international construction expo. The previous edition of this biannual salon took place in 2003 allowing hoteliers to post a significant differential over 2004.
• The third factor, a calendar for 2005 that is more favourable with All Saint’s Day school holidays that ended earlier in November with respect to 2004 and that had less impact on the business hotel industry.
• Finally, this year, more than last, there were a series of factors that combined so that upscale properties posted good results: a more advantageous euro / dollar parity and renewed airline traffic generated more Long Haul clientele in 2005.

Methodology - MKG Consulting is the leader in consulting for the Hotel, Tourism, and Catering sector, and has the largest database in the world, outside the USA, with a good representation of all the hotel segments. MKG database’s monthly programme bears on a sample of 10,000 corporate chain hotels, representing 1,000,000 rooms.
Since September 2004, the MKG Consulting Database has offered a programme that allows the daily monitoring of activity indicators for each hotel. In November 2005 already included 1,000 hotels and 125,000 rooms in France.