Continuous Growth For The French Hotel | BDO MG Hôtels & Tourisme - May 2006
The month of May has again been marked by an increase in performances. All market segments, except for the 2 star hotels, have benefited from increased room revenue. The 2 star segment has seen its RevPAR stagnate, both in Paris as well as in the other regions of France.
Since the beginning of the year, the Parisian upscale hotel market has continued to register top performances, the month of May hereby being no exception: The increase in room revenue amounts to a net percentage of 12.0%.
The good state of many of the incoming markets' economies gives hope that this upward trend will continue to manifest itself also in the future. The American economy for instance is bound to register a growth of 3.5% of its GDP in 2006. In Japan, the economic boom is getting more and more important too (+3.2% in 2006), situated in a particularly dynamic Asian context. Even the Euro zone has seen an improvement of its situation, with GDP increasing by 2% in 2006 compared to only 1.5% in 2005.
All of these good news make for a steady progression of the occupancy rates, 7.3%, but also of the average rates, 4.4%, as expressed by the RevPAR. This phenomenon manifests itself in all of the 4 star families, amounting to an increase of 8.1% for the 4 star deluxe hotels and of 15% for the 4 star standard hotels. The RevPAR of the boutique hotels has in turn progressed by 10.1%.
The hoteliers of the midscale segment in Paris can also be satisfied with their results in May. Even if the increase in room revenue is still less for 3 star hotels than for the upscale market, their RevPAR managed to increase by about 5%. The 2 star hotels have not yet fully benefited from the general upward trend, their RevPAR is stagnating.
In contrast to the upscale hotel markets in Paris, the RevPAR of the 2 star hotels maintained only a slight increase of the ADR (+2.4%). Their occupancy rate has in fact decreased by -1,8%.
As for the other regions, the overall room revenue has really taken off for 3 and 4 star hotels, who could register a percentage growth of about 15%. On the other hand, just like on the Parisian market, 2 star hotels have seen their RevPAR stagnate.
If for once the good results of the 4 star hotels are the fruit of a double increase of the OR and the ADR, the growth of the 3 star hotel market is uniquely generated by an increase in the average rate. As for the 2 star hotels, their increase of the ADR ist just about enough to compensate for the decrease in occupancy rates.
The 3 and 4 star hotel markets have benefited from a dynamic month of May fed by both the business and leisure travel segments. The long weekends in May have helped to attract a leisure clientèle that was felt to be missing in 2005. The 2 star hotel market, and especially the chain hotels, have profited less from this increase. On the contrary: the presence of many long weekends has in fact limited business travel activity and thus also the possibilities for this hotel market segment.
Although one should not forget about the threats (increase in oil price, Euro- Dollar parity etc.) that were to slow down this overall very positive development, we remain glad to see the market confirm its promising trends shown at the end of 2005.