Transportation Strikes: An Estimated Loss Of 6 Million Euros For The Parisian Hotel Industry | MKG Reports
While the month of November began with heightened activity in Paris, largely due to the trade show Batimat, the public transportation strikes had a negative impact on results. | During the strikes, occupation rates decreased by 3.2 points in Paris. Given the average price level traditionally reached during this period, the loss estimated for the period is estimated at 6 million euros for Parisian hotels.
- While the month of November began with heightened activity in Paris, largely due to the trade show Batimat, the public transportation strikes had a negative impact on results.
- During the strikes, occupation rates decreased by 3.2 points in Paris. Given the average price level traditionally reached during this period, the loss estimated for the period is estimated at 6 million euros for Parisian hotels.
- Despite the impact, these events do not question the sector’s success. The year 2007, as predicted by MKG Hospitality at the beginning of the year, will result in record numbers.
The strikes in Paris have effects on November’s results
Although November started off with performance rates of 20-40% above normal at the end of the Batimat trade show, the public transportation strikes which began on Thursday November 15 considerably slowed hotel activity. If the first days of the social movement did not yet reveal a significant decrease in RevPAR, the second week which began on Monday November 19 demonstrated a clear decline in activity.
- Evolution calculation based on the same day of the same week in 2006 (eg. Wednesday November 7, 2007 is compared to Wednesday November 8, 2006).
- Evolution of cumulative RevPAR from November 1 to November 25 2007.
An estimated loss of 6 million euros for the Parisian hotel industry
Although the increase in occupation rate trends remain at +3.8 points (average results observed in the city of Paris between January and the end of October 2007), the strike period was characterized by a decline in occupancy for Parisian hotel establishments of 3.2 points compared with the same period of November 2006. In contrast, hotels in the region of Paris (outside of the city itself) did not report such a decrease.
Given the level of average rates typically recorded for the month of November in Paris and the evolution since the beginning of the year, the loss for the Parisian hotel industry is estimated at between 5 and 7 million euros according to MKG Hospitality.
The record increase recorded in 2000 is still well within reach
Even though the transportation strikes had a negative impact in November in Paris, the increase in RevPAR registered for the first 25 days of November reached 11.5%. These events therefore do not seem to contradict the current favorable dynamic for the industry. The year 2007 remains among the record years in recent history.
The results in the increase in RevPAR at the end of October 2007 approach those for the totality of the year 2000 (+9.4% over the course of the year), a performance rate which has not yet been reproduced over a full year.
From January to October, the RevPAR increased by 9.1% on a national scale: in particular, occupation rates experienced a marked increase in Paris and the Paris region of more than 3 points. The French capital benefited fully from events which attract activity for hotel establishments: the Airshow in June and the Rugby World Cup in September and October.
It should be noted that these results match perfectly with the figures anticipated by MKG Hospitality, which at the beginning of the year predicted an increase in RevPAR of 8-10% for 2007.
Cumulative results from January to October 2007
Created in 1985 by Georges Panayotis, MKG Hospitality is the European leader in consulting in the hotel, tourism and restaurant industry and has the largest hotel database in the world excluding the United States, with representation of all hotel segments. MKG Hospitality’s monthly database programme holds a sample group of 10 000 integrated chain hotels, a total of 1,000,000 rooms.
Since September 2004, MKG Hospitality’s database has developed a daily programme, Hotelcompset.com, which allows for daily activity indicator tracking, hotel by hotel. This programme includes 1,500 hotels and 125,000 rooms in France, which counts as the largest daily performance tracking programme in Europe.