Analysis - Updated

French hotel supply: Territories, who is winning and who is losing?

More than ten years after the beginning of the economic crisis, the French hotel supply has developed in a particularly heterogeneous manner from one territory to the next. Which departments lost and which gained in terms of hotel supply?  

change in supply in departments change in supply in departments


While the hotel sector is increasing steadily worldwide, France cannot say the same: due to a steady decline over the period 2008-2014, the overall hotel supply has even declined over the decade. This erosion has been somewhat reabsorbed in recent years, thanks to the successive rebounds. As of January 1, 2017, France's overall supply was up by 2.1% compared to last year, bringing 2017 closer to levels recorded in 2008.

Although France overall has seen its hotel supply shrink slightly over the past decade, the underlying territorial dynamics are not at all uniform:

Analysis of this map and of the precise results (see detailed data in our infographics available to subscribers) shows a differentiating factor in this context of supply erosion from 2008 to 2017: the urbanity of the territory. The map of France is then divided into three main parts: departments with a large city, predominantly rural, coastal or mountainous territories, and intermediate departments situation (usually a secondary urban area).

The first group is easily recognizable: these are the departments comprising the major French cities (Lyon, Marseille, Nantes, Bordeaux, Lille or Montpellier, and of course Paris). These have seen their offer consolidate significantly: during the years of crisis, the growth in the supply was driven by the development of chains, which compensated for a shrinking hotel industry; and for 3 years now chains and independent properties (driven by the development of the "boutique hotels") develop simultaneously. The offer has developed well over the past decade.

Conversely, many departments have experienced a drastic drop in hotel supply. Deserted by independent properties and particularly old properties on the economy segment that have become obsolete, these territories have not seen new initiatives develop. They experienced a general weakening of the supply in terms of volume, with transfer effects in the best case towards residential or seasonal (camping) offers. In many of these territories, particularly rural ones, gites and bed and breakfasts or alternative accommodations (Homeaway, AirBnB) may soon be the only accommodations available. There are, however, some notable exceptions, such as the Alpes-Maritimes, where the decline in hotel supply over the past decade is mainly due to transfers from the former structures to the residential market (or tourism residences), but where demand is strong.

Between the two extremes formed by the major cities and more rural territories, there are departments that have generally experienced a moderate drop in their independent supply offset by the increase in the supply of channels. These territories, such as the Loire Valley or Champagne, enjoy a greater appeal, but it has not been sufficient in recent years to drive the development of supply.

Finally, it should be noted that a certain North / South divide can be detected: the independent supply, which has historically been more present in the southern half, was the one that fell the most during this decade, while departments in the Northern half have benefited from the development of the chains and were not as affected by the shrinking traditional independent hotel industry.

What are the perspectives?

This reading invites us to take a new look at the prospects of the French hotel industry, particularly in terms of supply. Thus, in large metropolises and traditionally promising sectors, the increase is strong and could accelerate if development projects (such as Greater Paris) free up new real estate and property opportunities.

The drying up of rural areas and tertiary agglomerations has been a sad reality for many years. But the structural problem is that of appeal, because despite the decline in supply, hotel demand is still suffering: it will probably be necessary first to find ways to attract jobs and / or visitors belonging to the "millennials" generation, before the hospitality industry became interested again.

Lastly, the intermediate zone could be called upon for new perspectives. If the context of a rebound in hotel occupancy in France is confirmed, this could be the beginning of a recovery of growth in supply and demand in these territories.