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August 2016: bleak outlook for French hoteliers

This August 2016 once again offers bleak results marked by a more generalized down trend. Unlike the previous months, no category was spared and the trend may be observed in the different regions as well as in Paris and the Ile de France. The impact of the attacks last July 14 in Nice was unfortunately quick to take effect: the strong drops in Paris, the Île de France and PACA regions all pulled the national result down into the red, even if certain regions, particularly shorelines, showed slight growth.

Throughout France, the Revenue per available room (RevPAR) is down 13.4% with respect to August 2015. The occupancy rate fell by 5.1 points together with an average daily rate that is also down by 6.7%. Hoteliers in the Hexagon struggle to reverse the trend that has been evident since the beginning of the year. The sector is once again impacted by the insecurity felt throughout France that has dissuaded some foreign clientele from traveling to the country. It is nonetheless important to remember that the Île de France and PACA regions represent close to 50% of the revenue from the hotel industry. Thus, the powerful drop of results for both regions following the attacks influences the global balance despite positive results posted in coastal regions this year.

In this month of August 2016, the downtrend affected all properties nationwide across all categories. However, upscale hotels have once again been impacted by this poor economic situation; they post a RevPAR down by 21.7% with respect to the same period last year. The drop in arrivals of international clientele (especially long haul) weighed heavily on the balance of this stormy month of August. the occupancy rate is down 11 points and the average daily rates follow the same evolution (-8.7%). The attacks in Nice, last July 14, have boosted the wariness that is expressed with respect to major poles in the destination France. Hotels on the budget segment are less affected but are also experiencing results that are down (RevPAR -1.6%). Some of the summer clientele tends to be increasingly seduced by offers for alternative accommodations – the availability of apartments swelled by 20% thus summer.



August 2016: Monthly results of hotel chains by category



The strongest drop goes once again to Paris, with a RevPAR down sharply by about 31.5%. The occupancy rate at Parisian properties reached 62.5% meaning a 16.8 point drop with respect to August 2015. The average daily rate dropped by 13.1%. These results may be explained especially by the poor performances at upscale properties, which were directly affected by the drop in international clientèle in the capital. The Île-de-France was no different and presented a RevPAR down by 20.7%.

In the different regions, performances were stable last month. In August 2016, the strong drop in the PACA region pulled the RevPAR down (-4.6%) with respect to the same period last year. All the properties (aside from hotels in the budget category) post performances that are down.

Since the beginning of the year, results remain very contrasted in the concerned areas. The RevPAR is up by 3.4% in the provinces on the first eight months of the year;  with results up across all hotel segments. In the capital and the Île de France, the trend is reversed; the RevPAR is down 14.4%, and all the categories post indexes that are down significantly.

In August 2016, the town of Epinal, in the Lorraine, department of the Vosges, stands out among other French towns with a RevPAR up by 33.7%, driven by an occupancy rate that is up by 15.7 points and an average daily rate down slightly by 1.3%. This performance may be explained in particular by the organization of free concerts and shows (from July 8 to August 19) under the slogan "Epinal bouge l’été" and especially the reception of the kick off of the first edition of the Vosges Rallye Festival, sponsored by Sébastien Loeb, which seems to have born its fruits.

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