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December 2016: The French hotel industry struggles to recover

December 2016 stands out for the new drop in indicators throughout France. Real disparities continue to subsist between the Paris Region and the PACA region compared to other French regions. This observation is evident across twelve months. Looking at results posted in France in December 2016 and and the rest of the year.

Throughout the country hoteliers have recorded results that are down slightly compared to December 2016. Their RevPAR (revenue per available room) is down -0.6%, despite a basis of comparison with the previous year upset by the context of insecurity following the attacks on November 13, 2015. this drop may be explained by the drop in average daily rate by -5.4%, that the increase in occupancy rate (by +2.6 points) could not even compensate. This month, the economy segment experienced a strong drop in its indexes (RevPAR down by -1.8%).





In Province, professionals on the sector have experienced a new positive evolution for their results. Their RevPAR progresses by +3.3%, compared to December 2015. This index is driven by an occupancy rate that is up by +1.7 points. The average daily rate is down slightly by -0.2%, prices thus remained nearly stable.

In Paris, indicators are down once again, despite comparison with a poor previous year. Nonetheless, it should be recalled that until December 12, 2015 the capital hosted COP21. This event caused average daily rates to go up. This factor partly explains the drop in this indicator in December 2016 by -10.6%, even if the drop in prices has also been an underlying current in Paris for several months; hoteliers are trying to improve occupancy. The capital shows a rebound in its occupancy rate by +6.8 points. The Île-de-France follows the same trend: its RevPAR is down by -9.5% due to e strong drop in average daily rate (-13.8%) while occupancy grows. Contrary to last month, upscale Parisian hotels post results that are up slightly (RevPAR +0.3%); this segment posted the best performance (economy hotels saw a drop by 4.0% in the capital, and midscale hotels posted -2.0%).

Across the year, France posts indicators that are down compared to the same period in 2015. The RevPAR fell by -5.1%, due to an occupancy rate down by -1.2 points and an average daily rate down by -3.3%. These are the worst results since 2009. The upscale segment was hit the hardest resulting in a RevPAR down by -9.1%, demonstrating the wariness of international clientele for travel in France. There is also a high concentration of properties from this category in Paris and the PACA region, which are the two regions that were the most affected by security issues (with differences , nonetheless, between different cities in the PACA region). Except for the hard budget segment, all hoteliers show results that are down .

This trend may particularly be observed in the capital across all sectors. Paris's RevPAR is down -14.3% across twelve months, Resulting in a critical situation, considering that the Île-de-France represents 35% of France's hotel revenues.

From January to December 2016, results were up in other regions. The provinces posted a 2.8% increase in its RevPAR, driven by a combined increase in its occupancy rate and average daily rate by +1.1%.

For more figures and details read the 2016 report for France in the European Hospitality Report France that is available for pre-ordering now before its official publication date of January 31, with the code EARLYEHR at our online store

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