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Analysis

The first assessment of Summer 2017: with the capital in the lead, French hospitality sees the sun once again

The French hotel industry recorded good performance this summer, driven by the strong recovery of Paris and Ile-de-France - liberated from the security yoke of 2016 - and the good results of the province apart from the coastal areas. On the coasts of France, average weather and / or the absence of certain engines have sometimes weighed. After a mixed month of July, with a strong rebound but prices falling, it was the first fortnight of August that helped to shift the results more positively. The outlook is thus encouraging for the end of the summer.

The first estimates of French hotel performances for the summer of 2017 already make it possible to draw up a much better summer assessment than last year. Countrywide, between July 1 and August 15, hotel turnover increased by +3.1% compared to last year. This was due to strong growth in the occupancy rate (+3.9 pts), while average prices fell by -2.4% over the period.

The month of July was rather mixed: although the occupancy rate rose by +3.8 points (to 74.9%), it happened at the expense of price cuts by no less than -3.2% on average. The situation improved in the first two weeks of August: growth in arrivals accelerated (+4.7 points), allowing average daily rates to rise slightly (+1.8%), although this is not enough to compensate for the previous month's declines.


Results for the summer show growth on all segments, but it is the upscale hotels which were most affected by the drop in prices (-4.5%). As a result, the midscale, budget and economic categories grew the most over the period, with a RevPAR (Revenue per available room) increasing by +6%, +4.1% and +3.8% respectively, while the upscale & luxury only rose by +0.7%.

Ile-de-France hoteliers are rubbing their hands: heavily handicapped by the security situation last summer, tourism in Paris and Ile-de-France is regaining color, with a good increase in occupancy rates (+6.7 pts in Paris, + 7.2 pts in the rest of Ile-de-France), although average daily rates fell again (-3.5% in Paris, -1% in IDF excluding Paris). Despite two good first weeks of August (+ 7.8%), the provinces, which had compensated for the poor performance of the capital last year, shows a more moderate increase (RevPAR +0.7% on average over the period). This is partly due to the fact that many cities benefited from an influxow of tourists during Euro 2016, which drove average daily rates until the end of the competition in mid-July. The final outcome could therefore be more positive.

Offshore hoteliers, in particular, are not denying their pleasure and enjoy good results over the period (RevPAR + 4.6%), as they are experiencing an upturn in occupancy rates (+4.3 pts) within a context of falling average daily rates (-1.6%). As a result, they followed the momentum that began in summer 2016, when their RevPAR grew by +3% compared to the previous year. 

Hoteliers in coastal areas, which recorded mixed results in July, recovered at the beginning of August thanks to an upturn in average daily rates, although this is not enough to offset low occupancy: over the period, their RevPAR dropped slightly (-1.2%). In detail, the Atlantic seaboard is the only coastal zone to achieve better results than last year (RevPAR +1.1% over the period), while Brittany, Côte d'Azur and the Channel are picking up because of the drop in average daily rates. This is particularly true in Normandy, which in July 2016 hosted the Grand Départ of the Tour de France. Meanwhile, in July the Mediterranean paid the price (-5.1%) of geopolitical tension affecting the Middle East, the source of clientele accustomed to the French Riviera. Fortunately, the region is catching up at the beginning of August thanks to Nice's revived market after being weakened last year by the attacks on July 14, 2016.

Also noteworthy is the good performance of the Aquitaine, where RevPAR is up +4.6% this summer, as well as greater Rennes (+10.6%): the launches of the high-speed lines Tours-Bordeaux and Le Mans-Rennes already seem to be bearing fruit for the hotels of these destinations.

In short, French hotel results for July-August 2017 attest to good results with respect to the previous year, particularly for the capital, which relieved itself of its security yoke. The provinces continue to have a favorable climate despite average daily rates being down, while coastal areas, which were sluggish in July due to poor weather, bounced back at the beginning of August. 

France's hotel results in July-August 2017 show good results compared to last year, especially in the capital, which has released itself from the weight of security. The provinces, however, remain in a favorable climate despite average daily rates being at half-mast, while the coastline, which was sluggish in July especially due to a disappointing weather, bounced back in the first fortnight of August.
 

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