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July: France's hotel industry continues its course...

This July 2016, France's hospitality industry continued to follow the trend established since the beginning of the year, producing highly contrasting - and even opposing - results depending on region and range. While in the Paris region brighter skies are not always in the forecast, and the French Riviera is in mourning, other dynamics persist in the different regions.

With a Revenue per available room (RevPAR) down by 6.0% on a national scale with respect to the same period in 2015, the French hotel sector continues to suffer from the diversity of problems affecting the country. Windfall from the organization  of the Euro 2016 (which ended July 10, 2016), while they were generally positive, did not improve the trend. Generally speaking, across France, the occupancy rate is down 3.3 points. The average daily rate, meanwhile is down slightly by 1.7% due to the clientele mix (fewer vacationers on the French Riviera and in Paris), although it may be observed that aside from the upscale and luxury segments there was an overall uptrend for average daily rates. 

This month only hotels in the budget category posted growth in their activity, with a RevPAR up by 3.3%. Inversely, upscale and luxury properties are impacted by the drop in international tourist arrivals, Middle Eastern, Japanese and Russian clientèle. On this segment, the RevPAR dropped by 11.0% throughout the country , due in particular to an 8.8 point drop in the occupancy rate across the month. this is particularly true in Paris, where the RevPAR is down by 13.9% and the occupancy rate has slipped 12.5 points at hotels on this same category. The terrorist attack last July 14, in Nice unfortunately risks increasing the wariness felt by tourists regarding the security situation in the country, particularly individual long-haul leisure tourists who are particularly sensitive and very present in the clientele mix at hotels in July.

July 2016: Monthly results of hotel chains by category.

Results are once again contrasted in the different regions. In Paris proper the RevPAR down 15.3% in July due to an 11.9 point drop in occupancy with respect to July 2015. This situation may be explained in part by the security concerns that pervade the country and affect tourist arrivals. The Paris Region follows suit with a RevPAR down 10.3%.

In the different regions, the RevPAR tends toward stability with just 0.1% growth and an occupancy rate up slightly by 0.1 point with respect to the same period last year. The delayed effects of Euro 2016 may be felt in host cities in the provinces where quarter and semifinals were held. Moreover, these results may also be explained by domestic tourism that certain regions (particularly coastal) benefited from, with exception to the French Riviera.

July 2016 is thus in keeping with the hotel performances recorded since the beginning of the year with major differences between the territories. Since the beginning of the year the RevPAR in the provinces is up by 4.3%, while it dropped 12.7% in Paris and the Paris Region. On the first 7 months of the year, all  property categories outside economy hotels experienced a drop in their RevPAR. Upscale and luxury properties are the most affected (-8.4%).

This month the prize for best results goes to Brest, which saw its occupancy rate settle at 71.9% in July 2016, representing a 13.8 point increase and growth in its average daily rate by 45.1% resulting in a RevPAR up by 79.4%. This growth was driven in particular by the organization of the Seventh edition of the International Maritime Festival held from July 13 to 19, 2016; it is one of the biggest international gatherings of boats and ships.

Also read:

  • May 2016: slow growth widening gap between European hotel markets
  • June 2016 : weak growth for Europe's hotel industry
  • Another hard blow for French tourism after deadly attack on the French Riviera

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