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October 2014: recovery confirmed for France's hotel industry

France's hotels pursued a good dynamic in October. In the Paris region upper segments drove growth.

With occupancy rates up 0.9 points at hotels, they were more than 70% on the period. After several consecutive months on a downtrend at the beginning of the year, the average daily rate finally began a significant rebound, increasing by 4% with respect to the previous year. All categories combined, it reached 91.1 euros. The rebound in occupancy combined with a Revenue per available room (RevPAR) up by 5.4% in October. While this improvement affects all hotel categories, it is more significant on the midscale and upscale segments, where the increase in the RevPAR reached 7.3% and 7.4% respectively. The economy segment did well also with 4.2% growth in its Revenue per available room, while the budget segment improved by only 0.1%.

The Paris Region undoubtedly played an important role in national results, with increases in the RevPAR reaching 11.4% in the capital and 16.2% in the Paris Region. Primarily due to the increase in average daily rates (10% in Paris and 9.5% in the Paris Region), this growth also results from an improvement in hotel occupancy that was more evident in the Paris Region (+4.6 points) Paris itself (+1.1 points). In October the Paris region was busy with events including the organization of several biannual exhibitions such as the Paris Motor Show. Nonetheless, results were less reassuring in the provinces, where hoteliers continue to struggle to regain a growth cycle. The RevPAR in October 2013 was supported by several events such as the European Capital of Culture Marseille, and the hosting of several major conventions. In October 2014, the RevPAR fell by 1.8%, due to a 0.2 point drop in occupancy rates and a 1.5% drop in average daily rates. This drop offset the 1.8% increase observed in September in the provinces, where August had been a good month (+3.8%), but July was still poor (-3.2%).

Hoteliers in the region have thus not fully returned to a recovery the way the Paris region and the other European countries have (read article). But the evolution of results in the capital and upper segments are often advanced indicators of future global trends; their recovery is thus a positive sign for all French hoteliers.

Above all, the solid results in October allow the sector return to the green across the first ten months. From January to October 2014, the Revenue per available room for French hoteliers was relatively stable in 2013, with a 0.1 point increase in occupancy rates and a 0.2% drop in average daily rates.

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