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Analysis

Development: French hotel chains move ahead

After a moderate year in terms of creating branded hotel supply, the rate of development of hotel chains in France regained speed in 2015 within a more favorable context. While the primary hotel groups present on the territory have generally maintained their positions, it is above all the tendency towards consolidation of the global hotel supply that has a significant impact on the Top10 operators.

In 2015, hotel chains have given new impetus to their development in France. While the trend in previous years was more towards a slowdown in the growth of the branded supply, the growth rate just reached 1% in 2014, and the number of chain operated rooms grew by 2% in 2015. Their development took place within a context that is more favorable for Europe's hotels than last year, even if the hotel industry's rebound happened later in France. It also must be emphasized that the growth rate of the branded supply was not as quick as that of independent hotels and consortia, which reached 2.7% on the period; the chains thus followed the market trend rather than act as a growth engine, as they had in the past.



Corporate operated chain hotels in France
As of January 1, 2016



6,199 rooms net have thus joined the branded national hotel supply, which has a total of 4,296 hotels and 319,192 rooms on January 1, 2016. Brands now account for 48.1% of the national supply. Their weight in the global supply nonetheless remains higher at the two extremes of the ranking, meaning in the budget segment (66.9% of the French supply) and the upscale and luxury segment (60.6% of France's supply).

The upscale and luxury segment is also where the capacity of chains progressed the most compared to 2015, growing by 1,900 rooms net on the year. This 4.4% growth over the previous year allows it to reach a total of 44,637 rooms in 326 hotels. The growth recovery market segment came after a year marked by several temporary closings of iconic properties, and structural growth should continue over the years to come. The corporate chain supply is also up on the other segments, but more moderately, with a growth rate of 2.2% on the midscale and 2.3% on the budget segment. The economy segment, instead,  posted the strongest growth in its supply, by only 0.5%, while it unites the highest volume of branded rooms sold in France, or 32.2%. The rest of the supply is relatively well broken down among the segments, with 26.3% positioned on the budget segment, another 26.3% on the midscale 14% on the upscale and luxury segment.

Most of the French chain supply is operated by a set number of players. The ten leading operators on the market share three quarters of the chain supply available on the territory, with 275,442 rooms flying their colors.



By far the leader on the French market, AccorHotels accounts for almost half of the chain-operated rooms. Moreover, the group gained a lead on its competitors in 2015, with the acquisition of the Canadian FRHI Hotels & Resorts, which brings together the brands Fairmont Hotels & Resorts, Raffle Hotels International and Swisshôtel (read our article). Combined with the organic growth of the operator, this takeover allowed it to add 35 hotels to its network in 2015 and grow its room inventory by 2.3%, while further reinforcing its positioning on the upscale and luxury segments throughout Europe and worldwide. AccorHotels thus confirms its position in first place in the ranking of hotel groups in France, realized in function of the number of rooms.

Louvre Hotels Group confirms its title as second operator in France, also representing a considerable share of the market with 54,653 rooms operating on January 1, 2016 (+0.7% with respect to the same date in 2015). Since it went under the Chinese banner last year, the group has become the European headquarters of its new owner, Jin Jiang International, a status that should allow it to accelerate its development in the course of the years to come. In an interview with Hospitality ON, Pierre-Frédéric Roulot, newly the CEO of Groupe du Louvre while continuing his functions at the head of Louvre Hotels Group while waiting for his successor to be named, explained his desire to make the group the leader for welcoming Chinese visitors in France and in Europe.

Third in the ranking, B&B Hôtels is surely one of the hotel groups that has grown its supply the most in 2015. with an additional 1,777 rooms net added to its network on the territory, the Breton group was able to record double digit growth in its supply by around 10.5%. In addition to the steady rate of openings across the year, in recent months the operator inaugurated its two biggest properties: B&B Porte des Lilas, with 265 rooms, and B&B Disneyland Paris, with 400 rooms. B&B Hôtels has also recently been marked by the onset of exclusive negotiations by the investment fund PAI Partners to takeover shares in its capital owned by its majority shareholder, the Carlyle fund (read our article).

Heretofore considered a consortium, the Société Européenne d'Hôtellerie (SEH) joined the category "Hotel chains" category due to its status as a cooperative and principle of exclusive affiliation, but also because the group develops its own hotel projects through its subsidiaries. The SEH thus joins the Top10 hotel groups in France in fourth place in the ranking with 17,895 rooms in operation on January 1, 2016.

The group thus enters ahead of Best Western, which was nonetheless able to make its supply grow by 6.1% in 2015. The group is now positioned in fifth place in the ranking with 16,159 rooms. In 2015, Best Western was taken up by a new president for France: Quentin Vandevyer, who succeeded Pierre Salles.

Choice Hotels is also one of the players that posted double digit growth in their supply in 2015, by around 12.7%. The group thus maintained a good position in the ranking, as the sixth player in France.

Another major movement in the Top10 hotel groups in France, is the takeover of Starwood Hotels & Resorts by Marriott International (read our article) that aloud the future ensemble climb to 7th place in the ranking for 2016. Respectively 14th and 10th last year, the two players brought together their respective inventories for a total of 7,199 rooms in operation on French territory.

With more moderate growth in its supply in France (+1.4% rooms in 2015), InterContinental Hotels Group slips three rungs in the ranking. The hotel group nonetheless remains among the Top10, positioning itself in 8th place. In 2015, IHG inaugurated its fifth address under the InterContinental Hotels & Resorts in France, in the city of Bordeaux.

Walt Disney Company also holds onto it position in the ranking among the ten leading hotel operators on the territory, with a supply of 5,167 rooms in France.

Finally, although the inventory of brand Balladin at Dynamique Hotels Managment (DHM) was down by 14.1%, the operator remains among the Top10 hotel groups. The new properties opened in 2015 did not offset the closings, while the group has been focusing on the viability of its supply for several years after signing an agreement with its creditor in 2013 to guarantee its longevity.

Consult the ranking of the 20 leading groups and 20 leading chains in France in the "French Hotels Report 2016," available soon from our  online boutique.
Contact us for more information, by email at webeditors(@)hospitality-on.com or call 01 56 56 87 73


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