Should we trust the models that almost unanimously predict a continued upswing in hotel activity in the coming months or even years? Given the performances already achieved, the optimism expressed by experts does not seem unreasonable. Does this mean that trees could grow to the sky?
Certainly, the post-COVID rebound has been spectacular, almost everywhere. After a brilliant 2023, the performance in 2024 is being boosted by a series of events that distort the overall picture. The D-Day jubilee, the enchanting interlude of the Olympics, the Francophonie Summit, and soon the grand reopening of Notre-Dame are supporting an activity level that, without them, would be underwhelming.
RevPAR growth is melting away, and the double-digit increases will soon be a fond memory. However, this is merely a normalization of performance following the vigorous post-COVID rebound. Occupancy rates are proving more challenging—as evidenced by a lackluster early summer season and a gloomy year-end—and the rise in average rates is reaching the limits of acceptance, given an uncertain economic and social context.
Have a few years of plenty, following two years of scarcity, made us forget that the logic of cycles, though disrupted, has not disappeared?
Each month brings us closer to an inexorable yet predictable downturn—manageable if properly understood. But could this new cycle differ from previous ones?
Many economic analysts have placed their hopes on a Democratic victory in the United States, controlled inflation, and continued rate cuts initiated by the Fed, pulling the ECB along. However, this outlook is far from certain with a Republican in power, whose economic policy and its impact on global markets remain unclear.
Preparing for new market conditions in Europe should be a top priority for business leaders. As symbolized by the Chinese ideogram for "crisis," it represents a mix of danger and opportunity. Indeed, Europe’s hospitality ecosystem could become an interesting playing field. It remains highly fragmented, with a few heavyweights and many hungry challengers.
Will they seize the opportunity presented by a new phase of market consolidation and restructuring to reach a new growth threshold? Companies that relied on lifelines distributed during the pandemic are now facing a harsh reality if they did not use that time to reinvent and transform themselves.
The penetration rate of hotel brands has yet to reach the levels seen in the Americas or Asia. Moving from 50% to 75% in the coming years could result from stronger brand presence in the French and European hospitality landscape. Brands can justify their contribution to ROI, their more sophisticated customer approach, efficient distribution systems, and bargaining power with booking platforms. Numerous examples of recent hotel brands that have found their audience and are positioned to grow further underscore this potential.
As the Vendée Globe race demonstrates, success lies in smart tactical choices, effective data management, seizing opportunities, and a good dose of audacity. The time may have come for these ambitious companies to strengthen a European leadership that is within their reach.
Our European neighbors and competitors, led by Spain and Italy, are riding a seemingly unstoppable wave of tourism. However, they lack the same diversity of business and leisure markets that define the strength of French hospitality. If the winds are rising, they could also accelerate a transformation that should not be missed.
It is high time for a rebound in the French market, whose competitiveness has been slowly eroding. The net accommodation stock has not grown since the 2000s, with commercial lodging (excluding short-term rentals) capped at 2 million rooms. Likewise, the average annual occupancy rate stagnates around 67%, comparable to Germany—which does not have the same advantages—but well below the UK, which sails beyond 75%, and even Spain, which approaches that figure annually.
Could the "tricolore" hospitality ship be the pleasant surprise of the next cycle?