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2008: the good momentum at the beginning of the year slowed as the crisis mounted

March: A positive trend despite loss of speed

After two excellent months of January and February 2008, the dynamic rhythm felt throughout the year 2007 begins to weaken. The trend continues to be positive and while the global occupancy rate might be stagnating, the level remains high. Growth in the RevPAR is “only” by 4% but with respect to an excellent 2007. In this overall context, hoteliers always favor improvement of the average daily rate by applying yield management oriented towards clientele with high revenues. Upscale hotels –and Parisian luxury hotels to an even greater extent – drive growth in the RevPAR. The year was off to a good start for maintaining its status as an industry reference.October - The growth engine drained of energy The absence of the final matches for the World Rubgy Cup 2007 dragged results down for hotel activities in October 2008. Penalized by the drop experienced by Paris’s upscale segment, the revenue per available room posted a 3.4% drop. This expected drop is perfectly in keeping with a “normal” year, thus growth in the RevPAR is close to 11% with respect to October 2006. However, it cannot be ignored that the growth engine is not sound. Average daily rates show only a slight drop by 0.5% and occupancy is down by 2.2 points. But business indicators are nonetheless in the red.June - the absence of the Air Show drags business down Global growth in the RevPAR is still positive in June 2008 while June 2007 had already proved exceptional with growth by 13.4%. The Air Show at Le Bourget bene.ted Paris’s hotel industry, which unsurprisingly posts a drop by 1.1% in June 2008. But the rest of the national territory continues to show results following a positive trend. Demand remains high enough to ensure significant growth in average daily rates: +4.0% on a national scale. Quite logically 4* properties, the great beneficiaries of the dynamic in 2007, post mixed results. Nonetheless, average daily rates remained steady at the level of June 2007, which remains a very positive result.August - A warning shot for occupancy rates Summer 2008 was not the disaster forecasted by some. After a month of July during which the RevPAR grew by a further 4%, August posted results almost identical to the previous year’s and can withstand comparison to a record month in 2007. And yet, a difficult economic climate was settling in and a sensible drop of the global OR by 3 points led to concern about the onset of a more pronounced turnaround. Growth continued thanks to good management of average daily rates, but how long can hoteliers resist the erosion of hotel occupancy?October - The growth engine drained of energy The absence of the final matches for the World Rubgy Cup 2007 dragged results down for hotel activities in October 2008. Penalized by the drop experienced by Paris’s upscale segment, the revenue per available room posted a 3.4% drop. This expected drop is perfectly in keeping with a “normal” year, thus growth in the RevPAR is close to 11% with respect to October 2006. However, it cannot be ignored that the growth engine is not sound. Average daily rates show only a slight drop by 0.5% and occupancy is down by 2.2 points. But business indicators are nonetheless in the red.

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