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France: November 2010, the difference between Paris and the Provinces is shrinking

After two particularly busy months, the good news for November 2010 is that it continues the steady growth of the recovery, even if it is no longer double-digit. ORs and ADRs continue to drive the improvement but at a lower speed, taking into account a base effect less important in November, because the occupancy rate began to show signs of recovery at the end of 2009. Growth to come will bear on an increase in absolute value of average daily rates, progressively relieving the strong pressure experienced in 2009. This regular stabilization may also be observed in the more moderate improvement of results on the upscale segment. There is no longer the double-digit increase that testified in the previous months to the marked return of high-income international clientele to the capital and major cities. Paris and the Paris Region still benefit, however, from their advantage as the gateway to the country and hosts of major international fairs, but the provinces, overall, have reduced the usual differences during this recovery phase and show good performance.The new phase of the cycle has begun, and this one is propitious to a significant increase in average daily rates. And yet, Revenue managers are showing a certain amount of prudence and have made it a priority to reduce promotional rates as much as possible without significantly increasing rack rates or rates negotiated with key accounts. During the crisis corporations succeeded in reducing overall costs and now receive assistance from professional negotiators to maintain the rates they acquired during the crisis. The year 2011 will be a year rife with major events such as the Air Show and the World Congress of Cardiology, which should boost hotel demand and unlock a few doors. The euro/dollar exchange that is more favorable to the American currency is boosting the Leisure market. On 12 sliding months, growth in the RevPAR in France was higher than expected and is positioned at the upper end MKG’s forecasts last March. This is a good indication of the strong reactivity of the hotel industry that now has sophisticated monitoring and steering tools.

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