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France: October 2010, an upset brilliant month

Launched by the exceptional results of last September, autumn in France’s hospitality industry presented itself under the best auspices. Hotel activity in the Paris region was stimulated by an edition of the Paris Motor Show and was sustained by the success of professional events such as Fashion Week, followed by the exhibition Sial. Hoteliers reported business improvement by around 20% with respect to the first weeks of October 2009. The repeated strikes only had minimal repercussions on the Business activities in major cities. Although the dynamic was weaker, hotel business in French regions followed the same trends with clear growth on 2009. It took the threat of a significant fuel shortage just prior to the fall school holidays for the situation to get worse. The first cancellations were in destinations that are popular for short stays. Companies cancelled seminars and business meetings out of fear of absenteeism. The last week of October was marked by a sharp drop in business, although it does not affect the overall good results of the French hotel industry on the period.Growth in France since last spring follows the usual national schema, resistance and limited growth of the economy categories and strong variations on the higher categories. The indicators are all green, with exception to a slight contraction of occupancy on the 1* segment, marking the progressive improvement of average daily rates. Promotional rates have been put aside. When the changes are by a few points and a few percentages in the 1 and 2*, they are most often double-digit in the high categories, particularly on the 4* where the RevPAR leapt by more than 20% from one year to the next. The movement was totally driven by the Paris region, where growth figures are also double digit (+24%) compared with constant stability in the rest of France (+1%). Naturally the return of foreign clientele to France, through its primary gateway, is stimulating October’s results. Certain regions, in the Southwest in particular, have it more difficult in the autumn months, and even experienced a drop on 2009. Over the last twelve months, the average of these performances allows us to announce growth in the RevPAR at the upper end of the spectrum of our forecast: between 6 and 7% on 2010.

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