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France: a record drop in the RevPAR

The easing up of the drop that could be observed in August and September was only brief: the curve turned signi.cantly downward again last October with a drop in the RevPAR by 12.4%. This was not only the biggest drop since the beginning of the year, it was also an historic record that even surpassed the crises at the beginning of this millennium. And while the great cities and categories affected by the economic situation had already occasionally experienced double-digit drops, in recent years the entire French hotel industry had never experienced such a slump. The upand midscale segments felt pressure from Business clientele who are making hotels suffer their absence. The 3* category experiences two-fold competition from the economy hotel segment and upscale properties. It loses nearly 7% on its rates on average while upscale hotels lose 12.5%. The 2* category fortunately succeeds in keeping its daily rates a.oat because as far as occupancy is concerned results have been disappointing: down 6.4 pts.

Even during the worst drop in hotel activities that occured after 9-11 and the health and geopolitical crises in 2003, France never saw its RevPAR make a double-digit drop across all categories. The drop in occupancy generalized, and yield management strategies proliferated in an attempt to stimulate customer arrivals with a more aggressive rate policy. But it is difficult to find happy situations in a French hotelscape marked by a long list of double-digit slumps. Business clientele are quick to ask for major discounts to justify their presence in hotels. The regions of Ile-de-France and Paca suffer, while the Nord-Pas de Calais is experiencing the sharpest drop in occupancy (-10 pts). But the drop-award goes to Cannes, which would have happily by-passed this sad record, being more accustomed to the success of its Business tourism. But the calendar is emptier and occupancy less sustained. And yet,it is precisely Business tourism that made a city like Saint-Etienne to come out on top. It took just two well-attended congresses last October to set a smile to hoteliers' faces. But for how long?

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