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France: year-end onset of improvement

France's hotel industry is riding a rollercoaster. After a reasonable summer, followed by a catastrophic October marked by a historic double-digit drop in its RevPAR across all categories, the month of November ended with less disappointing results. The drop in RevPAR was limited to 6.3%, meaning a less pronounced drop than in 2008 (-7.1%). Noteworthy is the average daily rate that rose (+0.4%), which had not been observed since the first month of the year 2009. Growth on the 2* was fairly visible (+3.1%), even if it was offset by a drop in occupancy (-5.4 pts). As always since the beginning of the crisis, the average daily rate of the budget segment proves to be impermeable to the fluctuations of occupancy. Which is, of course, not the case for the 4* category. The occupancy of hotels once again had to be maintained by a flexible rate policy in order to adapt to the demands of Business clientele. Nonetheless, like the midscale segment, the upscale posts better results in November than on twelve months rolling.

The difference between results in Paris and the provinces was limited in November, but to the disadvantage of the French capital, which is more sensitive to the global economy. Paris benefited from the benefic effect of the biennial trade fair Batimat. Although this salon, visited by more than 300,000, was marked by lower volumes of visitors because of the crisis, it nonetheless brings in the visitors and the number of exhibitors was the same as in 2007. Thus, with respect to the many of months in the year when it fell behind, the Ile de France region falls within France's average, behind regions such as the Midi-Pyrénées and Upper Normandy but above the Rhône-Alpes, Provence-Alpes-Côte d'Azur and the Nord-Pas de Calais. Alsace was the big loser this month. Strasbourg benefited in 2008 from high levels of activity at the European parliament due to the French presidency over the European Union. The activity of its upscale hotels, in particular, suffered in comparison. Like last year, Lyon once again did not benefit from a favorable MICE calendar.

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