Looking at hotel performance trends during challenging times, there is an all but clear synopsis; inner city markets are a lot more volatile, yet also in a better position to achieve optimal results when conditions are good – provincial markets are somewhat more stable, but also restricted in what growth they can achieve.Key cities in Europe are indeed very dependant on global economy. When conditions are bad, or such as the case recently, horrendous, hotels in these destinations suffer severely. Business demand diminishes – key city locations is where most company and organisational head quarters are based, as well as where most MICE activity takes place – and international leisure arrivals and length-of-stay declines. Furthermore, Luxury hotels (usually located within the inner city) are also first to feel the brunt, and in turn instigate a price war dominoing all the way down the categories. Hotels during this period heavily drop their prices in order to stimulate some sort of demand and maintain descent Occupancy Rate (OR), cruelly affecting RevPAR. In contrast, provincial areas seem to be a lot more resilient, sustained by domestic and to a lesser extent intra-regional demand, and not suffering as much from loosing a major clientele segment, i.e. MICE. Additionally, operational costs, namely salaries and rent are also less.When the economy is growing and conditions are positive however, city hotels are able to capitalise more and benefit from higher room rate increases. Provincial hotels are more limited with rate growth, while demand is gradual.French market sees disparitiesFrance is the perfect example of this clear division between city and provincial, including areas made-up of the country’s secondary cities and regional locations. Q1 through to Q3 2009, Paris clearly suffers, dropping to record low performances; other main cities and regional destinations manage to remain somewhat resilient. As the...