After closing the year with encouraging results for the month of December 2022, with a 63.3% occupancy rate, €104.40 average price and €66.10 RevPAR, the Greater Lyon hotel market has continued to make good progress in the first quarter of 2023.
How did Greater Lyon fare in the first quarter of 2023?
It started the year with an occupancy rate of 71%, an average price of €119.80, and a RevPAR of €85.10, all of which are positive developments compared to 2022 (+58.8% occupancy rate, +51.1% average price, and +139% RevPAR) and 2019 (+6.7% occupancy rate, +13.5% average price, and +21.2% RevPAR). This is a clear increase compared to 2022 and a recovery compared to the pre-Covid period.
For the month of February, Greater Lyon recorded an occupancy rate of 66.8%, an average price of €93.90, and a RevPAR of €62.70, which are positive developments compared to 2022 (+17.5% occupancy rate, +16.1% average price, and +36.4% RevPAR) and 2019 (+0.4% occupancy rate, +13.4% average price, and +13.9% RevPAR). These performances were lower than January’s, but they did not disappoint and remained upwardly mobile compared to these two years, even if occupancy has barely changed compared to 2019.
What about March? If February's performance seemed to lose steam slightly compared to January, March has revived a positive dynamic that is slightly higher than January in terms of occupancy rate but lower in terms of average price. Greater Lyon closed the first quarter with an occupancy rate of 71.5%, an average price of €106.60, and a RevPAR of €76.20, all of which are still positive compared to 2022 (+1.0% occupancy rate, +19.8% average price, and +20.9% RevPAR) and 2019 (+0.6% occupancy rate, +16.1% average price, and +16.8% RevPAR).
Overall, this first quarter of 2023 ended with a cumulative year to date (January to March) occupancy rate of 69.9%, average price of €108.30, and RevPAR of €75.60, i.e. performances that were still up compared to the same quarter last year (+21.8% occupancy rate, +28.6% average price, and +56.7% RevPAR) and the 2019 quarter (+0.6% occupancy rate, +16.1% average price, and +16.8% RevPAR). RevPAR has increased significantly compared to 2022.
A look back on the events that have had an impact on Greater Lyon:
Several events favoured hotel occupancy such as SIRHA from 19th to 23rd January, CTCO from 31st January to 2nd February 2023, and Global Industrie from 7th to 10th March 2023. All three of these events were held at Eurexpo Lyon.
Focus on SIRHA
The increase in performance, in terms of occupancy, average price, and RevPAR, was evident throughout the period from 17th to 25th January. The hotels were very busy during these dates. The minimum occupancy rate was 76.8%, the minimum average price was €99.10, and the RevPAR was €80.50.
The record day on all performance indicators was 19th January, with an occupancy rate of 96.2%, an average price of €208, and a RevPAR of €199.90.
Testimony from Camille RUCKEBUSCH, General Manager Hotels & Events Lyon Bron Eurexpo at Accor:
“The balance sheet for the beginning of 2023 is very positive and up sharply compared to the two previous years, especially compared to 2022 which was impacted by the Omicron variant. Leaving aside the trade fairs, performance exceeded that of 2019 more by the average price than by the volume, which remained flat but was also up. We can therefore speak about a return to normal.
The upcoming events that are already increasing occupancy are the Rugby World Cup, WorldSkills, Solutrans, and Polutech, which are large trade fairs, as well as Equita, which has a strong impact on the Eurexpo area.
The first quarter was marked by strikes and demonstrations resulting in a loss of up to ten rooms per day. On the other hand, the strikes generated last minute bookings, as a result of train cancellations.
The February holidays went very well: every year, we see a transhumance of clients who come to ski, either for the holidays or for a weekend, and who also come back in the summer. The profiles include Parisians, Belgians, and Dutch. The Novotel brand is a very strong brand for welcoming families with children during weekends and holidays thanks to its family offers. As for the summer season, we will have to see if the post-Covid phenomenon, which pushed people to favour domestic tourism will be repeated. In any case, many more people are now going on holiday, both during the week and at weekends.”
Testimony from Marie-Cécile DESVISGNES, Group Revenue Manager for DALOFI, about the Mercure Lyon Genas Eurexpo hotel:
“At the end of March, occupancy rates, average prices, and RevPAR were up compared to 2022 and 2019, and we can pretty much say that the situation is returning to normal.
The events that have had an impact on the Lyon hotel industry from January to March 2023 were the SIRHA, CTCO, SPORT ACHAT, INDUSTRIE GLOBALE, and BE POSITIVE.
The upcoming events that are already increasing occupancy are the Concert at the GROUPAMA STADIUM, the 47th WORLDSKILLS National Finals, the Rugby World Cup, Pollutec, and Solutrans.
We have not been impacted in the East Lyon area by the demonstrations. There are last minute bookings and cancellations mainly due to transport strikes.
The type of customers who frequent the establishment has not changed. In the East Lyon periphery, the increase in demand is very late for the summer season.”
What are Greater Lyon's forecasts for the spring and summer seasons?
As mentioned above, several major upcoming events are already filling up Lyon's hotels according to a booking status report from 17th April 2023.
The series of events begins with the Mylène Farmer concerts scheduled for 23rd and 24th June at the Groupama Stadium in Lyon. The occupancy rates are already at 33.9% for 23rd June and 33.2% for 24th June 2023, and rise to 41% the day before the event.
The Lyon Hip 2023 Arthroplasty, the orthopaedic congress, will be held on 7th and 8th September 2023. A slight increase, compared to the other days, can be seen in particular on the nights of 6th and 7th September with occupancy rates of 20.4% and 22% respectively. Whereas the first days of the month oscillate between 9% and 13%. These dates mark the beginning of an overall increase for the rest of the month.
From 13th to 16th September 2023, the 47th edition of the Worldskills National Finals will take place, a competition in which French competitors will compete in technical events (food, service, construction, industry, communication and digital, automotive, and machinery trades). Occupancy rates ranged from 26.7% to 32.5% on 16th September, the last day of the event.
The big Rugby World Cup event will take place on 24th, 27th and 29th September in Lyon with three matches. The impact is evident from 21st September, with occupancy rates ranging from 31% to 59.6%. This peaks on the night of 24th September, which corresponds to the first Wales-Australia match. The Uruguay-Namibia match on 27th September has so far generated a lower occupancy rate of 18.6%, while the New Zealand-Italy match on 29th September is already at 34.9%.
The Lyon metropolitan area's hotels are expanding rapidly
Lyon's hotel offer is currently mainly composed of midscale hotels and residences with a majority of 4* and a minority of 5* establishments. The upscale segment is on the increase with a 5* offer that has doubled and a 4* offer that has also increased. The budget segment, on the other hand, is significantly down with a 1* offer that is decreasing. The Metropolis of Lyon is keen to preserve the furnished tourist accommodation sector, but also to maintain a balanced property market that is accessible to as many people as possible. On the whole, the hotel stock is made up of hotel chains, and hotel residences stand out in the upscale segment with an increase in the 4* offer. In addition to this, there is the arrival of international brands, offers, and concepts which are diversifying.
Hotel openings are planned for 2023 in the Greater Lyon market such as Pilo (January), Eklo Lyon (January) and Tour To-Lyon (September).
Many renovations are also underway, such as the Radisson Cour des Loges Lyon, formerly the Cour des Loges, which will reopen in the summer of 2023 under the Radisson Collection brand, and other hotels such as Mercure Carlton, Marriott Cité Internationale, Tour Rose, and Mercure Saxe.
A dynamic metropolis: the strategy and development of the Greater Lyon area
While the Covid-19 pandemic has impacted consumer behaviour and the operation of hotels, it has strengthened local tourism. It is through this dynamic that the Lyon Metropolis intends to counter the risks that arose from this period, by exploiting the positives that also emerged. Its strategy for attracting tourists can be seen via the implementation of various projects.
One of the main objectives of the Lyon Metropolis is to develop sustainable tourism. This desire, manifested by a development plan for tourist accommodation, takes form through a strategy that accounts for the evolutions and changes caused by the Covid-19 crisis, as well as the different environmental issues.
Although Lyon is a non-coastal urban destination, it is the second most popular French conference and trade show destination after Paris, with a business clientele present during the week and a leisure clientele present at weekends and during school holidays. Both of these groups are fairly balanced.
The Lyon Metropolis wishes to make its territory more attractive to tourists and to strengthen tourist accommodation in areas far from the centre and less equipped with tourist facilities. It is also a question of making up for the lack of accommodation for the inhabitants by offering them affordable alternatives.
Major construction projects are underway in Villeurbanne. The Lyon Metropole and the City Council of Villeurbanne plan to double the size of the city centre with new skyscrapers that will accommodate residents in accessible housing, as well as adding green spaces and pedestrian zones. New offices and shops will be set up in the new district by 2026. In addition, two other major works began in March: the arrival of the T6 tram for 2026 and the development of the Place Grandclément.
Major projects are also taking shape as regards the circulation of traffic. In Lyon, the Place Gabriel Peri, a large crossroads where several of Lyon's main roads intersect, is undergoing a metamorphosis with many improvements planned to address traffic, housing, and noise issues.
For its part, Lyon’s Presqu'île area intends to reduce traffic by becoming a limited traffic zone from 2025 and to promote pedestrian areas, all whilst reorganising the bus routes. By 2026, a new network of cycle paths will be created. It will cross the conurbation from north to south and from east to west. This Voies Lyonnaises project will result in the creation of wide and safe cycle paths.
Hotel performance in the Lyon metropolitan area is very satisfactory for the first quarter of 2023. The figures are up compared to 2022 and the post-Covid recovery marks a return to normal, which suggests a very positive summer outlook.
If Greater Lyon has been able to rebound in this way, it is partly thanks to its strategy of attracting tourists, which draws in both business and leisure customers. The organisation of a variety of national and international events attracts many visitors throughout the year, which Lyon's rapidly expanding hotel stock is able to accommodate. This strategy also includes the development of the area, both for visitors and locals, all with a view to sustainable tourism in order to take address all environmental issues.