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Tourist Residences, a market in full transformation

On July 22, 1983 regulations for tourist residences were officially created in France. Various tax incentives were implemented to encourage the development of these accommodation products in order to compensate for the lack of accommodations in some destinations.

The supply in terms of beds in tourist residences is still much more abundant in the mountains and coastal areas than in urban and rural areas. 

The establishment of tourist residences in France has historically been determined by the will of public authorities to develop and reorganize certain areas based on leisure tourism. The creation of the status of tourist residences has enabled the development of coastal and mountain areas, particularly in resorts. graph

Mountain and Coastal areas represent two thirds of the beds in tourist residences in France. This may be explained by the large number of beds per apartment (4 beds on average per apartment). In fact, vaster apartments are intended for holidaymakers, traveling as a group or family, while urban residences generally offer apartments adapted to business stays and thus have a high share of studios. graph

The preponderant supply in the mountains and on coastlines is more visible when beds are classed by department. 

In 2017, in mountainous regions, the supply of beds was concentrated in the resorts where 220,000 represent 30% of the global supply. Only 4% of the global supply is in mountainous regions outside resorts. On the coastline, the bed supply represents 32% - 14% in coastal towns, 18% in rural coastal areas. Finally, 14% of the bed supply is in the countryside and 20% is in urban areas in the interior of the territory.

Unsurprisingly the departments in the mountains and in coastal areas lead in the ranking of the first 15 departments in terms of number of beds in tourist residences. In the departments offering the most beds in residences, we find the alpine departments (Savoie, Haute Savoie, Hautes-Alpes) and those on the Mediterranean (Var, Alpes-Maritimes, Hérault), historically the departments for France’s residence market. graph

 

Growth on the Atlantic Coast is down overall.


Coastal departments, located on the west coast (Gironde, Landes, Loire Atlantique; Charentes Maritimes, Vendée) represent an important share of the residence market in France, of 12% in terms of beds. Two of these departments on the Atlantic coast are among the top 15 in terms of largest bed supply: Gironde and Landes.

Nonetheless, these departments on the West Coast post differences in growth. While many of Brittany’s departments are growing - Loire Atlantique, Finistère, Ille-et-Vilaine - two have recorded negative growth rates: Morbihan and Côtes d’Armor. Most of the departments in the northern part of the west coast - Calvados, Somme, Pas-de-Calais and Manche - have negative growth rates, except for the Seine Maritime. Most of these departments on the Atlantic show a decrease in their supply. There is still a supply gap in terms of beds between the north and south of the west coast: while the departments of the south - Gironde, Landes, Pyrénées Atlantiques, Charente-Maritime - have a significant number of beds: 49.5% of the total supply of beds on the Atlantic coast, the departments of the north - Manche, Seine-Maritime, Pas de Calais and Somme - only represent 3.8% of the total supply in terms of beds on the Atlantic coast. Development has been towards «leisure» / «family» products with the creation of larger housing units, as is the case on the Mediterranean coast.

The model of tourist residences, which was first developed from the Mediterranean coast to the Aquitaine coast, continues towards the north of the Atlantic coasts, which until now have been less developed in terms of number of tourist residences. graph

The preponderance of the mountainous and coastal areas in the number of residences created:

Between 2015 and 2017, ten departments concentrated more than half of the beds created through the opening of new properties. There are many mountainous departments (the two Savoyards in the lead, Isère in fourth place, Haut Rhin in fifth, and Alpes Maritimes and Hautes-Alpes in ninth and tenth place) due to numerous openings in mountain resorts. The rest of the openings are mainly located in urban areas.

Development of the supply on a regional scale

Coastal and mountain regions come in at the top of the ranking. Together the Auvergne-Rhône-Alpes, and the Provence-Alpes-Côte d’Azur regions account for 48% of the supply, followed by Occitanie – which includes part of the Mediterranean and the Pyrenees massif – and Nouvelle Aquitaine – which includes the other part of the Pyrenees massif and part of the west coast. Consequently, these four regions that are at once coastal and mountain alone account for 68.3% of the global supply of accommodations in tourist residences in France.

The historic preponderance of the supply of residences in mountain and coastal areas is nonetheless under reconsideration because of the saturation of certain markets in mountain regions and closings of coastal residences. graph

A high number of closings in coastal areas

Some departments on the Mediterranean also report negative growth rates -18.1% for the Gard, -6% for the Var, -4.1% for the Maritime Alps.

The average decline in the number of lodgings along the coast is -2.5%, which can be explained by the massive sale of low capacity residences in the middle and lower end of the market. Most of these residences have been converted into real estate projects, or student or senior housing. As mentioned above, the slowed growth in the number of residences in mountain areas (1.1% growth between 2014/2015 followed by 0.1% growth from 2015 to 2017) seems to indicate a saturation of the market for residences in the mountains. It should be noted that while the number of residences of all types of spaces combined had increased until 2015, it fell by 3.2% from 2015 to 2017. This may be explained by a tendency to close low-capacity residences (less than 100 units per residence), as these residences are not sufficiently profitable for groups. Although it is not as strong, growth in urban areas continues. It can also be noted that the number of residences in urban areas exceeded the number of residences in mountain areas in 2017, but the capacity remains lower.

This growth stagnation appears to particularly affect the low-end residence sector. 

One trend appears to be taking shape in the mountains and in coastal areas, and more generally throughout the rest of the territory: a shift toward the high-end range for residences. Of 57 new classified residences that opened in the mountains in 2016, 41 are upscale residences. In shoreline areas, while there was a major phenomenon of closings of low-end residences, of the 12 new classified residences opened, 9 are upscale properties. The same trend may be observed in rural and urban areas.

Continues here

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