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Lyon bears its claws

From the height of its five competitive centres, Lyon is an indisputable economic center that continues to rise in power. Far from resting on its laurels, the city has entered a phase for remodeling its urban space, and it also has an ambition to become a first rate leisure destination. But for the hotel industry, this means new challenges...

That’s called having –- nearly – all the right cards. As the motor for the Rhône-Alpes Region, Lyon constitutes the second economic centre after the Ile-de- France with more than 10% of the GNP. With large groups and many leading edge smallmedium sized companies and industry, the city plays host to a traditionally high volume of business clientele. It enjoys an international reputation in textiles, mechanics, chemistry and health/pharmaceuticals (particularly with the presence of the giant Aventis). It’s economic fabric and privileged location at the crossroads of Europe support it in developing congress, trade fair and other exhibition activities. And it is particularly well equipped when it comes to exhibition space: Euroexpo, with its 104,000 sq.m in 12 modular halls, or the Halle Tony Garnier which seats 17,000, as well as the Centre des Congrès whose capacity was recently tripled. The capital of the Gauls is making every effort possible to further boost this aspect, and its success is measurable: the number of conventions grew by more than 70% between 2004 and 2005. International events grew by 63% since 2004, growing from 30 to 49 congresses organized in 2005. Each year, nearly 300,000 nights are generated directly thanks to these events. Consequence: the Centre des Congrès (which hosts 300 events each year) realized an ambitious expansion project that is the result of three years of works and 151 million euros of investment. Linked to the Cité internationale, the Centre’s new amphitheater, inaugurated last June, can seat more than 3,200.It is true, Lyon is increasingly appealing and has been elected "the city with the best quality of life in France” in a survey by the weekly Le Point based on 86 objective indexes: economic dynamics, geographic location, between Northern and Southern Europe, proximity to the Alps and the Mediterranean, first rate airport, highway and rail connections, a broad culture offering, quality education… In the years to come, Lyon has two challenges to meet: preserve a human dimension despite rapid development in order to sustain its difference from the Capital, and acquire a hotel supply that is able to absorb the increase in demand for accommodations from both the Leisure and Business sectors.Lyon’s accommodations are a direct consequence of its status as a business city. With 98 hotels for 6,500 rooms, according to MKG Consulting’s figures, Lyon’s hotel industry represents more than 56% of the accommodations supply in the agglomeration (11,406 rooms in 180 hotels). The 4* segment is well represented (13 properties, 9 are members of a corporate chain). With 13% of Greater Lyon’s hotel supply, the presence of the upscale market is stronger than the national average which is less than 10%. However, it is the economy segment that performs the best. Chains are particularly well represented in Lyon, which may be observed in their penetration rate of 92% versus 64% on average in the rest of the territory. This proves the strong local demand in terms of modern properties which have high standards for quality and do frequent renovations, whence the presence of high capacity hotels such as the Radisson SAS, with 245 rooms, which took the place of Le Méridien at the Part-Dieu or the hotel Hilton Lyon, 200 rooms, at the Cité Internationale...Projects to open new properties have multiplied in recent months to meet the forecasted increase in the number of visitors. This increase will accompany Lyon’s rapid growth on the leisure sector, the intensification of the convention calendar in the region and the development of new urban areas. Among the scheduled newcomers in the inventory there is a hotel Concorde at the Cité Internationale, a 120-room Courtyard by Marriott (in 2009) in the new Lyon Confluence neighborhood, and the implantation of a 250-room highcapacity NH Hoteles in the Saint-Exupéry airport zone.While the region is once again whetting the appetites of developers, the upscale segment is doing the best with a RevPAR up by 8% between 2003 and 2005. Yet, everything is not perfect, not at all. The primacy of business tourism in the city generates a strong seasonal quality marked by peaks in frequency with respect to periods when there are conventions and intense economic activity. March, April, June, September, October and November are by far the strongest months, and often border on the saturation of the 4* supply. But on weekends hotel occupancy drops significantly.To justify the arrival of new rooms in the city, Lyon has taken on extensive projects such as the redevelopment of the Part-Dieu neighborhood, which is the city’s first business neighborhood. It is currently receiving a new “facelift” in keeping with the additional 200,000 sq.m. being built to accommodate new businesses and the 115m Tour Oxygène planned for 2009. Further out, the development of the Bioparc Lyon-Gerland should make it possible to accommodate vast laboratories by the beginning of 2007. Meanwhile, tourism development implies providing services on a par with these ambitions. In this regard Lyon is already fairly well served. First of all it benefits from an efficient highway network that works greatly to its advantage (alpine highways, the highway to the South of France, the Paris-Rhin-Rhône highway) and it is located just 1h30 from Geneva, 3h from Turin, 4h from Paris and 5h from Barcelona...Moreover, traffic continues to grow at two TGV stations (Part-Dieu and Perrache) that place Lyon just 1h30 from Marseille and 2h from Paris. Finally, 25 kilometers east of the city, the Lyon Saint- Exupéry airport is the numberthree French airport in terms of passenger traffic. The development of air traffic is such that it now aspires to second position, with nine million passengers expected in 2010 versus 6.5 today. Saint- Exupéry serves 69 regular connections including 39 international ones, and 34 airlines. Thanks to this airport, Lyon has direct flights to 112 cities. Consequently: the volume of international passengers rose by 15.3% since 2003. And growth does not appear to be over: major growth opportunities for traffic are in the sights, particularly with the United States, Scandinavia and the new members of the Union. The low-cost phenomenon represents another challenge for Lyon as the city has a bit of catching up to do in this area. Low-cost travel represents only 3% of traffic as of yet. That is ten times less than for a neighboring airport like Geneva’s... But here too changes are expected with the current reconversion of one of the terminals, which will soon be entirely dedicated to lowcost companies. More generally, nearly 300 million euros will be invested by 2008 in modernizing and developing the airport...With the addition of the neighborhood of St-Jean to UNESCO’s world heritage list in 1998 (second largest urban site after Prague to receive this honor), Lyon suddenly realized that it had other assets to take advantage of in addition to its economic livelihood. Tourism authorities decided to make leisure clientele one of their priorities as they represent an accessible market that had been underestimated for all too long. The Tourist Office has thus put the emphasis on urban tourism for a few years, making use of both the city’s immense architectural heritage and one of the most dynamic events calendars. It organized a broad array of packages, particularly for weekends and city breaks.The regional capital has relied on two operations for a long time: “Bon week-end à Lyon”, a package that invites visitors to spend two nights for the price of one, and the “Lyon City Card”, a pass that provides unlimited access to the city’s most prestigious museums, as well as to the TCL network (Transports en Commun Lyonnais). Last year, 7,400 Lyon City Cards were sold. The capital of the Gauls came in second among French cities with an active nightlife. And it also comes in second as far as concerns the cultural budget. In recent years, events addressing the general public were developed that receive a great deal of media coverage, making it possible to sell nights in slow periods.Simultaneously, Lyon, the second university center in France, has made its image considerably younger. Each year the electronic music festival “Les Nuits Sonores” attracts a growing blend of curious people and night owls. The same is true for the Dance Biennial, which brings dance outside to combine with the famous “Défilé”, which in just a few years has become one of the biggest danced parades in Europe. And of course there is the famous Fête des Lumières each December 8 that for the past five years has lit up the city’s heritage with increasingly extraordinary illuminations: a veritable institution that brought together three million people last year.But the great urban project, launched since the end of the 90s, is the redevelopment of a vast neighborhood, baptized Lyon Confluence. “All the ambition for the project consists in expanding Lyon’s center to the southernmost point of the peninsula to develop a new neighborhood in the city centre to meet the needs of the agglomeration and the aspirations of contemporary society,” explain city officials. The development concerns an area of 150 hectares located between Place Carnot and the Rhône- Saône confluence. Essentially occupied by industrial activities that are the legacy of the 19th century, the Confluence will be remodeled by playing on a blend of habitat, tertiary, commerce and leisure activities. In the end, the number of residents will grow from 7,000 to 25,000 and the number of jobs from 6,000 to 22,000. The environment is taken into consideration with a 40-hectare park planted with trees. The development of its activities involves the construction of a 120-room hotel (a Courtyard) and the opening of a big science museum in 2007.Another major building site that is sure to reinforce the city’s tourist appeal is the Carré de la Soie. This new, 500-hectare residential neighborhood, that is pleasant and warm, will concentrate on a leisure center that is being created. It will offer a space for life, amusement and culture that will include many restaurants, a multiplex and family-oriented events. Finally the development of the left bank of the Rhône, which is closed to automobile traffic, will make it a haven for promenades and relaxing enlivened by many thematic exhibitions, which should make a significant contribution to attracting leisure clientele.It is true, Lyon is increasingly appealing and has been elected "the city with the best quality of life in France” in a survey by the weekly Le Point based on 86 objective indexes: economic dynamics, geographic location, between Northern and Southern Europe, proximity to the Alps and the Mediterranean, first rate airport, highway and rail connections, a broad culture offering, quality education… In the years to come, Lyon has two challenges to meet: preserve a human dimension despite rapid development in order to sustain its difference from the Capital, and acquire a hotel supply that is able to absorb the increase in demand for accommodations from both the Leisure and Business sectors.

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