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Monaco: the Rock perseveres

Like many prestige destinations, Monaco suffered from the collapse of the MICE segment in 2009. “The glamour of Monaco is not in tune with the times,” recognizes Michel Sabot, Director operations for SBM Monte Carlo. Meeting in the midst of financial and social turbulence in a city where the hotel supply consists almost exclusively of 4* and 5* properties could have been considered - at best - in poor taste. “The American incentives market was hit hard, as was the British market due to the weak Pound Sterling. On the Corporate market, the length of stay shrank by 2.7 days to 1.4 days for group whose size had been halved,” regrets Xavier Rugeroni, General Manager Fairmont Monaco and Regional VP Europe for the Canadian group.Monaco thus plans to .rmly remain a prime destination for exceptional tourism. “Our strengths have been the same for 150 years: the casino, magni.cent hotels and a variety of exceptional events”. In this regard, the principality is preparing to celebrate the centenary of Diaghilev's Ballets Russes next year, which will be a prelude to other festivities: the 10th anniversary of the Forum Grimaldi, the 35th circus festival, 100th anniversary of the Museum of Oceanography and then the splendorous celebration of the principality's 150th anniversary.The impact is evident in hotel results. On twelve months rolling, the RevPAR in the principality dropped by 19.5% with - 7.7 pts OR and - 82% for average daily rates. On the month of October alone, the drop in the RevPAR was by 16.7%. And yet, Monegasque hoteliers are not sunk in des-pair. “Compared to other destinations, we're not doing too badly,” remarks Michel Bouquier, President Monaco Government Tourist and Convention Authority. This is because the principality was able to partly compensate for this temporary weakness by using its primary weapon: individual tourism. “This segment that represented 78% of nights is now at 85%,” underlines Michel Bouquier.The strength of Monaco's tourism lies in the parceling of its leisure clientele and its limited dependence on key markets of France, the United Kingdom and Italy. In order to compensate for absences, hoteliers tried to diversify their sources of clientele by addressing emerging markets “that are burgeoning,” according to Michel Sabot or towards Northern Europe where this sunny destination is greatly appreciated in summer and winter alike. Xavier Rugeroni, General Manager Fairmont Monaco and Regional VP Europe for the Canadian group, adopted a tactic based on proximity: “we went hunting on European markets such as Germany, Switzerland and Austria.”The flipside: seducing clienteles required a certain amount of effort in terms of room rates. “Individual clientele is up thanks to our tactical offers via Internet,” remarks Xavier Rugeroni. “The average daily rate held up at the Hôtel de Paris and the Hermitage, but less so at the Monte Carlo Bay which is a modern hotel that attracts younger clientele, who are more reactive to promotions,” explains Michel Sabot. As beneficial as it may be in terms of boosting occupancy, this strategy should have an impact in the mid term on the average daily rate of hotels. “We will not make up for this very quickly,” admits Xavier Rugeroni. “It is difficult to tell a client that after offering 10% off you're going to increase prices by 20%.”Monaco's results should continue to be affected by the current trend for some time now. “2011 will remain difficult on the MICE segment,” admits Michel Bouquier, “but the segment should regain its health from 2012. We receive many demands.” The situation is not so black and, among the reasons for hope, Monegasque tourism may count on cruises, a segment that should grow by 40% in 2010. Monaco will in fact become a cruise terminal for Costa and Norwegian Cruise cruise lines, this is advantageous for the hotel industry since this position “generates two nights per passenger,” explains Michel Bouquier.Despite the crisis, tourist authorities are proving to be voluntaristic as indicated by the planning for 2009/2013. This five-year strategy places the accent on several developments: communications via Internet, low season tourism developed around a consequential spa offer and the valorization of Monaco Meetings and Incentive products. Monaco also targets emerging markets through the Monaco Private Label with road shows worldwide organized for select clientele who may benefit from unique offers during their stays such as the privatization of luxury boutiques or the table d'hôtes in the kitchen of Alain Ducasse's restaurant Louis XV.

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