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2015 in France: Has the residence market reached an age of reason?

On January 1, 2015, the tourism residence supply in France had 2,309 properties for a total of 179,600 accommodations and more than 730,000 beds. Overall rapid growth in the supply of residences between 2007 and 2015, by an average annual rate of more than 7% in terms of accommodations, slowed in 2013 and 2014, suggesting a new development phase for the market involving more reasonable growth and consolidation.

More moderate growth in supply

After 2.6% growth in the number of accommodations and 1.9% in the number of beds in 2013, or more than 4,400 accommodations and 13,500 additional beds, the tourism residence supply increased by 1.3% and 1.1% in 2014, meaning growth by close to 2,300 rooms and 7,800 beds. This deceleration in supply growth is evident in all types of locations: leisure destinations (coastal, mountain, rural), traditional locations for residences, as well as urban destinations. The latter continues to have the strongest growth, due to recent development. Average annual growth in the city is thus greater than 10% between 2007 and 2015, while it is less than 2.5% in coastal areas and mountains. Thus the number of accommodations in cities on this period grew by 144%, versus 22% in coastal areas and 15% in the mountains. This increase made it possible to rebalance the supply between the different types of destinations: in 2013 the number of residence accommodations in urban locations bacame higher than in the mountains, and this trend was confirmed in 2014. On January 1, 2015, urban accommodations accounted for 29% of accommodations, versus 27% in the mountains and 31% in coastal areas. While the supply in rural locations remains lower, the opening of major complexes on the period made it possible to post growth in its supply by 125% between 2007 and 2015.

The Alps and the Mediterranean coastline remain the most developed markets

Coastal and mountain destinations remain first in terms of number of beds in residences, due to a larger average size of accommodations than in urban destinations. French towns with the biggest capacity in terms of residences are thus ski resorts, where the supply is the most developed (read our article on mountain tourism). On January 1, 2015, the top departments remain in the Alps (Savoy, Upper Savoy, Hautes-Alpes) as well as on the Mediterranean coast (Maritime Alps, Var, Bouches-du-Rhône, Hérault). These departments are also the ones where there were the most openings of properties in terms of volume in 2013 and 2014, with the Hérault in the lead. Other top 10 departments in terms of number of beds may be found the Gironde and the Landes on the Atlantic Coast. The northern part of this area (Loire Atlantique, Brittany and Normandy) represent a space where the supply of residences has grown particularly since 2013, with the supply being less developed until now.

New openings are concentrated in cities and mostly done by groups

Nonetheless, of the accommodations created between January 1, 2013 and 2015, more than half are in cities. As a comparison, the coastal area has one quarter of net creations while 12% are in the mountains. In 2013 and 2014, the supply grew further in major agglomerations such as Lyon or Strasbourg. A new trend has also been gaining strength in the last two years and corresponds to the arrival of residences in the secondary agglomerations in the provinces. Properties opened in cities where there previously had been no residences, such as Arles, Troyes, Angers, Agen, Niort. Others are established in communities located on the outskirts of large agglomerations, such as in Juvignac near Montpellier. Finally, cities where the first openings occurred only recently, are seeing their supply grow with a second or third property, as in the case of Reims or Perpignan.

Ranking of operators: a new leader on the urban market

The residence market is already structured around chain operators, and groups were the growth motor of the supply in 2013 and 2014: thus, of the 30,700 beds created on the period, more than 90% belong to groups. Growth is expected to continue: Pierre & Vacances, the leading French residence group, will inaugurate in summer 2015 the Domaine du Bois aux Daims, its fifth Center Parcs in France located in the Vienne. It will add 800 accommodations to the department with 4,000 additional beds or more than 2.5 times the current supply in the Vienne.

In the same way in 2016 the opening of the Village Nature out of an agreement between Pierre&Vacances Center Parcs and Eurodisney SCA will increase the supply in the Seine-et-Marne by 1,730 new accommodations. Odalys is the second French operator of residences, with around 15 openings. It concentrates on traditional seaside and mountain destinations, although it has also created residences in Strasbourg and Lyon. The merge in 2014 of the groups Menguy Investissement and Equalliance, and their respective brands Appart’City and Park & Suites, have caused the new group to leap to first place in the ranking of residence operators in cities in France, and to third position in the global ranking. In the last two years the two brands opened the biggest number of properties and beds in France, with the creation of twenty or so properties representing 28% of accommodations and 20% of beds created during the period. The latter are mostly concentrated in secondary cities in the provinces.
The residence market thus appears to have reached a more reasoned stage in its development, with more moderate annual growth in the supply and a reorientation of development toward the most promising territories (especially urban), and a growing concentration of players.

Find detailed supply data, openings in 2013-2014 and 2014-2015 and the ranking of the primary operators for 2015 by type of location, in the MKG survey “Les résidences de tourisme en France. Edition 2015” to be published soon.

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