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September 2017: a successful fall season for France's hotel industry

All indicators are on the rise, across all segments, for this month of September 2017 which conjures fears of the beginning of the year. While Paris continues on a steady rebound, as it has for several months, the provinces and some major cities in particular have set into fall with a smile.

August had set the tone: the French hotel industry is back to good results and continues to report improving performances as it gradually turns the page after a difficult season. Renewed confidence further to tourism announcements (obtaining the 2024 Olympic Games) and an  improved European economic context  is undoubtedly a factor in this.

The month of September is therefore a success: RevPAR was up 6% compared to the same date last year, driven by the increase in occupancy rate. In fact, the latter increased by 3.7 percentage points, indicating higher demand. Average daily rates are also on the rise, although very slightly, with +1% increase. The overall picture is therefore very satisfactory, especially since occupancy rates were the driving force behind the increase recorded year-to-date (+3.3 pts).

All segments are experiencing increases, with some variations of course. The strongest increase in RevPAR was recorded on the Budget segment, which posted an increase by more than 8%! The provinces, where this segment is concentrated, have performed rather well, which is all the more noteworthy given that both occupancy rate and average daily rate are stable. The mid-range and economy segments run neck in neck, with similar performances in terms of evolution. The slightly higher price increase for the mid-scale segment nevertheless gives it a very short lead (+6.3%) in RevPAR compared to the economy segment (+6.2%). Finally, the upmarket segment, while also performing well thanks to an increase in ADR (+1.9%), remained slightly below the other segments (+5.5% in RevPAR).

While the global trend is on the rise, not all cities share the same fate. Lille, Nice and Strasbourg experienced the most significant increases in RevPAR over the month, although the first only conjures up a difficult year (-6.1% of RevPAR YTD). Paris continued to grow, driven by an increase in occupancy rate (+4.5 pts) but also by higher average daily rates (+2.4%). All major cities saw their performance driven primarily by the rise in the OR, with the notable exception of Montpellier, where results fell in the month as well as since the beginning of the year.

In conclusion, September was an opportunity for the continuation of the good trend recorded in August to continue. The hotel business picked up again and once again producing good performances, driven by the occupancy rate. While prices were still slightly down over the first 9 months of the year (-1.3% overall), the trend lessened over the months. The RevPAR continues to be driven by the rise in OR, a sign of a healthy recovery in demand. The outlook for the end of the year is thus favorable.

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