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August 2019: Île-de-France and Paris still in slow motion

The French hotel industry continues to stagnate during this second month of the summer school holidays. The capital and Île-de-France continued to decline, while the rest of France's regions pursued their uptrend.

Across all regions and segments, the monthly occupancy rate (OR) increased by 0.4 percentage points in France. Only the average daily rate (ADR) shows a real increase, up by +2.2%, to €96.40 ex-VAT, allowing revenue per available room (RevPAR) to increase by +2.9% to €69.70 ex-VAT.

The Budget segment is driving the growth of the French hotel industry this month, with occupancy up 1.6 points compared to August 2018 causing the OR to increase from 69.8% to 71.4% in August 2019. The Budget segment is just catching up with the other segments, which have roughly equivalent ORs: 70.7% for Economy (+0.5 pt), 72.7% for  Midscale (-0.6 pt) and 76.1% for Upscale (+0.0 pt).

As far as average daily rates are concerned, all segments are progressing: ADR for Budget was up to €48.60 ex-VAT (+1.7%), the Economy to €65.00 ex-VAT (+2.0%), the Midscale to €99.70 ex-VAT (+3.6% - the best ADR progression of the month) and the Upscale to €226.10 ex-VAT (+2.6%). Fairly similar growth for  RevPARs could be observed: +4.0% for the Budget segment (best RevPAR evolution for August), +2.8% for the Economy, +2.8% for the Midscale, and +2.7% for the Upscale.

As in July, French regions posted the only positive change in OR in August: +1.0 percentage point, for an average OR of 73.6%, compared with 76.5% (-0.7 pt) for Paris and 64.3% (-0.7 pt) for Île-de-France (IDF) excluding Paris. As far as average daily rates are concerned, the situation is more varied, although all  ADRs are following a positive trajectory. IDF (excluding Paris) and the other regions of France increased their ADR by +2.0% and +2.9% respectively, while in Paris rates tended to stagnate (+0.6%). Finally,  results in terms of revenue per available room are more clear-cut. In the provinces, it rose by +4.3% to €69.70 ex-VAT, while in Paris and IDF it remained stable (+0.1%) for an estimated €69.50 ex-VAT, or €0.20 lower than the regional hotel sector.

From a more detailed perspective, the segment that had the most success in terms of occupancy across all regions and departments of France combined (including Paris) is the Budget segment in the Ile-de-France region which grew by +2.2 percentage points to reach an average of 64.8%. Its ADR remained virtually unchanged (+0.6% for €46.70 ex-VAT), while its RevPAR recorded one of the best increases for the month by +4.1% to reach €30.30 ex-VAT.

The best growth in terms of RevPAR, meanwhile, could be observed in the regional Upscale segment, with a +5.5% increase, from €208.90 ex-VAT in August 2018 to €220.30 ex-VAT in August 2019, thanks to an ADR that increased by +4.7%. Occupancy is positively neutral at +0.5 points but posts the best monthly OR across all French regions (ex-Paris and IDF) at 78.8%. The other segments in the provinces achieved similar results: +4.2% RevPAR (€77.40 ex-VAT ) and +0.6 pts OR (74.3%) for  Midscale, +3.2% (€48.10 ex-VAT) and +1.1 pts (71.5%) for  Economy and +3.9% (€36.10 ex-VAT ) and +1.4 pts (73.4%) for  Budget.

August 2019 performance in France is mainly driven by the Budget segment in the Paris region (Île-de-France and Paris combined), which is gaining new market shares, as well as by the Upscale segment in the French provinces. The latter increased their room rates while achieving an occupancy rate of 75% for available rooms.


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