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Analyses

August: the light at the end of the tunnel?

“Average is down, but it could have been worse.” This is what one might read on the report card for French hoteliers. In a difficult context, August ended a summer impacted by the economic crisis less catastrophically than expected. The 7.0% drop in the RevPAR is even less signi.cant than the previous month (-7.3%). Domestic clientele, largely made up of August vacationers, supported business. Occupancy showed a 3.3 pts drop versus -5.1 pts last July. Nonetheless, the absence of the highest spending clientele - British, Americans as well as Middle Easterners who left early because of Ramadan - pulled down the average daily rate. The 4* segment fell by -11.8%, leading to a drop by -2.4% across all categories. While many tourists revised their vacation budget downward causing clientele to migrate away from classic hotels towards rentals and from rentals to “hôtellerie de plein air” meaning campgrounds, not everyone has abandoned the idea of the pleasure of a certain amount of comfort. The star of the summer will have incontestably been the midscale category, which was down by “merely” 2.1% versus 6.2% over the previous twelve months.

The trend in favor of urban tourism observed in recent years was less evident in August 2009, in Paris at least. The room revenue in the capital shows a distinct 15.5% drop. Paris's palaces were expecting a sharp downturn after mid-August with the early departure of Middle Eastern clientele due to Ramadan. This fear was not unfounded, and made a noteworthy impact on average rates. The RevPAR of the 4* segment dove by over 20%. But, with a loss of 5.7 pts on its OR, Paris's economy category is not celebrating either. Its RevPAR dove by 7.7%. The opportunistic strategy of 3* (-5.0%) on the other hand allowed the segment to pursue its course with a RevPAR up by 3.7%. Inversely, with a drop in the RevPAR by 3.5%, the provinces show some of the best results in a difficult year. Its upscale hotel segment is, like in Paris, on a downtrend due to the loss of profitable clientele such as, for example, the British. But the other segments that have the favor of domestic clientele have held strong. The 3* segment is reproducing a month identical to last year's (-0.3%) whereas the economy segment is down -2.8%, which is decidedly better than the first month of the summer season that rang in at -6.2%.

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