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France: New life for the hotel industry in the Spring season

After a lackluster month of March due to a drop in OR, the month of April places the French hotel industry back on the tracks of the hospitality cycle.

As during the growth phases of previous cycles, the French market recuperates the stabilizing role of its economy supply in Province and the driving role of Paris’s upmarket hospitality segment. With more than 9% growth in the RevPAR, overall activity of the French hotel industry in April is more in line with the recovery. This time, the shift in the academic calendar was more favorable and the strength of the upscale hospitality market is a satisfactory element. And yet, it must be recalled that if the 9% figure seems strong, in April 2010, a month of comparison, the recovery was still slow (+1% over April 2009). Between 2011 and 2010, there was an effect of communicating vessels between March and April that was reversed. While growth in the occupancy rate was relatively slow, with exception to the upscale, there has been clear improvement in average daily rates, just right for supporting growth in the RevPAR. Variations in indicators in the economy categories are decidedly more limited than those for higher categories. It is the presence of upscale business clientele in major cities that generates the rapid rise of the hotel cycle. As for major cities, France has a second unstable point with the enormous weight of the Paris region as an international gateway. During professional exhibitions, the French Riviera and Rhône-Alps regions offset the power of Paris, but for only part of the year. We can only congratulate ourselves on the brilliant results of Paris’s upscale segments in April, but they do not hide this real imbalance. Perspectives for the months to come are good, considering a calendar that benefits from major international events, starting with the G8 in Deauville. The first four months of hotel activity in France (+6.9%) are within the forecast range provided by MKG Hospitality last January.

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