After lagging behind the Province for a long time, the first signs of a recovery are being felt among the French capital's hotels. Of course, the drop in activity relative to the pre-COVID period remains strong: Paris has not yet become Paris again. But is the haemorrhage on the way out?
Since the beginning of the health crisis, major cities and especially Paris have been the most affected destinations in terms of loss of hotel activity. They have also taken longer to recover, whether in terms of hotel performance or hotel opening rates. Some of them, especially the most upmarket ones, have remained closed longer than their provincial counterparts.
But in September and early October, when 95% of the hotels were open, the first signs of a (timid) recovery in activity seemed to be felt.
RevPAR (revenue per available room, based on all rooms built) increased progressively week-on-week from €77.5 excluding VAT in week 36 ( 6-12 September 2021) to €127.1 excluding VAT in week 40 (4-10 October 2021).
The gradual increase in Parisian RevPAR in September and October, relative to the summer, is a usual dynamic linked to the recovery of business tourism after its summer break, as illustrated by the 2019 data. But this year, unlike 2020, RevPAR has been narrowing each week the gap with its pre-crisis level. RevPAR in week 36 of 2021 was 55% lower than the equivalent week in 2019. This decline was reduced to -48% in week 37, then -49% , -43% and finally -30% in week 40.
If weekday nights (from Monday to Thursday evening) and weekend nights (from Friday to Sunday evening) are considered separately, this increase in RevPAR is visible in both periods. The decrease in RevPAR compared to 2019 went from -61% on weekdays in S36 to -38% in week 40. For nights on weekend days, this decrease went from -50% to -15%.
Although both weekday and weekend performances have improved, weekday RevPAR, and therefore business visitor demand, still lags behind the recovery in leisure demand, which is already stronger.
In 2019 and in the usual pre-crisis scenario, weekday RevPAR in Paris (€194.7 excluding VAT) was higher than weekend RevPAR in Paris (€165.2 excluding VAT). In September and early October 2021, this more vigorous recovery in leisure tourism relative to business tourism has changed the situation: weekend activity (€104.2 excluding VAT of RevPAR) is even slightly higher than weekday activity (€103.2 excluding VAT). Weekday RevPAR also recorded a relatively greater drop than weekend RevPAR (-47% compared to -37%).
The Paris hotel industry seems to be waking up (at last), even if it is still a difficult morning. But it is rather due to the renewed appeal of the French capital to leisure visitors, who are on the road again, while business visitors are still only visiting sparingly. The next few weeks will therefore be key in determining whether or not this recovery is sustainable.
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