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January 2018: France's hotel industry starts the year on the right foot

After a successful year 2017 characterized by an occupancy rate of 67.6% and a RevPAR up +4.9% year-to-date, the French hotel industry is off to a good start for continuing on this trajectory. In January 2018, the sector reports steady growth in the RevPAR by +3.9% in France, across all categories.

There is no real need for the French hotel industry to adopt any famous New Year’s Resolutions further to an exemplary year 2017. After presenting impressive figures in January 2017 with double-digit growth in RevPAR (+11.3%), it is difficult to repeat such a performance. The chain and independent hotel business in France nonetheless forecasts a RevPAR up +3.9% due to growth on each segment in terms of occupancy rate, average prices and RevPAR. The budget segment posted the best growth in RevPAR (+4.9%) thanks to an increase in the occupancy rate by +1.3 points and average daily rates up +2.3% compared to 2017. The category thus saw its occupancy rate increase from 53.7% to 55.0% and the average daily rate grow from 41.9 to 42.8 euros. The upscale segment achieved growth in its RevPAR by +4.1%, mainly due to the 2.7% increase in average daily rates. Its occupancy rate is the highest (60.4%) across all categories. The economy and midscale segments are also growing. With its RevPAR up +2.8%, the economy segment is supported by an increase in its occupancy rate by 1.2 points to 54.9%, and secondarily by average daily rates up +0.5%. The midscale segment posted an occupancy rate of 56.9%, up +1.1 points and average daily rates up +1.7%.

Global RevPAR is driven by the dynamism of Paris and its region. In fact, the Île-de-France region asserted its position with RevPAR growth by +7.0% and by +5.5% in the capital. The Île-de-France region relies on joint progression of the two indicators: +2.6 points for the occupancy rate, rising from 61.7% to 64.3% between January 2017 and January 2018, as well as average daily rates up by +2.7%. The region benefited from good performance on all segments, although the budget segment stands out with +9.8% growth in RevPAR thanks to an occupancy rate of 68.6%, up +3.2 points and an increase in average daily rates by +4.6%. Results for Parisian hotels were driven more by the increase in average daily rates (+4.6%) that rose from 143.9 to 150.5 euros than by the increase in occupancy rate (+0.6 points). The city nevertheless has the highest occupancy rate (71.3%) of the regions studied. Paris outperformed the economy and mid-range segment with respectively +6.0% and +7.4% in RevPAR. On the upscale segment the increase in average daily rates by +4.7% made up for the slight drop in occupancy rate: -0.8 points. Meanwhile, less remarkable but still positive progress was also reported in the provinces with a RevPAR up 1.7% due to slight increases in occupancy rate (+0.8 points) and average daily rates (+0.1%).

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