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May 2009: a constant, but relatively controlled drop

With a new drop in the RevPAR by 11.3 % on average nationally, the month of May falls -unfortunately – right in line with the previous months, or even below the average of the first five months of the year (-9.6%). The calendar has not helped leisure hoteliers. May 2009 was not comparable in its business structure to May 2008. Last year, the combination of May 8 and Whit Monday, which are both holidays in France, resulted in a long weekend for tourists that began on a Wednesday while this year Whit Monday was in June. And yet, fewer days without work or comp time is good for cities that have high levels of Business tourism. But this potential advantage was largely cut short by the effects of the crisis. The drop in business activity is significant in all hotel categories (-3.7 to –9.6 pts OR). While economy categories are able to control their distribution channels to improve their average daily rates, the 3* and 4* categories enter a price lowering and promotions strategy that causes the RevPAR to drop further. Nonetheless, the differences in average daily rates from one category to the next persevere, a sign that there is no extreme cannibalization from one segment to the next.

The difference in change in RevPAR in the Paris region and the rest of France is close to 10 points. The 3 and 4* categories must make certain efforts regarding their average daily rates as business and leisure guests are increasingly attentive to spending. As a foreseeable consequence, Paris has seen its RevPAR drop by –15.5%. Nonetheless, despite a significant drop (-5.4 pts), it must be observed that Paris’s hotel industry is succeeding in maintaining a high level of business. Global occupancy is higher than 78% and closes in on 75% for 4*. The provinces continued to dampen the effect of the crisis in May, but less vigorously. Its average daily rate remains prac-tically stable with respect to 2009 (- 0.2%), for lower resistance than on the last five months (+2.1%). The calendar was less favorable to tourist destinations while business centers were also unable to benefit from it because of the slow economic situation. Along with Toulouse and Paris, Nice is one of last month’s major losers. The Festival de Cannes did not have the usual benefic effect on Nice. The business it generated did not over-flow out of the region. In the North, however, there seems to be some clearing in the storm. Lille, thanks to a busy convention calendar and the leisure tourism operation Europe XXL, has been busy since the beginning of the year.

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