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September 2018: the French hotel industry is swinging with good results

The organisation of events on an international scale and an improved business climate have helped the French hotel industry report strong growth in results in September.

In France overall, the occupancy rate increased by 1.4 points compared to September of the previous year. This increase is driven by all segments except the budget segment, which contracted by 0.6 points. The top-of-the-range segment is the only one to cross the 80% mark, reaching 83.3%. Prices jumped in all segments and overall they rose by 8.9%.

These movements led to a 10.9% increase in RevPAR in the territory. The mid- and high-end segments are the real drivers of this growth, with ORs up by more than 2 points and ADRs each reaching almost 10% growth.

Business clientele set the pace

The French hotel industry thus benefits from a business climate that is improving: thus, according to Insee, the confidence of business leaders is improving. Another, even more important fact regarding reception for foreign business clientele, the French territory has gained in appeal with respect to German investors: according to a study increasing numbers of German firms would like to invest in France. In 2016, only 41% of German companies questioned estimated that the economic situation was good, in 2018, that number has grown to 90% .

Paris leads the dance

The capital and its region have unparalleled hotel performances.

Occupancy rates for Paris Intramuros are close to 90% (89.4%); they are higher in London (88.6%), Amsterdam (88.4%) and Vienna (87.6%) but lower in Berlin (89.9%), Lisbon (92.0%), and Budapest (92.4%). An improving business climate in France and a favourable economic situation in Europe have enabled the capital to make a successful comeback with a 20.5% increase in RevPAR driven by a 17.2% increase in ADR to €209.6 excluding tax. 

At the end of the month during fashion week, the international golf tournament was organised: the Ryder Cup. This event in Saint Quentin (south of Versailles) attracted more than 150,000 visitors and enabled the hotels surrounding the golf course to record spectacular performances.

For more details, read our article: The Ryder Cup, a successful event for hoteliers

Thus, the accumulation of these two international events has greatly benefited the city's hoteliers Intramuros and those of its agglomeration. The latter saw its OR increase by 4 points compared to last year and its ADR jump by 15.4%, strongly impacting its RevPAR (+20.9%) which reached 128.7 € excluding tax.

Other metropolises keep step

Some cities are seeing their OR and ADR increase, a sign of the economic dynamism of local businesses. Grenoble has seen its RevPAR grow by 5.9% and Lyon by 6.2%. In Nantes, where the digital sector is developing on the island of Beaulieu, the city has seen an increase in its ADR since the beginning of the year (+6.3% in Year to date), leading to record RevPAR levels.

Despite a decrease in their OR, other cities are also taking advantage of the start of the school year to increase their PM. Thus, Toulouse saw its prices increase by 3.3%, Bordeaux and Rennes by 3.6%. Cannes, which organised its boat show (50,000 visitors, more than 50% of whom come from abroad), has seen its ADR exceed the 200 € (excl. tax) — up by +8.8%.

On the other hand, Strasbourg and Lille have seen their RevPARs decrease. The Northern city was impacted by the mixed performance of its sell-off: in particular, it experienced a drop in its ADR with respect to the previous year.

For more details, read our article: Was the braderie de Lille 2018 such as great edition?

After a brilliant summer thanks to the return of holiday goers to France, hoteliers enjoy an improved business climate achieve good performance in September. If this trend continues until the end of the year, 2018 could be a successful year for the French hotel industry.

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