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December 2019: Flat results despite nationwide disruptions

France reached a positively neutral balance sheet, despite the longest transport strike in the country. All the indicators are in the green in this last month of the year.

The occupancy rate (OR)  gained +0.5 points compared to the same period last year, to climb to a national average occupancy of 57.5%. Average daily rates (ADR) are also up slightly (+1.4%) to €90.50 excluding VAT, leading to an increase in revenue per available room (RevPAR) of +2.3% to €52.10 excluding VAT.

Once again, the upscale segment is driving earnings up, but this month it is not alone: the budget segment is there to accompany it in this positive dynamic. The upscale segment thus gained 1.7 points in occupancy in December (OR 62.3%) and the budget segment gained 1.3 points (OR 56.9%). Conversely, the economy (OR 56.3%) and midscale (OR 57.1%) segments lost market share, each by -0.2 points.

Regarding average daily rate, all segments are raising their prices. Only the midscale hotel sector has lowered its ADR by 0.1% (€101.40 excluding VAT), leading to a decrease in RevPAR of -0.5% (€57.80 excluding VAT). On the contrary, the budget sector is experiencing the strongest price growth: +2.8% in ADR (€46.60 excluding VAT) for a RevPAR that is evolving at a significant rate of +5.3% (€26.50 excluding VAT).

In absolute figures, these performances are on the whole relatively weak compared to previous months. For example, November had an average OR of 66.0%, almost 10 points above the OR of December (57.5%). The reason why these rather low performances are only slightly noticeable is also to be linked to a very low comparison: December 2018 was also very disrupted, in particular due to the "Gilets Jaunes", or Yellow Jackets, crisis, leading to an OR of 57.6%, down -0.5 points.

It is also interesting to note that on a year-on-year basis (Year-To-Date results - YTD), the upscale hotel segment was, on the contrary, the only segment to have declined in occupancy (OR 73.7%, down -0.4 pt), following the example of December of the previous year, when it was the segment to have suffered most from the crisis, with a -1.3 point decline at the national level. All the others are in the green in December 2019 (YTD): Budget (OR 66.8%, +0.3 pts), Eco (68.4%, +0.2 pts) and Midscale (69.7%, +0.1 pt).

All regions are up this month. The record was set in Ile-de-France (IDF - excluding Paris), with a net gain of +1.0 point of occupancy for an OR of 66.1%. This increase is slightly less "fast" if Paris is included: +0.8 pt; on the other hand, OR is better: 68.1%. Paris alone continues to post the best national occupancy (OR 70.9%), even if the market stagnated in December (+0.5 pt).

The Province, heavily impacted by the strike phenomenon, slowed its growth compared to the previous month, reaching a OR of 52.2%. The regions (excluding IDF) thus experienced the lowest evolution of the panel (+0.3 pts), whereas in November (+0.3 pts) or October (+0.6 pts), they instead pulled the country's results upwards. In a way, the dynamics are reversed in this last month of the year.

Paris has the only average daily rate that falls (-0.2%), while posting the best result in absolute figures (€155.20 excluding VAT); its RevPAR's evolution nevertheless managed to remain positive (+0.5%) at €110.00 excluding VAT. On the other hand, the Paris region has seen the highest increase in ADR (+3.6%, €79.70 excluding VAT), with RevPAR up sharply (+5.2%, €52.70 excluding VAT). As for the provinces, the ADR maintains slight growth (+1.8%, €76.40 excl. VAT) as does its RevPAR (+2.5%, €39.90 excl. VAT).

As for the YTD, only the provinces hold steady (OR +0.7 pt, 65.2%). Paris (OR -0.5 pt, 80.8%) and especially Île-de-France (-1.1 pt, 73.2%) are experiencing market losses. Nevertheless, all prices are rising, so RevPAR is positive. The provinces are the only market to record RevPAR with an increase stronger than the national average (+1.7%, €65.10 excl. VAT), which is +3.1% (€50.90 excl. VAT).

As in November, Paris's upscale segment still performed well in December, unlike the other segments, with a gain of +4.9 points in occupancy to end up with an OR of 68.9%. Rates are nevertheless pulled down (-0.2%, €233.80 excluding VAT), which does not prevent RevPAR from rising by +7.5% (€161.10 excluding VAT). It should be noted that, across the year, this was the only segment in which RevPAR in Paris declined (YTD -1.0%, €196.30 excluding VAT), proof that this hotel business was the most sensitive to the various incidents of the year (the "Gilets Jaunes" at the beginning of the year, strike in December, etc.).

In the rest of the Paris Region, results were up, thanks in particular to the lower segments. Thus the budget gained good market share (+3.1 pts) for an OR raise up to 70.2%, a viral growth that affected both the ADR (+4.2%) but also, and above all, the RevPAR (+8.9%). Proof of a long-term dynamic, this is also measured over the entire twelve months (YTD results): the only OR with a neutral evolution in the Paris Region (-0.5 pt), the strongest evolution in ADR (+4.1%) and RevPAR (+3.3%) in the region (excluding Paris).

In the region, all segments are in the green, except for the Economy which is in very slight decline (-0.1 point), a decline that is not even noticeable over the whole year, since in YTD, the OR gains +0.7 points. The budget, the midscale and the upscale segments are experiencing neutral OR trends of +0.7 pts, +0.6 pts and +0.0 pt respectively. On the other hand, all prices increased, so all segments saw RevPAR rise: budget +3.7% (record for the Province), Eco +0.7%, midscale +2.8% and upscale +2.5%.

Some regional cities had a good month of December. To begin with, Nice outperformed this month, with the only RevPAR change that came close to double digits: +9.2% - the best growth of the indicator in the entire panel this month. This result was mainly driven by occupancy, up +3.4 points (OR 47.6%). A scientific congress at the beginning of the month (the French Congress of Psychiatry from December 4 to 7), a concert by a famous French singer (Zazie) on December 19 at the Nice Acropolis Convention Center and the end-of-year festivities convinced tourists to choose the Côte d'Azur metropolis as their destination in December.

Lyon is not to be outdone. The city managed to capitalize on its annual event, the Festival of Lights, to increase occupancy (+0.6 pts) and raise prices (+3.1%), for a RevPAR up +4.2% (€57.70 excl. VAT).

Finally, Bordeaux is also seeing a strong surge in RevPAR: +5.7%. The city on the Atlantic Coast has gained market share in this month of end-of-year festivities (OR +2.1 points) and raised its prices (+1.8%), despite the episode of strikes.

 

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