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July 2019: the Paris area is ignored; the French regions play their cards right!

Growth slowed down in July throughout France. Paris and the Île-de-France region are the most affected. The other regions attract tourists escaping most cities and urban areas, with a few exceptions, in this first month of summer holidays.

First of all, indicators are stagnant during this month of July in France. The occupancy rate (OR) gained only +0.3 points, the average daily rate (ADR) rose slightly by +1.6% and RevPAR, which had experienced an astounding double-digit increase in June (+10.2%), advanced by "only" +2.0% this month. In other words, growth slowed across France, while there was a major breakthrough the month before.

As mentioned, the capital was particularly affected. Its OR fell by one percentage point, all segments combined, while the RevPAR is up slightly by +0.3% (139.80 € ex-VAT) thanks to an increase in ADR by +1.5%, for an average of 163.40 € ex-VAT. The same situation applies to the Île-de-France (excluding Paris), which showed holiday goers tendency to flee large urban areas: the region lost -2.0 percentage pts in its OR, and thanks to an increase in ADR by +2.7% (77.10 € ex-VAT), its RevPAR stabilized at +0.1% (59.90 € ex-VAT).

A closer look reveals that the agglomeration of Paris (including Paris) is losing ground on all segments, reflected in a -0.7 pt loss in OR. The budget is the only segment with a positive result, however it barely increases by +0.2 pts. The economy (-0.3 pt), midscale (-0.9 pt) and especially upscale (-1.6 pt) segments all lost market share compared to July 2018. In Paris intra-muros, it is the budget segment that suffered the most (OR -2.4 pts).

In the rest of the IDF, almost the entire market is affected, particularly the midscale (-2.6 pts). In each case, ADRs increased to compensate for this loss of customers. It is often the hotels retreating the most that tend to raise their rates the most. For example, Paris's budget segment increased its ADR by +4.4% (compared to +1.5% for the entire Parisian market), from €82.90 to €86.60 ex-VAT.

As for the rest of France, tourists clearly redirected themselves to other regions. All indicators are green: OR +1.3 pts, ADR +1.6% and RevPAR +3.4%. In fact, it is essential to take a step back from these results to realize that the market is only maintaining its performance to obtain a positively neutral balance. Occupancy ranges from 73.3% (+0.9 pt) for the budget segment to 77.9% (+0.8 pt) for the upscale segment. The middle segments are the ones whose market share increased the most, up to +1.6 pts for both the economy and midscale segments. The average daily rate varies between 48.40 € ex-VAT (+2.1%) at the bottom and 252.90 € ex-VAT (+0.8%) at the top. RevPAR  increased consecutively, especially in the economy and midscale segments: by +4.2% and +4.4% respectively, to reach €50.00 and €78.30 ex-VAT.

How did these destinations manage to do well? By combining various elements that have worked to their advantage. There were events such as the FiFA Women's World Cup, that took place at the beginning of the month, particularly in Lyon, which was been very beneficial to the Rhône-Alpes region. And there was also the 2019 edition of the famous Tour de Francethat kept the destination in business. On the other hand, the strong heat caused demand to shift to cooler destinations, especially during the heat wave on July 25.

A certain number of large urban areas are in decline, demonstrating how urban centers leaked to coastal, cool, green or mountain areas. Cities such as Lille (-2.2 pts), Rennes (-0.1 pt), or Rouen (-3.1 pts) experienced a decline in their OR. On the other hand, several metropolitan areas are progressing, thanks to the different events mentioned above. First of all, Lyon (+6.2 pts), the most impressive growth this month with all three matches for the FiFA Women's World Cup, which boosted the prices of Lyon's hotel by +20.6% and their RevPAR by +31.6%!

Far less spectacular, but nonetheless revealing double-digit growth, the Alsatian capital increased its RevPAR by 12.4% in July, thanks to an ADR up by +7.9% and an OR in progression by +2.9 pts. And yet, Strasbourg did not host a national event and was not spared from the heat. Occupancy nonetheless increased  throughout the month of July. Several days still broke occupancy records: Monday, July 15  at 87.96% in terms of growth with +18.39 pts, and Monday, July 1 in terms of absolute results (95.07%).

Finally, the urban areas of Montpellier and Grenoble were also very successful. The prefecture of the Hérault department progressed on levels: OR up +2.4 pts (77.3%), ADR +1.0% to 83.20 € ex-VAT, and RevPAR +4.3% of (64.30 € ex-VAT). The capital of Isère also showed good growth in its RevPAR (+5.6%) which grew to 38.20 € ex-VAT, but also in its OR (+2.3 pts) meaning 59.2% of its available rooms were occupied in July.

To conclude, and as a reminder that one cannot think only in terms of growth but must also look at the results for what they are, it should be remembered that the best OR was obtained by Nice with 89.8%, and the best ADR by Cannes with €269.00 ex-VAT. In other words, even if the PACA stagnates (OR +0.8 pts), or even declines (-1.70% of ADR), the region is the star of July, with the best occupancy (81.30%) and the highest ADR (174.40 € ex-VAT) of all of metropolitan France.

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