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June 2019: the French hotel industry shines on all fronts

June proved to be very bright this year. All indicators are positive, with some even achieving double-digit growth. Very encouraging results, which bode well for the summer holidays.

June 2019 was excellent for French hoteliers, as MKG Consulting reminds us. Remarkable results were produced across the country: occupancy rate +2.6 points, an increase in average daily rate by +6.6% and in the RevPAR by +10.2%.

All segments are progressing, but the most remarkable monthly results were achieved in the high-end hotel sector: an OR of 85.3% (+1.4 pt) plus an ADR up +8.9% to increase RevPAR by +10.7%. On a more detailed scale, it is clear that it was in Paris (+14.1%) and Île-de-France (+15.4%) that these prices were driven up. Strictly speaking, the mid-scale segment broke the record for growth in OR this month, gaining +3.0 pts compared to the same month last year.

From a regional perspective, France's performance is improving thanks to two opposing and complementary dynamics. On the one hand, the Ile-de-France region, with a RevPAR that has largely evolved (+13.2%) thanks to an increase in prices (+10.8%), for both Paris (ADR  218.20€ ex-VAT, or +11.9%) and the rest of Ile-de-France (ADR  €98.60 excluding tax, or +9.4%), while the occupancy rate in the region only changed by +1.9 pt compared to June 2018, going from 87.5% to 89.4%.

Instead, the other French regions also gained in attendance: +3.0 pts, to go from 74.4% to 77.5%, while prices hardly increased, as they rose by only +3.2% to 89.20€ ex-VAT, compared to 151.00€ ex-VAT for the entire Île-de-France (including Paris). The regional RevPAR is therefore experiencing much slower growth than the Ile-de-France region, with an average rate of +7.4% over the month, for an average income of 69.10€ ex-VAT per available room (compared to 135.00€ ex-VAT in IDF). Growth in the province was driven by entry-level and mid-range hotels, with these three segments (budget, eco and mid-range) all gaining around 3 points in occupancy, while high-end properties grew by only +1.3 pt on average, although 80.8% of their rooms were occupied. In addition to these mediocre results, some cities that outperformed remarkably in June, such as Paris, Rouen, Grenoble and Montpellier.

To start with, the Seine-Maritime prefecture hosted a most exceptional event since it only occurs every four, or even every six years as was the case for this last edition. This is the Armada, a parade of ships that took place from June 6 to 16 this year. It was expected to attract no fewer than seven million visitors from all over the world. Throughout the days of festivities, occupancy rates increased by +3.29 pts for an average of 78.64%. But it is above all the average price that literally exploded: 131.68€ ex-VAT (compared to 77.09€ ex-VAT last year), so that each available room brought in an average of 103.55€ ex-VAT, compared to 58.09€ ex-VAT during the same period the previous year.

Like Nice and Rennes, Grenoble's hoteliers benefited greatly from the Women's World Cup effect. Indeed, the capital of the French Alps experienced rapid growth in June, posting a positive double-digit increase in RevPAR (+19.6%). While the weekend matches were the ones that brought in the most revenue for hotels, those that took place during the week brought in the most tourists. Thus, the match between Brazil and Jamaica on Sunday 9 increased room prices by +24.52% for a RevPAR that increased by 76.91% to 34.12€ ex-VAT, while the occupancy rate, which obtained +15.33 additional points compared to the same day last year, was 51.78%. The Canada vs New Zealand match on Saturday, June 15 was just as economically successful in the Grenoble hotel industry: +80.75% increase in RevPAR and +31.95% increase in PM. As for the matches on Wednesday 12 and Tuesday 18, they provided a spectacular customer base for hoteliers, whose properties reached  93.75% (+5.36 pts) and 95.45% (+3.28 pts) respectively. The last game (between Jamaica and Australia) broke the record for the most expensive night of the month, at a price of €71.20 ex-VAT (+11.07%), for a RevPAR of €67.96 (+15.03%).

As far as Montpellier is concerned, long weekends benefited the city in Occitanie. Sunny days and the proximity to the sea attracted tourists who came to enjoy the first summery temperatures during this pre-holiday period. The first weekend of the month set the trend with an occupancy rate up +32.6 percentage points on Saturday (OR 95.49%) and +12.34 on Sunday (OR of 56.34%). The following weekend continued in this vein: OR of 92.6% on Saturday, up +16.49 points on Friday and +22.81 points on Sunday. Finally, the penultimate weekend benefited from the last city breakers: OR at 92.68% on Saturday (+12.09 pts) and 70.25% on Sunday (+11.44 pts). In terms of absolute prices, it was the game nights that broke records. Thus on Monday, June 10 the ADR was 90.49€ ex-VAT (+17.61%), on Thursday, June 13 it was 93.80€ ex-VAT (down -6.56% but still the June record!), on Monday, June 17 it was 91.56€ ex-VAT (+13.08%) and on Thursday, June 20 it was 92.71€ ex-VAT (+13.11%). In other words, in the absence of being able to bring in more customers than on previous days, the hotel industry was able to capitalize on this economic windfall by stretching their rates as much as possible, so that when combined with weekends, the income per available room this month was €71.99 ex-VAT, a double digit increase (+13.95%) compared to June 2018.

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