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June 2020: an uneven recovery in the French hotel market to close the first half of 2020 greatly impacted by the health crisis

In France, hotel performance in the first half of 2020 was largely impacted by the health crisis, with a significant decline compared to the previous year. At 29.6%, the occupancy rate was 37.2 points lower than the first half of 2019. The same applies to the Average Daily Rate (-39.2%) and RevPAR (-81.7%).

Conversely, after a start of un-lockdown in mid-May and the beginning of a recovery, June's performance continued to recover. The overall Occupancy Rate rose from 8% in May, 60 points lower than in May 2019, to 24.5% in June, only 56.6 points behind the performance of June 2019. 

All segments did not benefit equally from the recovery. Indeed, the recovery went slower for the upper-scale segments, which are much more dependent on international tourism than the budget segments. Occupancy rates in June ranged from 35.8% for the budget segment, 42.1 points lower than last year, to 8.6% for the upscale and luxury segments, 76.7 points lower than 2019. These changes in occupancy rates therefore imply lower RevPARs. RevPAR in the budget segment is 59.6% lower than last year, while RevPAR in the upscale and luxury segments is 93.1% lower than the 2019 level.

In addition to a difference at the segment level, there is also a difference at a regional level. Not all regions in France have benefited equally from this recovery. While in June the French provinces had an Occupancy Rate 48.7 points below last year's level, In the Paris Region excluding Paris the OR was 63.8 points below last year’s level and 84.3 points less for Paris. In terms of RevPAR, the trends follow the same logic with -95.9% for Paris, -83.4% for the Paris region excluding Paris and -72.2% in the Provinces. The Parisian region is in fact the region the most dependent on international tourism in France, with more than 55% of overnights by foreign tourists in 2019. The performance at the beginning of July confirms this trend with an OR in the provinces close to 50%, reducing the gap with the previous year from -48.7 points in June to -28.2 at the beginning of July.

Among the provincial regions, those with the highest Occupancy Rates are those that depend on leisure tourism. The leisure clientele, which has seen a revival since the un-lockdown in May and which has been strongly encouraged by the authorities' measures to support professionals in the sector, is supporting activity on the coast. Thus the regions of Brittany, Normandy and Pays de la Loire have some of the highest occupancy rates due to the start of the French domestic seaside tourism season. The Provence Alpes Côte d'Azur and Occitanie regions, on the other hand, benefit less from this recovery due to the Mediterranean coast's greater dependency on international tourists.

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