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May 2019: mediocre results as this summer season opens in France

After a burst of activity in April, growth in hotel activity is slowing in the first fine days of the year. French hoteliers have lost a little clientele with respect to last year, with an OR down -1.2 points with respect to May 2018, and by -0.1 pt since the beginning of 2019 (YTD). The ADR, meanwhile, increased slightly (+1.6%) to reach 98.40€ ex-VAT throughout France, but that was not enough to increase the RevPAR which is 67.30€ ex-VAT, representing a -0.1% drop.

First of all, the entry range caused the occupancy rate to go down significantly overall. The budget segment lost -2.3 points this month, to see its OR drop from 67.4% in May 2018 to 65.2% in May 2019. The economy segment posted results that were only slightly better: -1.3 points OR. In both cases prices make up for these losses (+2.5% for budget, +1.2% for economy), resulting in a nearly stable RevPAR down just -1.0% and -0.7% respectively.

The midscale and upscale saw the performances in their entry ranges change only slightly. Their supplies are down by -0.4 points for both. Rooms in the midscale (ADR +1.8%) sell for more at an average of 106.40€ ex-VAT, resulting in the only positive RevPAR up by +1.2% to reach 73.20€ ex-VAT. The average daily rate on the upscale is the only one that is down, by -0.2% to 226.50€ ex-VAT; its RevPAR is also down by -0.7% to 16.5€ ex-VAT.

From a more regional point of view, only Paris proper and a few regional cities show growth. The OR in the capital gained +0.8 points and the ADR rose +1.7% for a positive RevPAR (+2.7%). Other regions in France slipped a bit in May. The OR fell to 64.7% (-1.1 points), the RevPAR to 55.80€ ex-VAT (-0.9%), and the ADR stagnated at 86.20€ ex-VAT (+0.8%). Over a longer period (YTD), results are brighter, with the OR down only slightly for all of France (-0.1 pt) and it is even up in the province (+0.3 pts) while in Paris it is down slightly (-0.2 pts). The boost at the beginning of the year has been carried over until now by regional cities. This is  confirmed this month once again for some: Grenoble, Lyon, Nice and Nantes.

The latter reveals double-digit growth on several occasions this month.

First of all, the city benefited greatly from the long weekend around the VE Day (May 8). The results have increased dramatically: OR is up by +29.45 pts on Monday (06/5), +27.23 pts on Thursday (09/5) and +16.34 pts on Saturday (11/5). Then one-off events such as a rock concert on Monday 20 (Lenny Kravitz) filled 94.37% of the Nantes hotel industry, up +40.92 pts (the record of the month). On the same day, prices went up (+31.2%) for an average daily rate of €79.91 ex-VAT, so that the RevPAR literally exploded (+131.67%). A few days later, it was the triennial event of the Débord de Loire from May 23 to 26 that brought a crowd of tourists back to the city of the dukes; they came to admire the parade of tall ships in great pomp such as the Hermione or the Belem. No fewer than 100,000 visitors were expected, and on the day of the inauguration, the city's hoteliers outperformed, with occupancy up +36.44 pts resulting in an occupancy rate of 128.12%! The following days were nevertheless much more neutral, with occupancy fluctuating between 64 and 68%. Overall, however, the outcome in May was very positive for Nantes, with hotels seeing three-quarters of their available rooms occupied (75.19%), up +4.13 points, in contrast with their rates, which are marginally lower (-0.38%) to 72.84 € ex-VAT. This does not prevent the RevPAR of the supply from growing to 54.76€ ex-VAT (+5.42%).

Nice, on the other hand, has seen good results in the last month as well. To begin with, the Côte d'Azur destination welcomed many tourists for a long weekend around the long weekend of May 1, France's Labor Day. On that date it gained +4.74 points in occupancy compared to the same date last year. The days that followed were all the more positive: Thursday (+7.68 pts), Friday (8.53 pts) and Saturday (+8.91 pts). It should be noted that the dates had the advantage of coinciding with La Fête des Mai, an event that takes place over several days in May each year when "the culture and language of Nice are in the spotlight in the gardens of the Cimiez Arena," explains the municipality. Combined with the long weekend of May 1st, the city had the perfect cocktail to offer visitors a short stay full of color and flavor. Hoteliers took advantage of this influx by inflating their prices on Wednesday, May 1, (+8.16%), but not the following days. In all cases, RevPAR increased significantly in the first four days of the month, ranging from 12.07% (May 4) to 16.38% (May 1). The last two weeks of May also welcomed the first tourists of the season, as available rooms were taken by storm, so that the hotels posted occupancy rates of between 80% on Friday 17 and Monday 27, and 94.74% on Saturday 25, the last day of the Cannes Film Festival. The latter was very advantageous for its neighbor, since from the first day of the Festival (Saturday, May 23) hotels were over-occupied, at 128.38% (+44.19 pts), while prices were falling (-14.06% on average). Over the whole month, 81.21% of rooms available for booking in Nice were occupied, a figure up +2.47 pts to an average daily rate of 192.68 € ex-VAT (+0.13%) and a RevPAR of 156.48 € ex-VAT (+3.28%).

Grenoble and Lyon close the podium of this month of May. The agglomeration in the Isère gained in terms of occupancy (+2.5 pts) and average daily rate (+1.3%) which reached 61.90€ ex-VAT. Its RevPAR grew significantly (+6.4%) to 32.30€ ex-VAT. The capitale of the gaules also posted positive results: OR up (2.5 pts) just like the RevPAR (+2.9%).

The rest of France's cities experienced a certain slowdown, particularly in terms of occupancy rate: Bordeaux (-0.5 pt), Lille (-1.6 pt), Marseille (-2.0 pts), Rennes (-1.2 pts), Rouen (-1.3 pts), Strasbourg (-1.2 pts) and Toulouse (-1.8 pt). But the first results in June already demonstrate that there has been an inversion in this trend, with results driven by events such as FIFA Women's Word Cup in Rennes or in Nice and also Roland Garros. So, stay tuned!

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