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October 2017: Light at the end of the tunnel for the French hotel industry

In October, the French hotel industry signed a fourth consecutive month of growth in the RevPAR, simultaneously confirming the improved health of a sector that sees the light at the end of the tunnel. In Paris especially, occupancy rates are regaining pre-crisis highs. At the same time, some regional metropolises have confirmed their dynamism.

At a time when France has been designated to host the Rugby World Cup in 2023, one month after the announcement of the choice of Paris as the host city for the 2024 Olympic Games, and at a time when the French capital has been selected to host the seat of the European Banking Authority (which will have to leave London once Brexit becomes effective), the hotel sector has confirmed in early autumn the recovery that has been achieved since the summer.

The RevPAR rose by 4.9% and once again, all categories benefited from renewed demand. Occupancy rates rose by 2.8 percentage points on the super-economic and economic segments to 3.2 percentage points on the mid-scale segment, reflecting the return of stronger demand across all segments. These results are in line with the trends of the last few months: + 3.2 points across all categories combined at the end of October.

 

 

The return of customers is confirmed by wise pricing, with the average price remaining stable at +0.6%. However, this result shows a stabilization for the last 3 months compared to the bearish trend of previous months, and thus bodes better for the coming period. Mid-scale hotels are the only ones to experience a drop in average prices in October (-0.4%), explaining slightly weaker growth in RevPAR than in other categories: +4.2% compared with +5.0% to 6.4% in other segments.

In the Ile-de-France (outside Paris), in particular, mid-range hotels recorded a significant drop in prices (-6%). This contraction in average daily rates may also be observed in the other categories on the outskirts of the capital: -2.2% across all categories. On the other hand, Paris intramuros stands out with a second consecutive month of growth in average daily rates, which, within the context of improved occupancy rates, reveals the good performance of business demand in this new business year.

In the provinces, regional metropolises have met with various fortunes. While Lyon, Rennes and Strasbourg saw the RevPAR fall compared to October 2016, generally due to a drop in average daily rates, others showed marked dynamism. Nice (+5.5% increase in RevPAR), Bordeaux (+6.2%), Toulouse (+9.2%), Marseille (+14.2%) and Lille (+17.7%) posted a much more favorable October after a difficult start to the year for some of them.

Generally speaking, a look at October's performance offers a more optimistic picture than in the recent past. The drop in average prices seems to have been halted, although there are still difficulties in the peripheral areas of Paris, and the improvement in performance has spread to most French cities.

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