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Analysis

Top French cities for hotel markets

THE top French metropolises selected by the editors: how did they perform in 2018? What are the key figures? Inventory of the urban hospitality market. It is also an opportunity to take a look at the challenges of 2019 and the years to come.

It’s already February! So it’s high time to share our TOP 2018 French cities for the hospitality industry. We mentioned them recently in an article. Here is the follow-up analysis. The figures are the same, but now we have worked on them to rank  them and rationalize them to give you the Top Cities... This ranking thus takes into consideration the results as well as the trends: which destinations are on the map? Which cities continue to be top places for hospitality markets? These are the topics of the Top 10 for 2018!  We used forty or so quantitative and qualitative variables including trends and results to rank 15 French cities with the highest numbers of inhabitants with respect to these variables. We could have selected more variables, more cities, used other criteria, etc. As a result, Paris intramuros has the highest occupancy rate, the city is ranked 1 for this variable, but the capital’s average daily rate is in ranked 3. We have taken the city’s position on all the variables, and then weighted these rankings and sorted the averages: cities with the weakest averages are those with the best scores overall and thus may be found at the top. Regarding Paris we decided to separate Paris and Grand Paris this year. You will understand why when you read through Top.

This ranking serves as an illustration and an invitation to research, to go further. It is not a definitive conclusion set in stone. We will add more detailed studies by city, as we go along, with more details and more figures.

Finally, before leaving you to this first ranking of Top Cities by Hospitality ON's editors, a brief word on the sources: the main variables, those on the supply (notably OR, ADR, RevPAR) are from the MKG Consulting / OK_destination observatory; other variables come directly from INSEE or the websites of the town halls concerned. Occasionally other sources have been used (Inside Airbnb for example). You will find the list of variables at the end of the Top Cities.

1. Paris 

LA CAPITALE AU SOMMET

Source:  MKG Consulting observatory / OK_destination 
OR (occupancy rate) 2018: 81.3%
ADR (average daily rate) 2018: 162.90 euros (ex VAT)
RevPAR (revenue per available room) 2018: 132.40 euros (ex VAT)

Paris will always be Paris... or rather Paris is becoming Paris once again and therefore holds first place in the ranking! 81.3% occupancy rate, a Revenue per available room (RevPAR) of 132.40 euros (ex VAT)... The figures are good. But it is above all their progress that is impressive: a RevPAR up +12%, an ADR up +8.5%. Quite simply, the strongest growth in France. Especially since the Paris market is not lacking in players with its 200,000 listings on Airbnb and its 1,583 hotels and 81,373 rooms (provisional figures). This is actually the end of catching up after the bad years of 2015 and 2017. The RevPAR, in particular, is back to a high level after evolving at a slower pace than the occupancy rate. The destination of Paris is regaining momentum, once again proving the tremendous resilience of tourism over time. The question arises as to the future of these figures, because the yellow vest crisis that began at the end of 2018 did not affect Paris' overall good health until December. But in addition to the various possible crises - social, geopolitical, etc. - the destination seems to have many projects for the coming years: Grand Paris Express, Olympics, etc. In short: a promising return for the French capital.

 

1.5 Grand Paris

Basilique de Saint-Denis

Source:  MKG Consulting observatory / OK_destination 
TO 2018: 77.7%
ADR 2018: 119.90 euros (ex VAT)
RevPAR 2018: 93.10 euros (ex VAT)

Who still sees Paris hemmed in by its narrow ring road? Today, Paris is Grand Paris including for tourism! Admittedly, the region is backed by historical assets: Disney with the partial opening of Village Nature on September 1 last year, the Château de Versailles, La Défense, the Stade de France... But now we must go beyond these frameworks: opening of the MOB hotel at the flea market in Saint-Ouen, with over 1,000 apartments listed on Airbnb in this town, opening of the Seine Musicale in Boulogne and the La Défense Arena in Nanterre. The suburbs are on the move, although this phenomenon remains to be analysed: is the supply too expensive in Paris for certain categories of tourists? Has there been an increase in the number of Chinese tourists, who often stay far from the city centre? Tourists in the suburbs? Suburban tourism? Parisian Excursionists? Farewell suburbs: hello Grand Paris. These questions have a future as the Paris conurbation as a whole is rich in projects. For example the Basilica of Saint-Denis - see photo - which recently announced the launch of the reconstruction of the second tower: the site will be open to visitors, with a craftsman's village, workshops about masonry in the Middle Ages.... A real new tourist attraction, symbol of a booming region! Above all, it is the medium term that is likely to transform the region: line 14 extended in 2020, lines 15 and 17 for the Olympis in 2024, Rugby World Cup in 2023. "Made for sharing" remains a hot topic. Beware: Grand Paris is coming.

 

2. Nice

Nice, Place Masséna
Source:  MKG Consulting observatory / OK_destination 
OR 2018: 70.7%
ADR 2018: 127 euros  (ex VAT)
RevPAR 2018: 90.10 euros (ex VAT)

Completing the podium of comebacks: Nice takes third place in the ranking, with an occupancy rate of 70.7% for a 2.4 point increase compared to last year's rate. RevPAR is up by +7.40% in 2018. The strategy of lowering prices in 2017 paid off, resulting in growth in the occupancy rate, and 2018 marks a return to higher prices. Hence the city’s position on the podium: Nice has made a full comeback in terms of tourism. And on other levels, the city remains very dynamic. It benefits from an operation of national interest: Eco Valley which continues to grow with, in particular, the development of the business district of the Arenas into the "Grand Arénas", as well as "Nice Méridias", a research/university centre with its apartments designed by Jean Nouvel... In all, 50,000 jobs and 4,400 housing units are expected by 2026. All connected by two new tramway lines by 2020. This should sustain activity on the Promenade des Anglais, which has requested World Heritage Site status that would certainly benefit tourism.

3. Lyon

musée des confluences

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 69.5%
ADR 2018: 85 euros (ex VAT)                        
RevPAR 2018: 59.10 euros (ex VAT)
                        

The capital of the Gauls stands on the last step on the podium of our Top Cities. And for good reason: solid results, with an occupancy rate of almost 70%, a RevPAR of 60 euros... these are also growing: the RevPAR rose +2 euros between 2017 and 2018, and the occupancy rate is growing slightly... Admittedly, the trend is on a slight decline: the had increased more between 2016 and 2017 than between 2017 and 2018. Nevertheless, this slight slowdown is not enough to penalize the city in this ranking. Results remain solid and the city is attractive, both for now and in the near future. The "ONLY Lyon" brand, for example, is an excellent illustration of a successful territorial marketing campaign; not to mention the new Grande Stade de Lyon, or the Musée Confluence built in 2014 and which is emerging as the new figurehead in the city of the gones. Squares and events: the success of the Festival of Lights continues, with 100,000 foreign visitors announced in 2018. The future is as charged as the present: the Cité Internationale de la Gastronomie, is due to open this year in the former Hôtel Dieu in the city. This building has meaning and potential for the city of Les Bouchons, Bocuse and Troisgros... Not to mention the blue ring project to the north, changes to Lyon Part-Dieu station with a new tower. Lyon has a future whether or not the Lyon-Turin Link will be implemented, as it has not yet been built.

 

4. Marseille

le MuCEM

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 67.2%
ADR 2018:  82.70 euros (ex VAT)
RevPAR: 50.80 euros (ex VAT)

In Marseille, performance indicators are stable compared to 2017. The OR does not change, the RevPAR increases by a few cents... The number of overnight stays and tourists continues to increase (the final figures remain unavailable), after having passed the 6 million overnight stays mark in 2017. This is more than in Lyon, for example. This increase was absorbed by the opening of new hotels, new rooms and the increase in the Airbnb offer - although the development of the sharing economy has slowed considerably. This explains the stability of the 3 main indicators (OR, ADR, RevPAR). On the subject of Airbnb, it should be noted that the city did not seize the opportunity provided by the law to oblige owners to request a registration number before listing their property on the platform, thereby effectively lifting a legal barrier and facilitating the entry of apartments on the site and resulting in a welcome increase in the number of tourists to the Phocaean city. On one side the Euro-Mediterranean district and its new tower designed by Jean Nouvel, on the other side the collapse of an old building in the city centre. This presents a challenge even as the image and driving force of "Marseille, European Capital of Culture 2013" begins to fade. This dilapidated state is damaging to the overall image of the city, even if the city has done much for prestigious projects: renovation of the Major, Fort Saint Jean, MuCEM... Moreover, a final major project should further improve the waterfront: the project to renovate J4 has been chosen, the pier should accommodate a hotel. Other operations, of smaller scale such as urban revitalization are planned for the Capuchin market, on Cours Jean Jaurès ...

 

5. Bordeaux

Bordeaux

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 73.2 %
ADR 2018: 82.40 euros (ex VAT)
RevPAR: 60.30 euros (ex VAT)

Slowdown in Bordeaux: the occupancy rate is down very slightly, while there are increases in ADR and RevPAR by around +2%... Several explanations are possible: first, an increase in the number of hotels that is proportionately more pronounced than the increase in the number of guests, resulting in lower figures due to increased competition. Or a simple adjustment after the great years of the sleeping beauty - no longer so sleepy - especially since the opening of the Paris-Bordeaux TGV line. Between 2016 and 2017 the OR had increased by almost +4 points, between 2017 and 2018: the rate remains fixed. A superb 2016, a very good 2017, a plateau phase in 2018: and it is this slowdown that explains why Bordeaux appears at this level in the ranking this year, especially since many hotel openings are expected in the coming years. But what the years have held for the Girondine: the opening of the Cité du Vin, UNESCO classification for the city centre in 2007, launch of the national operation Bordeaux-Euratlantique,  creation of the brand "Osez Bordeaux", launch of the "Bordeaux Wine Trip" platform... The agenda was full. And even in 2018 with the opening of the Mer Marine Museum in the neighborhood. And it's not about to stop! In 2019 the museum of natural history is expected to reopen its doors, as is La Méca with its regional contemporary art collection. This will further enhance the city's appeal. To this must be added the upcoming opening of a new exhibition centre, which should also attract overnight stays.

 

6. Strasbourg

la petite france à Strasbourg

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 68 %
ADR 2018
: 81.6 euros (ex VAT)
RevPAR
: 55.50 (ex VAT)             

A complicated year for Strasbourg? Overall, the city reflects France in general: growth in income slowly recovering after the last few complicated years. New hotels are opening and the number of overnight stays is increasing: overall, the trend is rather good. This is also evident in the RevPAR and ADR: both are growing, with  a +2.30% increase in average daily rates. Year on year, the occupancy rate drops slightly, from 69.2% in 2017 to 68% in 2018. The memory of the Christmas attack remains. Strasbourg has resisted well: although the occupancy rate fell at the end of December, the RevPAR continued to rise. In short: prices have increased to offset the decrease in the number of guests. Decreases in OR combined with increases in ADR resulted in a very slight increase in RevPAR, even including the complicated period of late December. It will be necessary to see, in the longer term and especially during the next Christmas market, whether the figures can be maintained. More broadly, Strasbourg retains excellent assets: proximity to Germany, which allows it to benefit from the planned growth of cross-border projects, the European Parliament, the recently enlarged Unesco Zone, its closeness to Europa Park. On the subject of Europa Park: the project for a cable car crossing the Rhine is currently frozen, but the park still plans a new extension for 2019: "Rulantica". The European Parliament area, and the "archipelago" business district project, saw the first deliveries of offices in 2018, the next ones are planned for 2020.

For more details, visit: Attack in Strasbourg: What impact for the city's hoteliers 

 

7. Rennes

Rennes

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 67 %
ADR 2018: 70.10 euros (ex VAT)
RevPAR: 47 euros (ex VAT)

As we discussed, (https://hospitality-on.com/en/statistiques-tendances/ranking-major-french-cities-2018,) Rennes is this year's surprise, with an occupancy rate that increased +2.3 points and above all a RevPAR that rose by almost +10%. The number of rooms is growing, as is the number of nights: all indicators are positive. The question is, where does this performance come from? First of all, we will have to wait until we have the exact number of nights, to see if, after the growth between 2016 and 2017, it is possible to show another boom in demand in 2018. The destination's market is changing, with the opening of a hotel with higher prices driving the RevPAR. Perhaps a catching-up effect of the destination that is becoming a mecca for tourism? The opening of the Rennes Congress Centre and the Jacobins convent led to an increase in business and tourism. Above all, the reason must be found in the LGV Bretagne - Pays de la Loire, which, after its opening in July 2017, put Rennes at 1 h 30 from the capital, 35-minute gain compared to 2016.

 

8. Nantes

galerie à Nantes

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 70.5 %
ADR 2018: 72.10 euros (ex VAT)
RevPAR: 50.80 euros (ex VAT)

The occupancy rate in Nantes was 70.5%, more than Lyon or Strasbourg. Similarly, RevPAR gained +6.70% between 2017 and 2018. This explains Nantes' entry into the ranking (OR, ADR, and RevPAR being the strongest variables when ranking cities). The question remains, where did this increase come from? Because other statistics indicate the opposite: the number of overnight stays fell between 2016 and 2017, as did the number of rooms in 2018 according to INSEE, figures that will undoubtedly be stable or even decrease in 2019. This is probably where the key lies: tighter markets, less competition, better figures, a move upmarket for the destination. The city may have also lost some of its attractiveness compared to Bordeaux, further to the opening of the new TGV line. Debates surrounding Notre Dame des Landes Airport, which lasted for many years, have marred the image of the destination with videos showing near war in the countryside, which may have impacted the destination of Nantes. All the more surprising, the city in the Loire Atlantique has no shortage of major assets: gateway to the Loire Valley, its vineyards and castles, bike accessibility, Nantes' machines, many festivals, the Château des Ducs de Bretagne. It will be important to see if the Euronantes projects, business district, and the latest office capacity planned for 2020 can restore a little dynamism to the city of the Loire Atlantique.

 

9. Rouen

le gros horloge à Rouen

Source:  MKG Consulting observatory / OK_destination 
OR 2018: 68 %
ADR 2018: 71.50 euros (ex VAT)
RevPAR: 48.60 euros (ex VAT)

Rouen is the last of the top ten. Revenues increased with a RevPAR that grew almost +5%. Above all, the city has the fewest listings of all the top ten on Airbnb, a godsend for hoteliers who face the least competition from this platform in this territory. That said, the number of nights spent in 2017 announced by INSEE in classified hotels counted by the platform is around 2.5 million, a figure that seems low for a city so culturally rich. Rue du Gros, the old market, the Cross marking the square where Joan of Arc was burned, the half-timbered houses, the cathedral, which was long the highest building built by humanity, a UNESCO site: the list of heritage and cultural properties is dizzyingly long. The low number of overnight stays may be explained by its close proximity to Paris, tourist day excursions, and a low MICE tourism dynamic. That said, from a tourism point of view, the city is developing, with the Armada (an event scheduled every 5 years) arriving in 2019, the 360 Panorama, the sound and light shows on the cathedral. All this should improve the situation and in particular help produce "repeaters". The Armada, for example, will bring the Hermione, a tall ship that always causes a sensation when it passes through a city.

Methodology:

List of selected variables, in order of importance in the weighting, all variables are derived from the figures from the MKG Consulting Observatory / OK_destination. When figures come from INSEE, this is indicated in brackets.

First

  • Occupancy rate 2018
  • Average daily rate 2018
  • Revenu per available room (RevPAR) 2018

Second

  • Occupancy rate 2017
  • Average daily rate 2017
  • RevPAR 2017

Third:

  • Growth in points for Occupancy rate between 2017 and 2018
  • Growth in points for Occupancy rate between 2016 and 2017
  • Growth in Average daily rate between 2017 and 2018
  • Growth in Average daily rate, corrected with inflation, between 2017 and 2018
  • Growth in RevPAR entre 2017 and 2018
  • Growth in du RevPAR, corrected with inflation, between 2017 and 2018

Fourth:

  • Number of hotels 2018 (Insee)
  • Number of hotels 2017 (Insee)
  • Difference entre number of hotels 2017 and number of hotels 2018 (Insee)
  • Number of nights 2017
  • Number of nights 2016
  • Growth in number of nights between 2016 and 2017
  • Number of hotel rooms in 2018 (Insee)
  • Number of hotel rooms in 2017 (Insee)
  • Difference in number of hotel rooms in between 2017 and 2018
  • Number of hotels in 2017
  • Number of listings created on Airbnb as of January 1, 2019
  • Number of listings created on Airbnb as of Janvier 1, 2018
  • Number of listings created on Airbnb as of Janvier 1, 2017
  • Time from airport to city center
  • GDP of the region
  • Number of inhabitants

 

 

 

 

 

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