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August 2018: a brilliant summer for the French hotel industry

French hoteliers have had a brilliant summer with occupancy rates that continue to grow in August and average daily rates skyrocketing. While some cities are disappointing, such as Bordeaux and Marseille, others reveal themselves like Lille and Rennes; finally Paris and its suburbs shine with a thousands lights.

July 2018 was encouraging for the French hotel industry and foreshadowed a prosperous summer season. The summer of 2018 will have been a success for the industry, which posted improved performance compared to last year across all categories.

The Occupancy Rate increased by 1.8 points overall in France compared to August 2017, driven by the upscale segment, which jumped by 5.5 points. The other categories are also progressing, such as the mid-range segment, which is up 3.4 points, but the budget segment is down by 2.1 points to 72.4%.

The drop in the OR of the super-economy was impacted by the very sharp rise in prices on the segment (+5.0%). All categories combined, Average Prices increased by 4.9%, driven by all segments.

August 2018 was an excellent season for hoteliers operating in the high-end segment, which recorded a 10.7% increase in the RevPAR. The latter succeeded in meeting the dual challenge of increasing their PM (+2.7%) while significantly increasing their occupancy. Overall, the RevPAR in France jumped 7.5%. A brilliant August.


Paris the summer glowed

Paris Intra-muros posted the best performances in France with a 22.6% (!) leap in its RevPAR compared to the previous year to reach €107.5 excluding tax. Its Occupancy Rate increased by 8.2 points and its Average Price by 9.7%. The hosting of the Gay Games from August 4 to 12 with more than 10,000 participants contributed to the growth in the capital's performance.

The increase benefits the entire region, which continues to gain in attractiveness in the summer. Thus, the Paris conurbation (not including Paris Intra-Muros) gained 6.1 points in its OR, +9.7% for its ADR and saw its RevPAR rise to €71.2 (+19.5%). Versailles is reported to have received a record number of visitors this summer, and further benefited from the reopening of the Queen's hamlet.


The Côte d'Azur remains a sure value

Hoteliers on the Côte d'Azur hoteliers will have recovered their lustre this season. After a successful July 2017, Nice has reached a plateau at stratospheric levels (91.2% with a 0.9 point increase compared to August 2017). The city of Garibaldi took this opportunity to increase its prices (+4.6%), logically driving its RevPAR (+5.6%) upwards to €145.0 including tax.

While Cannes does have a lower OR (84.4%, up 0.9 point), it is driven by its substantial upscale supply, it has recorded ADR at much higher levels (€353.3 excluding tax, +1.6%). The city intends to capitalize on its success with affluent customers by expanding its luxury supply and renovating the Croisette (10 million euros of investment are planned). 


Rennes, revelation of summer 2018?

Since the arrival of the TGV, Rennes continues to attract visitors and to gain in popularity among tourists. It is developing its offer for business customers and proposes a new conference centre (Le Couvent des Jacobins), while increasing its attractiveness to summer holidaymakers. After a good July, August 2018 saw excellent performance for hoteliers. Compared to August of the previous year, they gained 2.7 points for their OR, 7.7% for their ADR and experienced a 12.6% increase in their RevPAR. The latter, at €37.2 excluding tax, is certainly lower than that of other cities, but nonetheless shows potential for the years to come.

More surprises and some disappointments

Lille (+14.4% of RevPAR compared to August 2017) Rouen (+8.7%), Montpellier (+6.3%), as well as other cities will have succeeded in taking advantage of the improved economic situation in Europe to increase their OR and prices. Other cities disappoint: Marseille is unable to find its public in August (-2.2 points of OR) and shows a drop in its RevPAR by 1.1%. Bordeaux, which had an excellent summer in 2017, is suffering from a pendulum effect this year in terms of OR (-3.5 points), the boom in its hotel supply could explain this development. The sleeping beauty is preparing for the harvest more calmly this year; other cities will produce a richer vintage.





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