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Trends

July 2018: a (very) promising start to summer

Thanks to an economic situation that continues to be favourable in Europe, French hoteliers increased their prices in all categories while recording an increase in occupancy. Hotel performances in July were gratifying and heralded the Côte d'Azur’s revival after two difficult years. Paris and certain metropolises such as Rennes and Nantes also stand out, while others stagnate.

After a year 2017 which saw an increase in occupancy despite prices, the year 2018 sees French hoteliers ADRs on the rise. July confirmed this trend across all categories with an average price up 6.3% compared to the previous year. Budget hoteliers boosted prices (+5.0%) while their OR fell 1.4 points to 73.9%. Occupancy rates, which had risen quite strongly in all categories in July 2017, continued to rise (+1.7 points) to 76.3%. The upscale segment, which had been penalized in recent years due to the attacks, won the double challenge of increasing its occupancy (+4.3 points) as well as its prices (+5.7%) and recorded a RevPAR up 11.6%. The mid-scale and economy categories followed the same trend with RevPARs up 8.4% and 6.9%.

This month of July 2018 thus records a strong growth in RevPAR (+8.7% compared to the previous year) driven by ADRs on all categories.

 

Celebrating the Côte d'Azur

Nice and Cannes was hard hit by the exceptional event of July 2016. Two years later, the two Mediterranean cities have recovered and are recording strong growth in RevPAR over last year: +29.8% and +6.3%. If there is a stronger increase in Cannes, it is due to the difficulties it encountered last year to attract Middle Eastern clients at a time when diplomatic tension was developing between Saudi Arabia and Qatar. In July 2018, occupancy in the city is up 7.1 points, overcoming the troubles of the previous summer. It is also successfully moving upmarket, with major investments made in its luxury hotel business in recent years, causing average daily rates to jump 17.9% to €299.3, tax excluded, one of the highest rates in the country. Neighbouring Nice saw its occupancy stagnate at a high level (+0.3 point or 88.7%) and took advantage of this to increase prices by 6.0% to reach 157.7€ before tax.

Paris benefits from the return of foreign customers

Paris and its region recorded strong increases in RevPAR, close to the 14% mark, driven by prices in Paris Intramuros (+8.5%) and the greater Paris region (+7.6%). Occupancy rates are also up thanks to an increase in long-haul (North America) and European arrivals.

Provincial cities: between calm and animation

Other agglomerations also stand out like Rennes. The Breton metropolis has become more attractive since the arrival of the TGV and related investments. With a culturally vibrant summer thanks to the Pinault Collection exhibited during the season, it posted a RevPAR up 20.3% over the previous year. This growth was driven by both its average daily rate (+8.3%) and its occupancy rate (+6.6 points).

On the other hand, other cities that are accustomed to good results during the summer saw their occupancy rates drop: Montpellier and Marseille saw their occupancy rates drop by 2.4 points and 5.3 points respectively. The month of August will confirm whether this is a temporary decline or marks a loss of appeal to summer tourists. 

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