May 2020: French hotel business confined to the budget segment

After a month of April in which RevPAR lost -96.5%, the performance in May 2020 was again strongly affected by a decrease of RevPAR of 93.6% below its 2019 level. There is both a decrease in OR of 60 points (8.0% in 2020 compared to 68.0% in 2019) and an average price drop of 45.9% (from €98.9 excluding VAT to €53.5 excluding VAT).

The more upscale the hotels are, the more they were affected compared to the previous year, with a drop in RevPAR ranging from -77.1% for the budge segment to -99.0% for the upscale supply. The same applies when comparing to April's performance trend. The first phase of reopening, which started on May 11, had a much greater impact on the Budget hotel sector,  77.1% decrease in May compared to -88.4% in April. The effect was more modest in the Economy segment (-90.7% versus -95.8% in April), the Midscale segment (-96.0% versus -98.0%) and finally the Upscale segment (-99.0% versus -99.1%). This can be explained by the fact that the upscale hotel sector remains highly dependent on international customers, unlike the super-economy hotel sector, which receives more business trips from France, especially trips that are deemed essential business activities (craftsmen, workers, etc.). 

This difference between the segments is also reflected in the percentage of total supply available on the market, which has always been higher in the budget hotel sector. The economy segment also benefited from recovery during the first phase of reopening that started on May 11, with a return to around 55% of available supply and even close to 60% at the beginning of June. The upper-scale hotel sectors were also able to reopen part of its supply, but at a later stage and less than 20% of its portfolio.