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Analyses

November 2022: The French hotel industry remains balanced

The All Saints holidays (which ran from October 22 to November 7) combined with the extended weekend of November 11, motivated French people to move. International and business clients were also there, resulting in good levels of activity in the major French cities. Of course, the seasonality effect did not allow extraordinary performances in November, but still, the return to pre-crisis levels is close (-2.6 points in ORs only) even if some social movements in the middle of the month affected the tourism sector. And if, the dynamic between November 2022 vs. November 2019 was not as good as that seen between October 2022 and October 2019, the month's results remain good. Thanks to an average daily rates that rose 13.1%, the country was able to post RevPAR at +8.7%.

In November, the occupancy rate at the national level was 61.8% (-2.6 points relative to 2019): the budget segment is finally the one that has managed to catch up the most compared to November 2019, with a gap of only -1.1 points, while the upscale segment is still showing -7%. While occupancy rates have not quite recovered this month across all segments, the increase in ADRs is nonetheless enabling RevPAR growth of between 5 and 10%, all ranges combined. The midscale segment posted the best growth in November compared to pre-COVID results (+10.1% in RevPAR), while the economy segment grew slowly (+5.6% only in terms of RevPAR) due to a more moderate price increase (+10.2% vs. 21.2% for the upscale segment!).

 

If occupancy is flirting with, but not quite reaching, November 2019 levels, the Province performed the best with a gap of only -1.5 points, while Paris posted a gap of -3.8 points and the Ile-de-France region (excluding Paris) -5.5 points. On the other hand, if the average daily rates show a clear increase relative to the pre-crisis period (+13.1%), this is primarily due to the increase in average Parisian prices (+23.2%), which inevitably allows the Parisian RevPAR to rise to €157.8, or +17.5%. By comparison, the Province posted an ADR change of +9.8% vs. November 2019 and a RevPAR increase of 7.2%, while the Ile-de-France region (outside Paris) is still struggling with a RevPAR gap of -2% due to a much more contained average daily rates increase (+6.2%).

With the exception of Corsica, all regions saw their RevPAR levels in November that were significantly higher than in 2019. Centre-Val-de-Loire, Bretagne and Ile-de-France stood out slightly with RevPAR increases of  >10% compared to November 2019.

While on the occupancy side, only Bretagne (+0.7 points), Centre-Val-de-Loire (+0.4 points) and Nouvelle-Aquitaine (+0.2 points) managed to exceed their pre-crisis occupancy rates, on the price side Ile-de-France marked a big difference with a price increase of +17.6%.

The major urban areas are picking up : Strasbourg (11.4%), Toulon (15.2%) and Paris (10.5%), and Marseille-Aix-en-Provence (13.2%) passed the 10% growth mark in November 2022 vs. 2019, attesting to the recovery in economic and business activity. Even Toulouse, which had been slow to recover, is now posting 6% growth in RevPAR.

Despite the approach of the end-of-year holidays, the threat of power cuts and the economic situation of the French, is the French hotel industry still as resilient? October had posted +22% difference in activity with October 2019, November 2022 only recorded 8.7% difference with November 2019, what direction will the momentum take in December? At this point, booking rates for the 2022-2023 winter season remain encouraging.

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