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Hospitality Industry Trends |
Thursday December 4th, 2008 |
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November 2007 : the French hotel industry flourishes despite social unrest |
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After a record October (+14.3%), the first estimates for November show an increase in RevPAR of 9.6%, due to an increase both in occupancy rates (+2.3 points) and average rates (+5.9%). |
• Despite a month of November plagued with urban violence and public social movements, marked by the transportation strikes and rioting in Villiers-le-Bel, the French hotel industry remains in positive progression.
• After a record October (+14.3%), the first estimates for November show an increase in RevPAR of 9.6%, due to an increase both in occupancy rates (+2.3 points) and average rates (+5.9%).
• Since the beginning of the year, the increase in RevPAR is confirmed at 9.2%, a result which brings France closer to the record held in 2000.
• Benefiting from a very positive trend, France boasts one of the highest performance levels among major European countries, beating the United Kingdom, Spain, Germany and Italy.
Despite strikes and urban violence, November showed an increase in RevPAR of nearly 10%
Performance of integrated hotel chains per category in France
Monthly results - November 2007 - first estimates
Source : MKG Hospitality's database - official provider of data for hotel chains - November 2007
Average Rates and RevPAR expressed in euros (tax included)
According to the first estimates by MKG Hospitality, the French hotel industry continues its steady rise since the beginning of 2007 and records a progression in RevPAR of around 9.6% in November. This performance comes on the tailcoats of a record month of October (14.3% in RevPAR) and follows the trends observed since the beginning of the year. The midscale and upscale segments are still those who benefit most in hotel activity. They show a progression rate of 10% per superior room. The 2* segment also had good occupation rate results.
The social conflicts did not seem to have a serious impact on the global dynamic of the hotel sector. Of course, the strikes did cause a decrease in performance rates, notably in Paris. MKG Hospitality estimated the loss at 6 million euros for Parisian hoteliers. On a national level, however, the impact remains limited.
Daily RevPAR variation1 rates from 14th to 30 november 2007 in the city of Paris
Source : MKG Hospitality's database - official provider of data for hotel chains - November 2007
1- Evolution calculation based on the same day of the same week in 2006 (eg. Wednesday November 14, 2007 is compared to Wednesday November 15, 2006).
2- Evolution of cumulative RevPAR from November 1 to November 30, 2007.
In Paris, the first days of November clearly show an increase due to the success of the Batimat trade show, which showed exceptional results with close to 450,000 visitors. The second part of the month was less favourable. During the 10 days of public transport strikes, 8 showed progressions in RevPAR which were inferior to the monthly average.
The end of the strikes therefore showed an boost in hotel occupation and through the end of the month the progression in RevPAR accelerated. The increase in revenue per room recorded between Saturday November 24 and Friday November 30 was at +13.2%, while during the strikes it reached a low of +4.2%.
The record is in sight for the French hotel industry
Performance of integrated hotel chains per category in France
Cumulative results for January through November 2007 - First estimates
Source : Base de données MKG Hospitality - fournisseur officiel des chaînes hôtelières - Décembre 2007
Average Rates and RevPAR expressed in euros (tax included)
With an increase in RevPAR of 9.6%, November reinforces the progression of results for the French hotel industry and shows the signs of an excellent last quarter. The last month definitively places France in the position of achieving the record registered in 2000 (+9.4%). Super-economy hotels continue to show much stability in their increase in revenue per room, while economy, midscale and upscale hotels show strong progression in occupancy and average rates -an even more marked increase with each increase in category. At the end of November, the increase in RevPAR reached 9.2% according to the first estimates.
The slight decrease in activity during the second quarter, a consequence of the election period, or the recent social movements only had limited results on the annual figures. In contrast, a number of elements helped with the excellent results registered this year:
- the hotel industry in large metropolises benefited from a strong demand from both business and leisure, which explains most notably the results observed during the summer period despite less than favourable weather conditions
- 2007 was characterised by a good number of high-volume events in Paris, including the Air Show in June, Batimat in November, and of course the Rugby World Cup.
Quarterly variation rates for RevPAR in France in 2006 and 2007
Source : MKG Hospitality's database - official provider of data for hotel chains - November 2007
*Cumulative results for October and November
The French hotel market, the most dynamic of the major European countries
In comparison to its European neighbors, the French market benefited from a clear progression in occupation (+1.7 points) and shared an increase in average rates of almost 6.5% with both Spain and the United Kingdom. The average RevPAR for these other two countries progressed by 6.0% and 7.5% respectively. With an average occupation rate of 77.9%, the United Kingdom asserts its attractiveness more and more each year. Spain also benefits from the activity in Madrid and Barcelona, as well as from Valencia which held the America's Cup.
Germany and Italy, neither of which benefited from high-volume events in 2007 as they did in 2006 (the Football World Cup in Germany and the Olympic Games in Turin), are both behind in activity this year.
These results attest to the great potential for hotel operators in France. Among the most advanced in terms of hotel supply, France still has much to explore in the way of development.
Performance of integrated hotel chains per category in the 5 major European countries
Cumulative results for January through October 2007
Source : Base de données MKG Hospitality - fournisseur officiel des chaînes hôtelières - Décembre 2007
Average Rates and RevPAR expressed in euros (tax included)
For more information, please contact Georges Panayotis at + 33 (0)1 56 56 87 90 georges.panayotis@mkg-group.com
or the Database Department of MKG Hospitality at + 33 (0)1 56 56 87 87 bdd@mkg-hospitality.com
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