Market Reports

Start of Ramadan Impacts Upscale Hotel Segment in France

Since 2010, Ramadan has been encroaching on the summer season and disrupting the habits of the Middle- Eastern clientele of French palaces who are traditionally fond of Paris and the French Riviera in the summer, especially in August.

MKG Hospitality The figures reported by MKG clearly show the effects of this departure of customers on the upscale hotel segment in France.

Over the past three years, luxury hotels of the capital and the Riviera posted a drop in their Revenue per available room (the indicator combining occupancy rate and average daily prices) while Ramadan was approa- ching, which corresponds to the departure of Middle-Eastern clients. This phenomenon is the result of a drop in occupancy rates, closely followed by dropping average daily prices, one week before Ramadan, particularly explained by Muslim clients needing to be home at this time of year. Visitors from the Middle East thus leave their place to a clientele with less purchasing power.

Graph - Luxury Hotels RevPar in Paris and on the Riviera

The same phenomenon is emerging in the 2013 year, with a drop in average daily prices and attendance for luxury hotels in Paris and the Riviera in the first week of July. The 7th of July, three days away from Ramadan, occupancy rates dropped by 14 points as compared to the same date last year, as the beginning of the fast was further away. Average daily prices post a drop of about 9% during the week preceding Ramadan 2013.

The figures published by MKG Hospitality thus show that Middle-Eastern tourists adapt their vacation time in France to the Muslim calendar, as was the case in 2010. When Ramadan lasted over August, these clients made their journeys in July. One can therefore speculate on the inverse phenomenon this year with the return of Muslim clients in August, after the end of Ramadan.

MKG Hospitality's Georges Panayotis comments : "Middle Eastern clientele is a veritable engine for luxury hotel activity and contributes to the persistent strength of the great French luxury hotels, such as in Paris and the Riviera. This engine is today jeopardized by the announce of increasing VAT taxes and of a tax on luxury hotels, which could chase away clients to destinations other than France".


For further information, please contact:
MKG Group, Vanguelis Panayotis, Chief Development Officer
T. : +33 (0)1 56 56 87 87
F. : +33 (0)1 56 56 87 88
email: v.panayotis@mkg-group.com



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