August’s results were generally good, particularly at the higher end of the scale (Midscale and Upscale). Additionally, the majority of destinations posted an increase in RevPAR, driven by higher occupancy. The coast and certain cities did, however, suffer somewhat; a stark reminder of a complex and fragile market.
Occupancy and RevPAR growth – let’s not deny ourselves some pleasure: August finished on an encouraging note that helped boost morale further to month after month of stagnation or decline.
RevPAR grew in August – a trend observed throughout all categories. Growth was modest for Super-budget and Budget hotels, but was more evident higher up the scale. Consequently, RevPAR for Super-Budget hotels grew by just over 1%, compared to 4% for Midscale hotels and 10% or more for Upscale and Luxury hotels. This growth was essentially driven by higher occupancy, since average rates remained under pressure.
These good results are even more appreciated since – as emphasised by Olivier Petit, Associate, In Extenso THR – the pattern is repeated pretty much throughout France. However, this does not mean everywhere, since a number of specific features and exceptions can be noted.
Luxury hotels in Paris and on the Côte d’Azur recorded a contrasting evolution in occupancy, but benefited from significant increases in average rates. A minority in France – in terms of the volume of rooms – these properties benefitted from the arrival of guests from the Middle East, who preferred to visit France in August, rather than July, due to Ramadan. In terms of keys, a higher proportion of suites were sold , resulting in higher average rates.
Another exception was the coastal sector. In contrast to commonly-held preconceptions, the regional hotel industry is not actually driven by seaside hotels. These properties mainly recorded a drop in trading, largely due to the bad weather during August. The only exception to this was the Normandy coastal market that benefitted from the World Equestrian Games that took place there this year. Held every four years, the Games are one of the most important equestrian events on the planet, attracting participants and tourists from all over the world.
Last but not least, even though the situation differed from one destination to the next, August’s results were generally positive for the urban hotel market. Occupancy grew, even if it was often to the detriment of average rates. Hotels in a number of large cities experienced increases in RevPAR – given the bad weather, tourists tended to favour city breaks. This factor helped certain cities such as Lille, Marseille or Nantes, to avoid posting sharp declines further to excellent 2013 results.
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