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French Chain Hotel Performance On the Rise, May 2004 RevPAR Up +8.5% Over Previous Year / MKG

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French hotel activity in May 2004

Paris, 21 June 2004 - Last May, all French chain hotel performance indicators, in all categories, were on the rise, with the sole exception of a price-stabilisation in the 3-star category. With a +8.5% rise, revenue per available room (RevPAR) saw its strongest growth since the crisis following September 11th 2001. 

The return to normal activity partly explains the recovery over May 2003, which was marked by a significant drop. But more than ever, the reduced number of vacation days off ("ponts") allowed hotels to better profit from active workdays. 

The budget hotel categories continued their constant increases in average room rates, though this time managed to combine it with an improvement in occupancy rates, which had recently been drawn downwards.

The midmarket hotel industry clearly improved occupancy, though at the expense of a stability in average room rates at the national level. The situation is quite different between the suburbs of Paris, Paris and the provinces. In the suburbs of Paris, hotels post very attractive rates to attract customers from the capital. Activity was satisfactory in Paris, and results were strongly up in the provinces.

The aggressive sales policy of upmarket hoteliers has been fruitful, with the successful replacement of customers that are still absent. The drop in rates, systematic since last summer, seems to be held in check, which has had a highly beneficial effect on RevPAR.
 
 

1 - Monthly chain hotel results for May 2004

Occupancy rates May 2004
Change 
2004/2003
(in Pts.)
ARR for May 2004
(in Euros VAT)
Change 
2004/2003
RevPAR 
May 2004
(in Euros VAT)
Change
2004/2003
0*
75.3%
+0.6
28.8 
+5.9%
21.7 
+6.8%
1*
76.6%
+1.9
37.4 
+3.6%
28.6 
+6.3%
2*
71.4%
+3.1
57.1 
+3.0%
40.8 
+7.7%
3*
66.3%
+4.6
83.8 
-0.7%
55.5 
+6.8%
4*
63.8%
+4.3
200.6 
0.1%
128.1 
+7.3%
France
70.3%
+3.0
74.4 
+3.8%
52.3
+8.5%
MKG Consulting – June 2004

Official statistics of hotel groups

The month of May continued the recovery trend in activity in the hotel sector, with a rise of +8.5% in revenue per available room. This result continues the trend with a clear improvement observed since last March. This performance is all the more telling of a veritable pick-up in activity, since May 2003 was not as strongly affected by international events as much as was March and April 2003. The bank holidays on May 1st and 8th fell on Saturdays, and so Business activity was less perturbed than was the case last year, with the additional vacation days taken. This strongly benefited urban chain hotels. The rise in RevPAR in May 2004, +8.5% was the strongest since the tragic events of September 11th 2001. It was mainly held up by the two growth engines: improved occupancy rates, average room rates.

2 - Aggregate chain hotel results from January 2004 to end of May 2004

Occupancy rates end May 2004
Change 
2004/2003
(in Pts.)
ARR for end May 2004
(in Euros VAT)
Change 
2004/2003
RevPAR 
end May 2004
(in Euros VAT)
Change
2004/2003
0*
69.7%
-0.7
28.7 
+6.1%
20.0 
+5.0%
1*
70.0%
-0.3
36.7 
+4.5%
25.7 
+4.1%
2*
64.3%
0.0
56.5 
+3.0%
36.4 
+3.1%
3*
59.0%
+1.5
83.6 
-0.2%
49.3 
+2.5%
4*
57.6%
+2.9
169.8 
-2.0%
97.8 
+3.1%
France
63.6%
+0.6
69.7
3.3%
44.4
+4.2%
MKG Consulting – June 2004

Over the first five months combined of 2004, indicators also improved significantly, though displayed differences between the budget hotel sector and the higher segments. The former still underwent a drop in occupancy due to negative effects of the 35-hour workweek, though it nevertheless did not lower rates. For its part, the upmarket hotel industry was commercially more aggressive and gave preference to a rise in occupancy and miscellaneous hotel income, therefore sacrificing its average room rate even more.

3 - Regional chain hotel results for May 2004

Occupancy rates May 2004
Change 
2004/2003
(in Pts.)
ARR for May 2004
in Euros VAT)
Change 
2004/2003
RevPAR 
May 2004
in Euros VAT)
Change
2004/2003
Paris
72.3%
+4.6
126.5
+1.9%
91.5
+8.8%
Ile de France excluding Paris
67.0%
+2.5
60.6 
-4.3 %
40.6
-0.5%
France 
excluding Ile de France
70.9%
+2.7
66.4 
+7.7%
47.1 
+11.9%
MKG Consulting – June 2004

At the national level, all French Regions recorded more or less a rise in RevPAR. Only seven French Regions did not post a two-figure rise: Ile de France (+5.8%), Rhône-Alpes (+5.3 %), Brittany (+4.6 %), and Burgundy (+2.6 %). Concerning Ile de France, the situation was rather evenly split between the capital, which pulls in customers to the city centre (+4.6 points in occupancy rate) since availability is still high there, with prices that remain low in comparison with other European capitals, and the suburban departments around Paris where hoteliers are obliged to accept drops in rates in order to maintain their customers.

MKG Consulting indicated last March that the growth in revenue per available was expected to rise for all of 2004 within the bracket of 2% to 4%. The first five months, strongly marked by a pick-up in activity over 2003, hints that this forecast is correct, by being in the very high end of this bracket. The conclusion of MKG Consulting is that this trend shall continue, despite a lack of visibility denounced by all operators for the months to come, and the incertitude concerning a rate of economic growth beyond 2%.

Methodology
The activity results of this survey cover a sample of 2,950 corporate chain hotels in France representing 232,000 rooms. The results, gathered monthly and per hotel, are redressed by the categorical breakdown of the chains. MKG Consulting has the largest hotel database in the world outside the USA, with the best coverage of all hotel segments.

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Contact:

Georges Panayotis
+33 (0)1 56 56 87 90
georges.panayotis@mkg-consulting.com
http://www.mkgconseil.com

 
Also See: The 2004 Ranking of Hotel Groups; Including the Ten Hotel Groups with the Greatest Increase in Number of Rooms / MKG Consulting / June 2004
RevPAR of Chain Hotels in France Rose by 8.1% in March 2004 / MKG Consulting / May 2004
2004 Rankings of the 10 Largest International Hotel Groups and the 20 Largest Brands; InterContinental Hotels Group Overtakes Cendant / MKG Consulting / March 2004
2004 European Ranking of Hotel Groups; Best Western Holds Top Position of 25 Brands in Europe / MKG Consulting / February 2004
Despite One of the Worst Years in International Tourism, the French Hotel Industry Managed to Record Only a Moderate Drop in RevPAR in 2003 / MKG Consulting / January 2004
RevPAR Falls 2.9% for the European Hotel Industry for 12 Months through November 2003; Austria Rises 6.1% in RevPAR / MKG Consulting / January 2004
European Budget Hotel Industry Shows Growth in RevPAR; Not as Cheerful in the Other Hotel Segments / MKG Consulting / November 2003
European Hotel Chains: New Downward Slide in July, 2003 / MKG Consulting / Sept 2003
Finally a Month of Strong Rises in the German Hotel Industry / MKG Consulting / July 2003
Hotel Industry in Europe: Record Drop in the RevPAR in April 2003, But Slight Decrease of the Mid-term Trend / MKG Consulting / May 2003
The Worldwide Ranking of Hotel Groups 2003; The World’s Top Ten International Groups Increase Their Supply by 2.6% / MKG / April 2003
The French Hotel Industry Confirms its Solidity in 2002 and Serenely Forecasts a Year 2003, Despite Geopolitical Instability / MKG Consulting / Feb 2003
European Hotel Industry: Like Last Year, France is Doing Better than all its European Neighbours in 2002 / MKG Consulting / Jan 2003
European Hotel Industry: An Encouraging Month of October / MKG Consulting / Dec 2002
Europe’s Hotel Industry: France Posts Record Performance for September, 2002 / MKG Consulting / Oct 2002
Assessment of the Summer Season for the European Hotel Industry / MKG / Oct 2002


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