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 Monthly Corporate Hotel Chain Results in France
for June 2004; Rise in RevPAR Reached 3.9%

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Paris, 5 August 2004

In June 2004, hotel results indicated the continuation of the turnaround in the French hotel industry, with a 2.4% rise in RevPAR. During the first semester, the rise in RevPAR reached 3.9%.

The budget categories stimulated growth in RevPAR by the increase in average daily rates, despite a slight drop in the occupancy rates.

The midmarket and upmarket hotel industry conceded to a slight fall in average daily rates in order to improve hotel occupancy. These strategies have been fruitful, since the RevPARs are positively oriented.

Monthly corporate hotel chain results by category
in France in June 2004

Occupancy rate 06/04
Difference in Occ. Rate (pts)
Average Daily Rate 06/04
Change in ADR%
RevPAR 06/04
Change RevPAR%
0*
79.7%
-1.2
29.5
4.4%
23.5
2.8%
1*
80.6%
-0.3
37.3
2.7%
30.1
2.3%
2*
78.3%
0.2
58.3
1.6%
45.7
1.9%
3*
75.5%
3.0
86.4
-2.4%
65.2
1.6%
4*
72.6%
2.9
190.4
-4.0%
138.2
0.0%
GLOBAL
77.3%
0.9
75.3
1.2%
58.2
2.4%
Source: MKG Consulting Database - Official statistics supplier for hotel chains - July 2004 
Average daily rates and RevPAR are expressed in euros inclusive of tax 

Compared to the monthly assessments previously released by MKG Consulting, the rise in RevPAR of 2.4% observed in June 2004 may appear deceiving (+8.1% in March, +3.5% in April and +8.5% in May). It is nevertheless necessary to keep in mind that these recent increases in monthly RevPAR, moreover in March and in April, may be attributed for a large part, to the highly unfavourable situation last year (beginning of the war in Iraq, SARS).

In addition, the change registered in June was less spectacular than in May, though certainly translated better the overall reality that characterises the French markets: that of a pick-up in activity, slow, but effective, after a highly stable month of January, and a month of February that was down versus last year (-1.6% change in RevPAR).

The first semester of the year was rather positive for French hoteliers. RevPAR rose by 3.9% versus the first semester of 2003 to hit 46.7 euros. The occupancy rates were stable, rising by 0.7 points. The average daily rates saw an overall rise of 2.9%, following the evolutions of each of these categories and the modifications of the categorical structure of the hotel supply over the years, increasing the weight of the upmarket hotels.

This increase seen in the first semester resulted from different RevPAR optimisation strategies depending on the categories. The budget categories, notably hard-budget hotels (0* and 1*), saw average daily rates sustain growth in RevPAR, situated between 2.6% in 2* and 4.4% in 0*. Due to a large increase in supply in preceding years, occupancy rates in these types of hotels saw a definite slide in recent months.

The 3* and 4* segments owe the increase in their results to the clearly improving occupancy levels (+1.8 points in 3* and +3.2 points in 4*). Because of this, activity figures are up, and the average daily rates of 3* and 4* hotels increased in total by the end of June.

Results of the corporate hotel chain industry in by category
in France, from January to end of June 2004 

Occupancy rate 06/04
Difference in Occ. Rate (pts)
Average Daily Rate 06/04
Change in ADR%
RevPAR 06/04
Change RevPAR%
0*
71.4%
-0.8
28.9
5.5%
20.7
4.4%
1*
71.7%
-0.4
36.8
4.0%
26.4
3.5%
2*
66.6%
0.0
56.8
2.6%
37.8
2.6%
3*
61.8%
1.8
84.1
-0.7%
52.0
2.3%
4*
60.4%
3.2
174.1
-2.3%
105.1
3.1%
GLOBAL
66.0%
0.7
70.8
2.9%
46.7
3.9%
Source: MKG Consulting Database - Official statistics supplier for hotel chains - July 2004 
Average daily rates and RevPAR are expressed in euros inclusive of tax

During the course of this period, the region of Ile-de-France recorded changes corresponding to the national average (+3.9). The situation was nevertheless rather contrasted between the capital, which saw its customers return to the city centre (+3.0 points), due to an availability, which remains rather high, and the rates, which remain affordable. This is true when compared to the other European capitals, mainly in the budget and midmarket categories, and the departments surrounding the capital - where hoteliers are obliged to concede with drops in rates in order to retain their customers.

In the provinces, certain regions saw very positive changes. This is notably the case in Lower Normandy, which was able to benefit from efforts surrounding the D-day commemorations (+10.1% increase in RevPAR). This is notably the case in the regions of Pays de Loire (+11.2%) and Nord-Pas-de-Calais (+8.8%). Lille profited from its status as the European Cultural Capital and its related events.

Nevertheless, these results, within a context that is improving that does not yet lead one to euphoria, demonstrate the strong reactivity of professionals in the sector. Faced with a drop in demand, they have been able to adapt to the expectations of new market niches that they have sought to develop in order to replace customers (notably international) that have been missing because of reducing costs, concerns related to the tense international context or due to the economic slowdown in recent months.

Professionals also note a change in reservation habits of customers that are increasingly using the internet. These changes in the business mix and the emergence of new sales methods play a role in the lowering of average daily rates, notably in the midmarket and upmarket segments. However, these sales policies seem to have been fruitful, since they have allowed ending the semester with an increase in RevPAR.

However, the game is far from over, notably in that which concerns "leisure" customers. The summer season is turning out to not be very favourable for the hotel industry, which is competing with emerging destinations (Croatia, Maghreb), and punished by the high cost of the Euro. The summer results concerning "leisure" customers and those of autumn for the "business" sector will be decisive for making 2004 the year of recovery for the sector.

Methodology

The European database of MKG Consulting contains a sample of 6,000 corporate chain hotels representing 600,000 rooms in Europe. The data, gathered monthly from each hotel, is redressed by categorical division of the corporate chain hotel supply and by weight in the European Union. 

MKG Consulting has the largest hotel database in the world outside the USA, with a good representation of all the 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: European Hotel Industry Sees Fourth Consecutive Month of Rising Monthly RevPAR; The First 6 Months of 2004 A Mixed Assessment / MKG Consulting / Aug 2004
Monthly RevPAR of the 25-Nation European Hotel Industry Rose by 5.2% in May 2004, Recovery Continues / MKG Consulting / July 2004
French Chain Hotel Performance On the Rise, May 2004 RevPAR Up +8.5% Over Previous Year / MKG Consulting / June 2004
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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