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In August 2004, RevPAR Drops 2.1%
for the French Hotel Industry
Paris, 27 September 2004
  • In August, results of the French hotel industry follow the same trend as observed in July. Indicators indicate a drop in the overall activity (-2.1% in RevPAR versus August 2003). However, the cumulative results over 8 months at the end of August show that RevPAR held itself up at +2.2% versus 2003.
  • Ile de France, and Paris in particular have seen a particularly delicate month of August. The drop in occupation was accompanied by a very costly price war in terms of RevPAR (-8.8% in the city of Paris).
  • On the other hand, certain regions did well, with results that are up versus August 2003. This is notably the case along that Atlantic coast and the region of Midi-Pyrenees.
Change in RevPAR - France
August 2004  -2.1%
July 2004 -1.1%

Monthly corporate chain hotel results
per category in France in August 2004

Occupancy rate 08/04
Diff. in Occ. rate (pts.)
ADR

08/04

Change in ADR (%)
RevPAR 08/04
Change in RevPAR (%)
0*
79.8%
1.0
30.4
5.0%
24.3
6.4%
1*
75.0%
-1.7
39.5
3.2%
29.7
0.9%
2*
65.8%
-1.3
57.7
1.8%
38.0
-0.2%
3*
63.0%
-3.1
77.8
-2.6%
49.0
-7.2%
4*
58.1%
-3.3
197.4
0.1%
114.8
-5.3%
TOTAL
67.5%
-1.7
71.8
0.4%
48.5
-2.1%
Source: MKG Consulting Database - Official supplier of hotel chains - September 2004
Average Daily Rates and RevPAR given in Euros inclusive of tax 

A second consecutive month of decline in RevPAR

The month of July already marked a sudden halt in the recovery, nonetheless well underway since the month of May. In the month of August, the change in trend was observed. 

Thus, in all hotel categories combined, the drop in the occupancy rate was noticeable, -1.7 points. It was over 3 points in the midmarket and upmarket categories. With average room rates that were stable over the years, revenue per available room posted a drop of 2.1% to 48.5 euros.

In addition, one sees a shift in occupancy among the categories, which also shows financial concerns on the part of tourists. In particular, the midmarket segment saw a share of its customers drawn to the lower rates of two stars for services that are continually improving. Also, while the average daily rates are stable or even rising in the budget and upmarket segments, 3* hotels posted a drop from one year to the next.

Results of the corporate chain hotel
industry per category in France 
total over 8 months as of the end of August 2004

Occupancy rate 08/04
Diff. in Occ. rate (pts.)
ADR

08/04

Change in ADR (%)
RevPAR 08/04
Change in RevPAR (%)
0*
73.6%
-0.7
29.3
5.1%
21.6
4.1%
1*
72.8%
-0.8
37.5
3.8%
27.3
2.7%
2*
66.8%
-0.4
57.0
2.2%
38.0
1.5%
3*
62.5%
1.1
82.7
-1.2%
51.7
0.6%
4*
60.4%
2.2
176.3
-3.1%
106.6
0.5%
TOTAL
66.7%
0.2
70.8
2.0%
47.2
2.2%
Source: MKG Consulting Database - Official supplier of hotel chains - September 2004
Average Daily Rates and RevPAR given in Euros inclusive of tax

Over the first 8 months of the year, the change in total RevPAR was still however greater than 2%. All categories posted rises in RevPAR, even though they were relatively small in the midmarket and upmarket segments. 

A crucial fall season for the Paris hotel industry

The drop in activity was noticeable in practically all regions, though it was clearly more moderate along the Atlantic coast and in the West of France. Some large cities even posted very honourable results, such as Bordeaux and Toulouse.

Ile-de-France did not escape the drop in activity, accented by a highly pronounced price war, both in the capital and in the surrounding Departments. This degradation in RevPAR weighed heavily upon the national average, while overall, the provinces managed to maintain a slight rise of 0.2%.

The months of July and August were therefore deceiving for tourism professionals after the disappointments of the year 2003 and a good beginning to 2004.

In this context, September and October will take on a crucial role for putting the hotel sector on the track to growth, Paris in particular, where one is waiting to see from the many conventions and expositions and notably the World Automobile Expo that has just begun.

Results of the corporate chain hotel
industry in France in August 2004 

Occupancy rate 08/04
Diff. in Occ. rate (pts.)
ADR

08/04

Change in ADR (%)
RevPAR 08/04
Change in RevPAR (%)
Paris
64.0%
-3.6
108.8
-3.6%
69.6
-8.8%
Ile de France
56.7%
-0.3
52.8
-4.1%
29.9
-4.7%
The provinces
71.8%
-2.0
69.5
3.1%
49.9
0.2%
France
67.5%
-1.7
71.8
0.4%
48.5
-2.1%
Source: MKG Consulting Database - Official supplier of hotel chains - September 2004
Average Daily Rates and RevPAR given in Euros inclusive of tax
Methodology

The MKG Consulting Database contains a sample of 10,000 corporate chain hotels, representing 1,000,000 rooms throughout the world. MKG Consulting has the largest hotel database in the world, outside the USA, with a good representation of all hotel segments.

Contact:

Georges Panayotis
+33 (0)1 56 56 87 90
georges.panayotis@mkg-consulting.com
http://www.mkgconseil.com
Also See: In July, the Average Occupancy Rate for the French Hotel Industry Drops / MKG Consulting / September 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
Monthly Corporate Hotel Chain Results in France for June 2004; Rise in RevPAR Reached 3.9% / MKG Consulting / Aug 2004
2004 Rankings of the 10 Largest International Hotel Groups and the 20 Largest Brands; InterContinental Hotels Group Overtakes Cendant / MKG Consulting / March 2004
Monthly RevPAR of the 25-Nation European Hotel Industry Rose by 5.2% in May 2004, Recovery Continues / MKG Consulting / July 2004


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