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2011 Was a Fine Year for French Hospitality

The Year-in-Review of the French Hotel Industry by MKG Group

Paris, Tuesday 10th January 2012 - Despite the deficit-crisis amongst European member-states, 2011 confirmed that the previous year’s economic upswing was still in effect, with a 5.5% increase in RevPAR for all categories. This growth is backed by an increase in two indexes: +1.3 percentage points in occupancy rate and 3.4% in average daily rate (ADR). These results are even more remarkable than the upswing that gave rise to 2010 comeback, which faded throughout 2011
As in 2010, upscale categories were more responsible for overall growth (+8.5% in RevPAR in 4* & 5*) than the economy sector. Nevertheless, 0*, 1* and 2* categories did boast solid results. RevPAR in the budget sector (0*/1*) grew by +4.3% and economy (2*) by +3.3%, as opposed to their previous-year results, +1.9% and +1.1% respectively.
Concerning the upscale segment, the slowdown from certain source markets was largely compensated by the dynamic BRIC market, especially Brazilians and Russians. The Middle-Eastern clientele also remains quite present. Even if Ramadan happened early this year, the visitors who did not stay in palaces in August because of the Muslim feast, instead came during June and July, which eventually compensated for each other in the end.
In the economy sector, the domestic market remained very active despite the crisis which lowered everyone’s morale, as well as the economy sector’s figures. The restructuring of the economic hotel industry is well underway, thanks to the renovation taking place over the past few years as well as the new concepts that hotel groups are rolling out. This steady improvement of hotel supply is reflected in the parallel increase of ADR, which demanding customers are willing to accept in exchange for quality service.
The sweeping reform taking place because of the new classification system is responsible for making the industry more dynamic. As the July 2012 deadline quickly approaches, the momentum is getting stronger as hoteliers act to meet requirements. It would be a good idea for public authorities to communicate on the benefits of the classification system so as to motivate hoteliers to continue investing in the creation of new products.
Parisian hotels reap in most of the rewards resulting from the growth in demand, as their occupancy rates surpass an average of 80% throughout the year in Paris-proper. As a result, ADR increased by 6.8% to 154.80 euros VAT incl., for a RevPAR on the rise by 9.6%. The French capital took advantage of an exceptional 2011, particularly thanks to the Air Show at Le Bourget, the biannual Batimat convention, and the largest convention Paris has ever seen which took place last August: the European Society for Cardiology. The city of lights remains popular for both business and leisure clienteles. The success of municipal and cultural events bears testimony to the general public’s infatuation with the French capital. When looking at price lists of European cities, Paris remains a winner, particularly when compared to London, its biggest rival.
Paris will become even more appealing in 2012, when compared to London, because the British capital is hosting the Summer Olympics and the predicted rise in hotel rates are already causing conventions to think twice before booking an event in London. Thanks to its proximity, Paris and other regions in the north of France are already prepared to become “plan B” or alternative destinations.
Whilst the first half of 2011 outperformed our forecasts, the second half was more affected by an uncertain economic environment. Provided, the results of the French hospitality industry in 2011 (remember +5.5) remain conform to the window forecasted by MKG Hospitality at the beginning of the year: around +6%. Therefore, even with a crisis rising at the end of the year, the French hospitality industry remains a dynamic and upward-bound sector.
Thanks Hotel Groups’ hard work in improving supply and distribution, especailly online, 2012 should remain upward-bound. A more detailed analysis of forecasts will be presented on 23 January by MKG Hospitality.

A complete report of 2011 results and hospitality forecasts in France and Europe will be released at a press conference organized by MKG Hospitality on 23 January at the Hotel Meurice.
If you would like to see the table in a PDF format, please click here or copy & paste the link below in your browser:


Established in 1985 by Georges Panayotis, MKG Group has built a solid reputation for business expertise and substantial European-based know-how in the fields of tourism, lodging and food service. MKG Group meets the needs of each of its clients by providing valuable analytical and decision-making skills necessary for success.

For further information , please contact :

MKG Group - International Development Department
Vanguelis Panayotis
T. : +33 (0)1 56 56 87 87

MKG Hospitality - Media Contact
Michael Komodromou
Tel: +44 (0)20 7624 4030


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Also See: MENA Hotel Performances Bounce Back Posting Excellent RevPAR Growth / November 2011

U.S. Hotel Groups Still Dominate at Home with Hilton Leading the Pack; With Market Saturation Nearing, Groups Looking Abroad to Promote Products and Concepts / September 2011

Key Hotel Performance Indicators for the Middle East and North Africa Region (MENA) are Split Down the Middle / September 2011

Middle East & North Africa Hotel Markets End 2010 with Great Disparity, Uneasy Hotel Growth is Forecast / February 2011

Poland's Hotel Industry on Upward Trend with RevPAR and Occupany Steadily Growing / November 2010

The Top 10 Hotel Groups in the World; IHG Retains Top Spot With Nearly 650,000 Rooms / July 2010

The Top 10 Hotel Groups in the World; IHG Retains Top Spot Surpassing the 600,000 Room Mark / May 2009

Top Twenty Hotel Brands in the World at January 1, 2008, Also Top Ten Hotel Groups in the World / April 2008

The 2008 Top 20 European Hotel Brands Ranking and the Top Ten Hotel Groups Ranking / March 2008

Ranking - Top Ten Worldwide Hotel Chains Growth 1995-2005 / October 2005
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