Hotel Supply in France: Nothing Begets Nothing
April 4, 2018 11:21am
By Georges Panayotis
Without a doubt the machine is jammed. The French hotel supply has been stable for nearly 15 years. Meanwhile, all other major and competing destinations have largely developed their supplies in the face of globalization and the liberalization of trade and travel. This is true in Germany, Spain, the United Kingdom... It is time to check out and service the engine driving France’s supply before it breaks down for good. For the moment there is a fuel shortage, but care must be taken because the malfunction is getting worse.
While depending on the method – including listed hotels or not, those closed for works, in liquidation, permanently closed or even seasonally closed - figures for the hotel supply may differ... one thing is certain: the long-term trend is indisputable. In the best of cases there is stagnation, in the worst case a decrease, but in all cases, there has been a sharp drop in the hotel supply in suburbs and in small towns due to lack of demand and because of the heavy expenses these hotels must support. France, the world's leading tourist destination, with many treasures and many opportunities, is clearly under duress. Not only is the hotel supply not growing, but the destination is attracting fewer and fewer investors. The rise in property prices, the shrinking of hotels’ operating accounts, the difficulty finding credit and the CDEC law back in its day, largely explain investors' disenchantment with this profession. Rather, we have witnessed its financialization with short-term operations that do not allow for the maintenance, development and healthy growth of the French hotel portfolio.
Destinations such as the Côte d'Azur and Ile-de-France are becoming less attractive to tourists who are heading towards more "in" destinations such as the Catalan coast or cities such as London or Berlin. Because the rest of the world will not go on hold and continues to progress, to innovate, radiating with a dynamism that attracts increasing numbers of visitors.
This year, the suburban budget hotel sector has fallen sharply. Old, out of breath, lacking brand image, this sector is no longer profitable and is sold for social housing. Neighborhoods with a bad reputation (whether usurped or based on reality), difficult access, or services unsuited to the current needs of customers, have gradually got the better of these properties. As for supplies in rural areas, it continues to shrink, visibly threatening the vitality of our countryside because these are sometimes the only economic activities that persist in areas often deserted. Victims of the suppression of signs leading to them, and sometimes badly managed, these truly French pearls are dying a slow death.
The shortage of supply has greatly favored Airbnb in certain destinations. The arrival of the sharing supply and the development of hostels that make commercial accommodations in city centers more affordable are unforgiving. Why travel miles to sometimes underserved neighborhoods to sleep in unattractive establishments when you can stay in the latest fashionable establishment or right in the middle of a trendy neighborhood and have a different experience?
There are no bad tools but bad craftsmen. It is time for everyone to roll up their sleeves and participate in the collective effort get busy. If we do not invest in our destinations, they will not survive. If we do not revitalize our hotel supply with attractive concepts adapted to the needs of our customers, tourists will no longer stay with us. It's obvious, why do basic when you can do simple, accessible, economical and innovative?
It’s quite clear: why stick to basics when it is possible to do simple, accessible, economical and innovative?
Who will take matters into their own hands? Who will seek and find solutions to the French sickness? Is the government ready to mobilize all actors that stand a chance of boosting supply? Everyone must assume their responsibilities, state agencies must support hotel and tourism entrepreneurs instead of abandoning them, as the Caisse des Dépôts et Consignation was able to do by withdrawing from the capital of AccorHotels Group, Belambra, and Club Med for the benefit of Chinese investors. Let’s bet that the French know-how which I hope will serve the development of hotel infrastructures in China will continue to prosper in its country of origin. As for the Qataris, who have invested well in French palaces, which we can only be satisfied with, why not offer facilitate things for French entrepreneurs as well? Why the double standards?
Hoteliers need help playing their role, which is to constantly create and invent to attract customers. One thing is certain, if nothing begets nothing, with no new offer and no new investments, there will be no new market shares in sight and a great risk of losing those we have!
Tags: georges panayotis,
Georges Panayotis is the President & Founder of MKG Group & Hospitality ON.
Born into a family of hoteliers, Georges Panayotis left Greece at the age of 18 to study Political Science and earn a management degree at the University of Paris, Dauphine.
In 1986 he created his own company and started developing specialised marketing tools for the hotel industry.
Over the past 30 years, MKG Conseil, later to become MKG Group, became the leading European consulting firm for the hotel business, food service and tourism industries. He is also a consultant for several radio and television stations that focus on the economy.
Contact: Georges Panayotis
0033 (0)1 56 56 87 77
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