MKG Hospitality - Summer 2008 results: Turnover of French hotel chain industry goes beyond the billion euro mark (France)
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MKG Hospitality - Summer 2008 results: Turnover of French hotel chain industry goes beyond the billion euro mark (France)
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Catégorie : Europe - France - Économie du secteur
- Chiffres et études
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• Despite the world’s current gloomy economic situation and downturn in household
purchasing power, initial results for summer 2008 are mostly positive for the French hotel
industry.
• In July and August 2008, hotel chains’ lodging turnover rose by 4% compared to the
corresponding period last year to reach nearly 1.1 billion euros.
• On a national level, global Occupancy Rate decreased by 1.9 points. However, this could
be attributed to 2007’s remarkable summer, when Occupancy Rate increased by 3.8 points
in July and 2.9 points in August compared to 2006. In 2008, Occupancy Rate remained
rather high – an average of almost 73% over the two summer months. As a result,
improvement in Average Daily Rates was experienced (+5.0%), leading to an overall
increase in RevPAR (2.4%).
• Strong chain hotel presence in main cities allows them to benefit from urban tourism
developments. As such, the drop in summer Occupancy Rate is less severe in Paris and
Ile-de-France (1 point and 1.9 points, respectively), compared to the rest of France (2.1
points). Withstanding August’s difficulties, Occupancy Rate in Paris remained over 80%
during this period.
• Enduring global economic decline, the 4-star hotel segment is benefiting from development
in emerging market clientele, maintaining an Occupancy Rate similar to 2007’s level (over
75% nationwide). Although other categories reveal a more significant drop of the
occupancy, a better management of the clientele mix continues to guarantee RevPAR
growth.
Performance of corporate operated hotel chains in France by category
Monthly results - August 2008 - First estimations
Occupancy rate Change OR
(pts) ADR Change ADR
% RevPAR Change
RevPAR %
0*/1* 74,9% -2,3 41,0 5,6% 30,7 2,4%
2* 69,8% -1,9 63,2 3,6% 44,1 0,8%
3* 65,2% -4,2 88,4 4,8% 57,6 -1,5%
4* 73,4% -0,3 209,4 2,4% 153,7 2,0%
GLOBAL 70,5% -2,4 83,8 4,2% 59,1 0,8%
Source: MKG Hospitality Database – official supplier to hotel chains - September 2008
Average Daily Rates and RevPAR in euros, including VAT.
Performance of corporate operated hotel chains in France by region
Monthly results - August 2008 - First estimations
Occupancy rate Change OR
(pts) ADR Change ADR
% RevPAR Change
RevPAR %
Paris 77,8% -1,4 130,9 4,6% 101,9 2,7%
Ile-de-France* 62,9% -2,3 63,7 5,1% 40,1 1,4%
Province 71,7% -2,7 78,5 3,2% 56,3 -0,5%
GLOBAL 70,5% -2,4 83,8 4,2% 59,1 0,8%
Source: MKG Hospitality Database – official supplier to hotel chains - September 2008
Average Daily Rates and RevPAR in euros, including VAT.
* outside Paris
Performance of corporate operated hotel chains in France by category
Cumulated results of the summer season (July and August 2008) - First estimations
Occupancy rate Change OR
(pts) ADR Change ADR
% RevPAR Change
RevPAR %
0*/1* 76,8% -2,0 40,8 5,3% 31,3 2,6%
2* 72,0% -1,6 64,2 4,6% 46,3 2,4%
3* 67,7% -2,8 90,1 6,0% 61,0 1,7%
4* 75,1% -0,5 207,3 3,7% 155,6 3,0%
GLOBAL 72,6% -1,9 84,2 5,0% 61,1 2,4%
Source: MKG Hospitality Database – official supplier to hotel chains - September 2008
Average Daily Rates and RevPAR in euros, including VAT.
Performance of corporate operated hotel chains in France by region
Cumulated results of the summer season (July and August 2008) - First estimations
Occupancy rate Change OR
(pts) ADR Change ADR
% RevPAR Change
RevPAR %
Paris 80,4% -1,0 135,3 5,1% 108,8 3,8%
Ile-de-France* 68,1% -1,9 66,3 5,9% 45,2 3,0%
Province 72,8% -2,1 77,3 4,5% 56,3 1,6%
GLOBAL 72,6% -1,9 84,2 5,0% 61,1 2,4%
In July and August 2008, lodging turnover in the hotel industry increased by 4%, positive
results considering 2007’s summer season performance.
Ironically, 2007’s dismal summer weather conditions boosted French chain hotel results, as
tourists opted for large cities to take advantage of the various cultural offerings. Chain hotel
RevPAR increased significantly in July and August 2007, by 10.8% and 9.4%, respectively,
thanks in large to an obvious improvement in Occupancy Rate (+3.8 points and + 2.9 points).
First results for summer 2008, provided by MKG Hospitality’s daily observations, suggest
satisfactory results. Although Occupancy Rate slightly decreased (-1.9 point), it remains high,
reaching an average of 72.6% for the two summer months.
Meanwhile, Average Daily Rates increased by +5.0%, consequently driving a +2.4% growth in
RevPAR. In a market where hotel supply has been reinforced, turnover produced by hotel chain
lodging activity in July and August 2008 has risen by 4% to more than one billion euros, a very
good result compared the previous year, which was already very strong.
Growth in Average Daily Rates demonstrates the favourable evolution in clientele mix, as well
as better commercialisation and an increase of recognised rates. Development of emerging
markets increases the volume of rooms sold to the most profitable clientele segments.
Moreover, progress in online sales and its tools in recent years have contributed to the spread
of yield management and reinforce its efficiency. This price increase came along with the recent
improvement of hotel products (new room design, concepts or new brands). Nevertheless, the
French hotel industry is one of the most affordable in Europe, due to its hotel supply structure
and the significant development of its budget supply.
This summer, July 2008 proved to be the most dynamic. According to first estimations of the
month of August, there was a more moderate change in performance indicators: Occupancy
Rate down by 2.4 points (versus -1.3 points in July), Average Daily Rates up by 4.2% (versus
+5.8%), a stable RevPAR (+0.8% versus +4.0% in July). We can particularly observe a greater
decrease in Occupancy Rate for 3-star hotels (-4.2 points in August, -1.5 points in July).
Hoteliers opted for more profitable clientele, who accepted higher average daily rates,
especially in Paris (more than 8% in July and August for 3-star category) to the detriment of
Occupancy Rate.
Development of urban tourism and growth in clientele volume from emerging markets
offer a bonus to Paris’ hotel industry.
Today’s major consumer trends related to tourism products (development of urban tourism and
clientele from emerging markets) stimulate Paris’ hotel industry. In the summer of 2008, the
drop in the Occupancy Rate was less significant than elsewhere in France (-1.0 points versus -
1.9 points in Ile-de-France and -2.1 points in the provinces). Occupancy Rate levels in Paris
remain over 80%, thanks to the presence of both strong leisure and business clientele.
Whilst nothing in the results during the previous months makes it possible to foresee any
eventual turnaround in the trend due to high Occupancy Rate levels, doubts remain concerning
the maintenance of the drop in occupancy during the last months of the year and the capacity to
sustain Average Daily Rates growth within worldwide economic difficulties.
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