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Results of the French Hotel Industry Boosted by 4* Paris Hotels | MKG Reports

Hotel Booking After a mitigated summer season, spring appears much more favourable for the French hotel industry. The rise in RevPAR in all categories combined reached 5.0% in October 2004.

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Cheap Hotel Exhibitions boosted business in Paris, in the 4* category in particular, which saw its RevPAR rise by 16.1% versus 2003, despite a high euro/dollar exchange rate, and a lack of American customers on business travel during the election season.

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Flight Booking In total, from January to October, RevPAR rose by 2.8%. At the end of 2004, the rise in RevPAR should erase the 2.4% drop experienced in 2003.

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Travel Agent Unless some unforeseen incident occurs, the rise for 2004 will be inline with forecasts published by MKG Consulting in the beginning of the year, estimating RevPAR growth to be between 2% and 4% for this year.

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Hotel Chicago Average daily rates up by 5.7% - The end of 2003 was particularly delicate, and it is logical to observe an improvement in revenue per available room in October 2004. At the national level, the occupancy rate of French chain hotels was nonetheless down by 0.5 points over last year. Only the 4* category, which registered a 4.6-point drop in occupancy between 2002 and 2003, saw its occupancy rate rise in October to thus recover some of the loss conceded last year: +1.8 points to 69.3%.

Online Booking The good overall results from the month of October come from highly favourable results in the average daily rates. Thus, operators of the budget categories are holding steady on their RevPAR optimisation strategies through increasing average daily rates. Despite the fall in occupancy rates, the rises in average daily rates reached 6.2% in 0* and 3.7% in 1*. The upmarket units, for their part, also registered a significant rise in average daily rates (+6.8%). This increase counteracts in part the drop in ADR at the end of 2003 for the 4* category. The intermediary categories, 2* and 3*, registered less satisfactory rises in their average daily rates, by +1.1% and +2.0% respectively. As a result, the 2* category is the only to have recorded a drop in RevPAR over last year by -0.6%, while upmarket hotel saw the highest rise, at +9.7%. 4* Paris hotels have not seen such a rise since the month of April, despite a very high euro/dollar exchange rate and a presidential election period in the United States that traditionally sees fewer business travellers. These results indicate the quality of the upmarket hotel industry in France and its capacity to adapt to adverse events.

Travel Health Insurance Exhibitions stimulate business in Paris - The month of October, traditionally consecrated to business activity, benefited from a pick up in activity in business zones. This is particularly true in Paris, in the 4* category, where results saw the strongest rises. The increase in RevPAR in the city was sustained, in particular by the success of the fall exhibitions. Within Paris, RevPAR of the upmarket hotel industry thus registered a rise of 16.1% versus 2003 with a rise in occupancy rates by 7.5 points and average daily rates by 4.9%. In all categories combined, RevPAR grew by 13.1% in the capital.

Hotel Reservation A transitory year for the 3* and 4* hotel industry - Results for the month of October confirm the positive trend in the medium term for hotel results in France. In the YTD as of October, occupancy rates were even (+0.2 points), the growth in supply kept up with the growth in demand. Average daily rates once again rose overall (+2.6%). This, RevPAR increased by 2.8%. Changes in average daily rates were steady in the budget categories.

London Hotel Booking In the midmarket and upmarket segments, drops conceded to stimulate demand and react to changes in business mixes were less pronounced over the months. However, the persistence of the low value of the dollar weighed upon the return in hotels in the euro zone where the spending power of its customers is labelled in dollars. This year has been about adjusting the average daily rates to changes in the environment, of adapting pricing policies to a more European clientele with a lower buying power. 2004 is thus characterised as a transitional year. While it is true that these changes translate into RevPAR levels that are below those of two years ago overall and in the 3* and 4* categories, the path to recovery in the business indicators seems to finally have been found.

Discount Travel Therefore, the changes observes in 2004 are perfectly in line with forecasts published by MKG Consulting in the beginning of the year and which demonstrates a rise in RevPAR between 2% and 4% over 2003.

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