Hotels: a record year despite industrial action 

Presented by Deloitte in extenso, the results for the French hotel industry in 2018 demonstrate the sector's excellent performance. And that's despite the strikes and the yellow waistcoat movement.
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The Paris hotel industry broke records, despite a December disrupted by the yellow waistcoat movement. Paris Tourist Office - Photographer: Marc Bertrand

And yet the French hotel industry is still going strong. In a turbulent social climate, it even broke records in 2018. Strikes at SNCF and Air France in the spring, the yellow waistcoat movement at the end of the year: all these factors did not prevent the industry from posting clear growth in revenue per room (+6.4 1TP3Q) according to Deloitte In Extenso. Whereas in 2017, hoteliers adopted a measured strategy in the face of the rebound in visitor numbers, the continued rise in occupancy rates in 2018 (+1.4 pt) resulted in a significant rise in average prices (+4.9 %). Paris and the provinces combined, from the mid-range segment to luxury hotels, growth in revenue per room reached or exceeded 7 %. With less room for manoeuvre in terms of rates, budget hotels recorded an increase of 5.4% in 2018.

Long the driving force in the sector, the Paris hotel industry had left this role to provincial establishments in the wake of the 2015 attacks. However, following the improvement seen last year, the capital has regained its superb reputation, with RevPAR up by 11.6 %, and average attendance approaching or exceeding 80 %. As a result, the sales of the capital's establishments have returned to growth. its 2014 levelWith the exception of the palaces, where competition is increasingly fierce. The number of rooms rose by 33 % between 2014 and 2018 with the opening of the Peninsula in 2015, followed by the reopenings of the Ritz, the Crillon and more recently the Lutetia. The hotel sector on the outskirts of Paris is also in good health, with an upward trend since 2014 (+11%), helped by growing business demand.

Be that as it may, it was obviously the higher-end and luxury segments that benefited most from this upturn in form. Business was driven by both business and leisure travellers from around the world, as well as by major events such as the Paris Motor Show and the Ryder Cup golf tournament. As a result, four- and five-star establishments were able to adopt an ambitious pricing policy. The average price rose by 9 % across all segments. The Paris hotel industry could undoubtedly have gone even further without the many "acts" of the gilets jaunes. As a result, upmarket establishments, many of which are concentrated around department stores and the Champs-Elysées, recorded a fall in sales of 4 % in December.

Another major social movement in 2018, strikes at SNCF and Air France disrupted travel in the second quarter. This had an impact on the performance of the provincial establishments, but did not break the bank. the positive dynamic This trend has been underway for several years, driven primarily by business and conference visitors, but also by ambitious tourism policies on the part of regional cities. Among last year's most buoyant cities, Rennes, Nice and Nantes recorded growth in hotel sales of around 8 %. Lyon and Bordeaux, which were unable to take advantage of buoyant events such as SIRHA and Vinexpo, saw more limited growth in revenue per room, while Lille and Marseille were down in 2018.

The growth seen in 2018 should continue, but at a slower pace in 2019. Deloitte In Extenso expects hotel sales to grow by between 2.8 % and 4.2 %. In detail, RevPAR in the luxury category is expected to grow by between 4 % and 5.5 %, and in the top-of-the-range category by between 3.5 % and 5 %. Mid-range hotels should also continue to see strong growth, between 2.5 % and 4.0, as should budget hotels.