"A recovery everywhere, in all regions and for all categories"This is how Olivier Petit, Tourism, Culture and Hospitality partner at In Extenso, summed up the past year. The firm estimates revenue growth per room at 3.9 % (RevPAR) for the French hotel industry in 2017, with activity mainly driven by hotel occupancy, up by 3.7 %. In comparison, the average price rose by just 0.2 %. "Against a backdrop of recovery, this caution on the part of hoteliers is understandable"notes Deloitte In Extenso.
While the negative effects of the Paris and Nice attacks on international customers have subsidedFrench tourism reached 89 million visitors in 2017, an increase of 6% compared to 2016. "The hotel industry is benefiting fully from the attractiveness of the destination and can also capitalise on the benefits of the economic recovery."Philippe Gauguier, Partner in Tourism, Culture and Hospitality at In Extenso.
Still driving business, hotels in the regions saw their accommodation sales rise by 2.2% compared with 2016. While visitor numbers are healthyThe average price in the Economy to Upscale categories fell slightly - by less than 1% - partly due to the European Football Cup in 2016, which boosted average prices. Lille, Lyon and Marseille were particularly hard hit. Conversely, Bordeaux and Nantes recorded growth in their results, as did the Nice hotel industry, which recovered from a difficult 2016 by capitalising on the complementary nature of these leisure and business customer segments.
Long the driving force behind the entire sector, the Paris hotel industry is also back on track after a sharp fall in results in 2016. Buoyed by business tourism on the one hand, and by the return of many foreign customers on the other, led by Americans, Chinese, Germans and Spaniards, RevPAR rose by 9.2 %. The luxury hotel sector, which suffered the most last year, was able to benefit from a more sustained level of visitor numbers, even if its recovery remained sluggish due to strong growth in supply. On a positive note, its average price began to recover at the end of the year, pointing to a good performance this year.
Deloitte In Extenso forecasts that the rebound seen last year will continue in 2018 and expects hotel sales to grow by between 2.5 % and 4 %. In detail, RevPar in the luxury category is expected to grow by between 3 % and 4.5 %, and in the top-of-the-range category by between 3.5 % and 5 %. Because of its strong regional presence, the mid-range segment should also continue to enjoy strong growth, between 2.5 % and 3.5 %. Similarly, the budget hotel segment is expected to post positive growth of between 3.5 % and 4.5 %. Lastly, the entry level of the French hotel industry, the super-economy, which had suffered in recent years, is regaining strength with new openings and renovations (1.5 % and 2.5 %).
This positive dynamic is not confined to France, but is spreading throughout Europe. STR, a partner of Deloitte In Extenso, notes that the indicators are greenThe United Kingdom does not seem to be suffering from Brexit either. The United Kingdom does not seem to be suffering from Brexit either, taking advantage of the fall in the pound to attract a large number of foreign tourists. All in all, despite the terrorist attacks that hit many of the continent's cities hard and the emergence of strong competition from Airbnb, hotel occupancy in Europe was higher in 2017 than in 2008, the last record year in this respect. And STR predicts an even more productive 2018 for European hoteliers.
