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Tough Times of French Hotel Industry

News It cannot be told clearly, if January’s sad events had their negative impact on Paris tourist industry or maybe economic conditions made French guests visit Paris less, but after quite promising start of the year hotels in Paris posted poor results in February. Regional France had similar results for the month.

After terrorist attacks in Paris in January, hotels in the City of Light find it hard to recover their positions. In February, there was a definite drop in occupancy in all segments. Even though some segments (midscale and luxury segments) managed to compensate that loss of occupancy by higher room rates, most hotels posted flat or negative results. There is one more opinion on poor results of February. Traditionally, that is a month when French clients visit Paris, particularly during the holidays. This year, fewer domestic customers visited Parisian hotels due to effects of recession.

Hotels in regional France mostly posted similar results. Hotels in the Cote d’Azur and some other cities like Bordeaux, Toulouse, Lille, and Lion posted improving results compared to the same period of last year, continuing, therefore, the positive trend of January. At the same time, many other cities like Marseille or Strasburg posted significantly lower results.

While upscale hotels in France mostly post declining results, budget hotels were the only sector with progressing RevPAR. 2014 was a tough year for budget and super budget hotels due to rise in VAT. The start of 2015 brought slightly better results for the industry, but it’s yet not clear what effects of the increased VAT will be.


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