After a tentative recovery in April, business was hampered by a calendar particularly unfavorable to business travelers. The numerous long weekends reduced demand, and this decline was not offset by a still hesitant leisure clientele.

According to the Deloitte-In Extenso barometer, April showed a slight improvement in performance, with hotel occupancy increasing for the first time in many months. The rise was modest but significant enough across the country to raise some hopes of recovery, although May was shaping up to be a challenging month. And indeed, it ended with a sharp decline in performance across almost the entire French hotel market. A few destinations and categories fared better than others – Marseille hotels posted increases in accommodation revenue across nearly all categories – but this was an exception.

French cities remain business destinations

It was primarily occupancy rates that penalized hoteliers. Hotel occupancy is down compared to last year. Depending on the destination, the decline in occupancy was partially offset by an increase in average prices, but where this wasn't possible, the consequences for revenue were significant.

The culprit was a calendar that penalized business travel. Unlike last year, when almost all public holidays fell on a Wednesday, this year May had three public holidays on Thursdays. A boon for employees wanting a long weekend, but a disaster for hoteliers. Business travelers were scarce and were not compensated by leisure travelers. In a difficult economic climate, the latter stayed away. With very few exceptions, French cities remain primarily business destinations.

It remains to be seen whether this is just a temporary pause in a fundamental phenomenon and whether a possible recovery will not be penalized by social phenomena (SNCF strike, intermittent workers' movement, etc.) with an impact on hotel activity.

With kind permission of the Journal de l'Hôtellerie