Events and trade shows are back in Paris and the regions, even if sometimes in a scaled-down or hybrid format. Business clients are gradually returning, but KPMG France predicts a real recovery won't happen until March 2022.
€1,9 billion: that's the amount of economic benefits lost in Paris and the Île-de-France region in the first half of 2021 alone, due to a sharp decline in business tourism. This is one of the main findings of a study recently published by the Île-de-France Chamber of Commerce and Industry. This significant loss is attributable, among other things, to the cancellation of 154 in-person trade shows, the shift of 67 events to digital formats, and the cancellation of 39,300 companies' trips to the capital.
What about this fall? Some are talking about the beginning of an improvement, with trade shows still going ahead, such as Maison&Objet in Villepinte (Seine-Saint-Denis) or MIPIM in Cannes (Alpes-Maritimes). However, the aisles of the former were not full, with 48,641 visitors over five days, representing a 36,7% drop in attendance. As for the latter, it lasted 48 hours instead of the usual four days. So, the recovery is underway, but slowly.Business tourism is starting to pick up again, but the real recovery will not occur until March 2022, provided the health situation at the European level is resolved. This is because, in France, 78% of foreign visitors are European., comments Stéphane Botz, National Hospitality Director at KPMG France.
Impact on the hotel industry: “By March 2022, the domestic, and even European, market will supply budget and mid-range hotels. Long-haul travelers will return with the resumption of major international events. We could therefore see a recovery, and even a peak in activity, between March and June 2022, as business travelers will want to meet and reconnect, and to work together.."
“Between 5 and 15% of the domestic market customer base will be lost”
At Logis Hotels, optimism reigns. After a summer marked by a 32% increase in revenue, the group is embarking on the off-season by riding this momentum, while also attracting business travelers, primarily domestic for the time being. And with good reason: while many establishments were closed in 2020, Logis Hotels remained open, offering in-room dining. This approach appealed to business travelers, who were then looking for accommodations in regional areas, and has since fostered their loyalty.
"However, Stéphane Botz adds, Between 5 and 15% of the domestic market clientele will be lost in the context of local business tourism, with the increasing use of teleworking and other remote meetings, which will become the norm." Added to this is the development of events and trade fairs which adopt a hybrid format, known as 'phygital', like Maison&Objet, which, admittedly, brought together more than 1,400 exhibitors at the beginning of September in Villepinte, but also created the Maison&Objet Academy, a streaming channel which offers, on subscription, interventions by international experts.
Adapting to a more local market
“This quest to optimize working time will have an impact on budget and mid-range hotels, says the national Hospitality director at KPMG France. It is assumed that it will represent 5 to 15% of the number of overnight stays booked by business clients.In such a context, the hotel industry must adapt:Hoteliers will have to respond to a more local need: light meals, business meetings… The revenue lost on one side can therefore be partially regained on the other.” continues Stéphane Botz.
As for business tourism“It will gradually return and adapt to new ways of consuming, both in accommodation and in common areas,” he concluded. According to the consultant, “We need to adapt establishments and pay close attention to the commercial potential of ground-floor spaces in buildings.”".
Published with the kind permission of the Journal de l'Hôtellerie