Provincial France Continues to Feel 'Le Squeeze'

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. August 12, 2013

The hotel industry in France, much like Britain, sees the provinces struggling in comparison with the capital. Unlike Britain, France has the Riviera, where the sun shines on the hotel industry as on the beaches.

Paris and the Riviera are, of course, destinations for international travelers, so it is in line with global economic patterns that their hotels should outperform the rest of the country. RevPar in Paris grew by a healthy 4-5% in 2012. All but 15% of hotel investment in France went just into Paris and the Riviera. France has a 'two-speed' hospitality market. Given that, it will come as little surprise that in the provinces, major operators have been shedding weaker properties, leading to a fall in branded hotel inventory.

Shorter Stays and More Holidays Abroad

The issue is not that fewer French are staying in hotels (3.3m on business, 12.5m for leisure), just that they are staying for fewer nights. In the case of business travelers this represents nationally a 5% fall in volume, from 56m adult rooms nights down to 53m (BDRC Continental France Hotel Guest Survey 2013). The fall is greater for domestic leisure nights, down to 42m room nights. Occupancy fell also - around 3% in luxury, upscale and midscale tiers, 1.6% in the budget and super-budget tiers. The short break domestic leisure market has held up - it is domestic long stays that are responsible for the decline. Why? Probably because more French are holidaying in hotels abroad - Spain and Italy for long breaks, with Britain the chief beneficiary of the short break habit. French leisure travelers effectively exported 39 million leisure nights to hotels beyond French borders, a sharp increase on previous years. This reflects in the plateau reached in the French domestic leisure market which after slowing growth in participation reaches a plateau this year of an estimated 12.5m adults.

Reflecting the realities of EU trade flows, Germany is the leading destination for all French business travelers (just) ahead of Britain and Spain, though well ahead amongst frequent business travelers.

French businesses have suffered along with the rest of Western Europe and consequently are reining in discretionary expenditure. Their staff are less likely to stay overnight at conferences, reflected in a significant fall of an estimated 16% from 5m to 4.2m conference and event nights in the hotel where the event is hosted.

Hotel Brands

In the brand performance awards it is a clean sweep for Accor this year. Ibis is #1 Brand overall and is also top brand in leading choice (first or second preference) for leisure. Mid-market brand Mercure is #1 on leading choice for business while Accor's Ibis Budget, in its second year of tracking, is this year's Most Improved Brand. Hilton and Sofitel ranked as front runners among Upper Full Service brands and Relaix & Chateaux in the top of the range deluxe brands.

How do the French book their stays?

The online travel agency (OTA) market is at an earlier stage in its development in France than other major European markets. Compared with Germany, half as many French leisure travelers (23% vs 44%) cite OTAs as their usual reservation channel. Many French consumers still prefer to book direct with individual hotels. This is not to say that mobile technology and social media adoption are not proceeding in France as elsewhere; nearly one in three business travelers have used social media for hotel choice advice.

What do they want from their hotel?

As well as a great night's sleep, business travelers of course want free wifi ('weefee' as the French say it.). Leisure travelers overwhelmingly select good value as their top priority. Other attributes are important (location, relaxing rooms, in-room entertainment) but most French consumers will make trade offs to maximize value for money. Like consumers nearly everywhere in straitened economies!

This release uses findings from The 2013 France Hotel Guest Survey by BDRC Continental, which was conducted amongst 700 business travelers and 700 leisure travelers, representative of the hotel-staying French population. The fieldwork took place in March 2013. Equivalent surveys are conducted by BDRC Continental in 35 of the world's most significant hotel markets, across 5 continents.

About BDRC Continental:

BDRC Continental is an award-winning insight agency. We help our clients get closer to their customers by translating data into actionable business intelligence. We do this through our range of market-leading insight tools, a dedicated suite of advanced analytics and over two decades of experience working with leading service sector brands across the globe. Established in 1991, we have an rivaled reputation as a full service research consultancy with specialist expertise across a number of sectors including hotels, meetings & hospitality, financial services, media & advertising, Government & not for profit, culture & leisure, tourism, travel & transport and sports & sponsorship. As well as undertaking bespoke research for a wide variety of clients, we conduct a number of syndicated studies and have developed proprietary techniques including Tracktion, Grapevine, Service Intensity, the Business Opinion Omnibus, SME Finance Monitor and ZMET Visionary Thinking. www.bdrc-continental.com

Matthew Costin, is the Global Director (Hotels & Hospitality) of BDRC Continental, a market research consultancy specializing in the hotels and hospitality sector. In more than a decade at BDRC, Mr. Costin has worked with many of the world's leading hospitality companies, such as IHG, Hilton, Starwood and Marriott. He is an expert in the fields of brand equity and customer experience and is also a recognized authority on the meetings and conference sector. Mr. Costin joined BDRC in 2002, having started his insight career two years earlier with Abacus Research, where he worked mainly for clients in the financial services and media verticals. At BDRC, he assumed responsibility for the agency's work in the rapidly growing meetings and conference sector. In addition to overseeing the BDRC Meetings Market Survey programs, Mr. Costin launched VenueVerdict, a suite of hospitality customer experience management and competitor benchmarking applications that has now been adopted by hotel companies in more than 70 countries worldwide. In 2008, Mr. Costin was promoted to BDRC's senior management team and appointed to head up the company's global Hotels & Hospitality research practice, which operates out of BDRC's head office in London as well as regional offices in Singapore, Beijing and Sydney. Alongside his management responsibilities, he retains a hands-on role with custom hotel research and consultancy assignments, as well as BDRC's global Hotel Guest Survey and Meetings Market Survey program. Mr. Costin has a MA in International Relations from the University of Sussex and holds an MBA from Henley Business School. Mr. Costin can be contacted at +44 (0)20 7400 1004 or [email protected]