One year after the Bastille Day attacks on Nice, when a terrorist driving a truck into a crowd killed 86 people, the French Riviera is back in favor as hotel performance recovers and the transactions market shows indications of following suit.
Bouncing Back
According to STR, within four days of the July 14 attack, Nice’s daily occupancy had dropped from 94.6 percent to 72.8 percent. Within a month of the assault, AccorHotels was blaming terrorist attacks in Europe—and France in particular—for a decline in profits over the first half of 2016. AccorHotels CFO Jean-Jacques Morin said that sales in Nice had dropped 10 percent within two weeks. “The next three months are vital for the company as we make 35 to 40 percent of our profits in July, August and September,” he said.
Since then the region has been bouncing back, and by September Deloitte reported that, on the Côte d’Azur, business appeared to be slowly getting back to normal, “with the return of business visitors who are boosting mid-week occupancy, even if weekend trading is still quieter.”
Given this, the luxury segment benefited from several events, notably the Monaco Yacht Show and the Cannes Yachting Festival,” the consultancy added. “The presence of business guests can go some way towards making up for the lack of leisure visitors.”
As summer comes around again, so do the leisure guests. “April was exceptional in the south of France, although May saw a fall in French domestic demand,” Carine Bonnejean, head of consultancy – hotels, Christie & Co., told HOTEL MANAGEMENT. “However, in terms of international visitation the situation is better, which resonates with the demand for the south of Europe.
“If you look at the 30 markets which are important, only eight have seen a fall—one of them being the UK for obvious [Brexit] reasons—and of the others some have seen double-digit demand, with the return of Russia and the CES countries. It seems to be good news and I cannot see why it wouldn’t continue to improve into the summer.
“We’ve been looking at a number of assets, but there hasn’t been too much stock coming onto the market, they want to be sure of the recovery, they are being cautious. They don’t want to sell at a discount.”
Interested Brands
Global brands are paying attention to the region. For example, Hilton has recently added the Grand Hotel Des Sablettes Plage to its Curio Collection, making it the first Curio Collection by Hilton hotel in the Cote d'Azur.
The 75-guestroom Grand Hotel Des Sablettes Plage is in the coastal city of La Seyne sur Mer, west along the coast from Nice.
At the same time, Design Hotels has added Hotel Les Roches Rouges, in Saint-Raphael, on the Provence coast between St. Tropez and Cannes, described as “an authentic French Riviera experience straight out of the late 1950s.”
That description seems apt: As the region’s hotels look back to they heyday of glamour, guests are also returning and looking for a taste of escapism.
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.