Despite protests, Paris hotels report positive year

Four weekends of anti-government violence along the Champs-Elysées cost Paris hoteliers an estimated €18 million ($20.43 million) in lost revenue as visitors canceled their bookings, according to research firm MKG.

Despite these losses, however, French hotels overall had a very good year, which Reuters credits to the return of foreign travelers to both Paris and the French Riviera.

The metrics were good across the board, the data show. French hotel occupancy rose by 1 percentage point to 68.2 percent during the year while rates rose by nearly 5 percent. Revenue per available room (RevPAR), meanwhile, grew 6.6 percent to exceed 60 euros for the first time, well ahead of the 5.8 percent PwC predicted for this year in early 2017.

In Paris, RevPAR rose 11 percent to €129.4 and would likely have matched €130—its 2014 level—without the protests. As it is, occupancy in Paris reached 79.7 percent.

The Road to Recovery

The 2018 occupancy is close to the record of 80 percent reached in 2014, before a wave of deadly attacks in 2015 and 2016 drove tourists away. The country had 82.6 million international visitors in 2016—a decline of 2 percent from 2015—setting the stage for a long road to recovery. By second-quarter 2017, the numbers were up by 10.2 percent year-over-year and totaling 107.1 million nights. 

Paris-based AccorHotels blamed the terror attacks for a revenue decline in first-quarter 2016, but by the following year, Colliers International named Paris the leading hot spot for investors in Europe, with lower development costs than London, helping to sharpen interest. At 2017's International Hotel Investment Forum, Dirk Bakker, head of EMEA Hotels at Colliers International, predicted France's travel and hospitality sectors would rebound after the terrorism-driven downturn. 

Earlier this year, the forecast was looking better. Occupancy in France grew 6.2 percent to 59.6 percent year-over-year in February—its highest occupancy for the month since 2014—while ADR improved 8.6 percent to €105.08. RevPAR grew to 15.4 percent to €62.62. 

According to the ECM-MKG European Destinations Observatory report, Paris saw a 3.5-point increase in occupancy during the first nine months of the year as well as RevPAR growth of 11 percent. Other cities throughout the country also saw RevPAR increases, including Montpellier (up 5.6 percent), Cannes (up 7 percent) and Nice (up 9.5 percent). Nice's increase is particularly important, the report noted, since that was the site of the 2016 attack that left 86 people dead and 458 wounded. At the time, AccorHotels CFO Jean-Jacques Morin said that sales in Nice dropped 10 percent in the weeks after the attack.

Tourism accounts for more than 7 percent of France’s gross domestic product, according to Reuters, and France hopes to attract 100 million foreign tourists by 2020.