As Upscale Hotel Rates Drop, Lower-Tier Revenue Climbs In France

Upscale properties in France saw steep revenue declines in the first half of 2009, while lower-tier properties are faring better, according to a report released this week by Deloitte.

Revenue per available room for four-star properties dropped by 19.2 percent year-over-year in France, and the average daily rate dropped by 8.7 percent, according to the report. Three-star properties had RevPAR drop by 9.9 percent and rates down 1.6 percent. Rates at two-star properties actually increased by 4.5 percent for the period, but RevPAR was still down by 2.6 percent. Budget hotels, meanwhile, were able to grow their RevPAR, the report indicated.

Upscale hotels in Paris and the Riviera have taken the hardest hit, according to the report. "These international destinations suffer from the decrease of foreign visitors, particularly in Paris, where the two dominant markets are the U.K. and the U.S," Deloitte said in the report. "Moreover, Paris and the Riviera have an extensive hotel supply, which makes them more sensitive to the ups and downs of the market."

The only city to see RevPAR increase during the period was Bordeaux, where RevPAR increased by up to 33 percent, according to Deloitte. The biennial Vinexpo trade show boosted performance there, allowing Bordeaux hotels to raise their rates.