The hotel market - France (2024)

1.2 Global market

The global hospitality market is expected to grow from $***.** billion in **** to $**** billion by ****, at a CAGR of *.**%, according to Indian market research specialist Exactitude Consultancy. The firm believes that the market should be driven by rising GDP in most countries, increased consumer travel spending, reasonably priced air tickets and an increase in the number of business travellers.

evolution of the global hotel market between **** and **** (***)

Over the past five years, spending on business and leisure travel has increased every year. The hotel industry has benefited from this influx of travellers, reaching a peak in annual growth before suffering a downturn due to the Covid-** pandemic. In the years that followed, the hotel sector returned to growth as the travel industry recovered from the health crisis. Since January ****, with the gradual recovery of hotel operations, Europe has recorded the highest monthly occupancy rates, notably reaching **% in September ****.

Monthly hotel occupancy rates by region worldwide from January **** to December ****

Global hotel players

In terms of number of rooms, Marriott International is in first place, followed by Jin Jiang and Hilton Worldwide [***]. The ranking shows the varied growth of the groups, with strong expansion in Asia and diversified strategies including partnerships, renovations and ...

1.3 French market

Hotels are included in themarket supply of tourist accommodation in France , representing almost **.*% of this supply in ****.

Breakdown of commercial tourist accommodations France, ****, in Source: ****

France is one of the world's leading tourist powers and therefore has a substantial supply in terms of hotels with almost ***** hotels in France, a figure that has been steadily declining since ****.

Number of tourist hotels in France France, ****, in thousands of hotels Source: INSEE However, while the number of hotels is declining, the number of hotel accommodations is steadily increasing, demonstrating the capacity of hotels to become larger and larger, and to offer more and more beds to their clientele.

Total accommodation capacity of tourist hotels in France France, ****, in thousands of hotel rooms Source: ****

These infrastructures, which cover the entire country, meet strong demand from foreign and non-foreign tourists alike, particularly during the tourist season, with overnight stays regularly exceeding *** million every year. Despite the decline in Covid, hotel occupancy has been returning to previous levels since ****.

Hotel occupancy in France France, ****, in thousands of overnight stays Source: ****

Apart from years marked by a drop in sales due to the Covid-** crisis, the French hotel sector has enjoyed continuous growth for almost ten years. ...

2.1 Hotel occupancy in France: the capital is a strong magnet, especially for foreign guests

Hotel customers in France can be divided into different categories: foreign tourists and French residents on vacation or business.

Breakdown of hotel occupancy by customer origin France, ****-****, in % of overnight stays Source: ****

Foreign non-resident segment

Let's analyze the segment of foreign tourists coming to France. We note that this figure was rising steadily until ****. By ****, this number will have risen again following the recovery of tourism after the Covid episode.

Foreign tourist arrivals in France France, ****-****, in million arrivals Source: ****

The arrival of foreign tourists in France is subject to a number of uncertainties and disruptive exogenous factors, such as exchange rate trends, political instability, health conditions, etc. For example, in ****, there was a small drop in tourists to France, a consequence of the feeling of insecurity caused by the **** attacks in France.

The arrival of foreign tourists in France undeniably generates a substantial source of revenue, particularly for service professions such as the hotel industry. Border countries and the UK are the most represented among tourists. There is also a strong presence of Americans, who alone account for **% of tourists to France.

International tourism revenues in France, by main outbound markets France, ****, in

We also note that certain ...

2.2 French tourism expectations are changing

Today, we are witnessing a rise in environmental considerations in tourism, which can be explained by various factors such as :

Greater awareness of environmental issues A growing awareness of the effects of mass tourism on the environment The growing influence of a new generation that is much more sensitive to environmental concerns The emergence of a sustainable travel offer .

This growing awareness of the need formore responsible vacations is reflected in the survey below.

Today, would you say that you have adopted more ecologically responsible vacations than before? France, ****, in Source: ****

We are thus witnessing an emerging awareness of sustainable tourism.

In ten years' time, do you think you'll be taking more ecologically responsible vacations? France, ****, in Source: ****

An Ifop survey carried out in June **** among a sample of *,*** people, representative of the French population aged ** and over, highlighted the changes and divergences in the way people think about the environment.of expectations and perceptions of tourism in France, highlighting the growing importance of environmental and economic concerns

The "green" push in vacation habits

The French are showing a growing trend towards more environmentally-friendly vacation practices. While the majority continue to prefer outdoor vacations, particularly by the sea (***).

**% of French ...

2.3 Hotel selection criteria

Customer consumption habits

According to the graph below, we can see the main criteria used by the French when choosing a hotel.

When choosing a hotel, location is the main criterion, whether for business or leisure travelers, according to a survey realized in **** by Coach Omnium among *** French and European hotel guests who have made at least one hotel stay per year. The former prefer establishments close to their appointments or in the city center, while the latter can accept hotels located a few kilometers from their main destination.

Price is the second most important criterion, now surpassing the number of stars the hotel has. Indeed, **% of customers consider cost to be a crucial factor, up from **% in ****, with guests looking for a rate that matches their budget rather than the cheapest.

E-reputation also plays a growing role in the decision, with **% of customers consulting online reviews, compared with **% in ****. A poor online reputation can thus deter bookings, even if the hotel meets the other criteria.

Finally, personal recommendations and travel guides have a moderate influence on selection (***), while quality or environmental labels have little impact, often due to their lack of notoriety and promotion.

Top criteria when choosing a hotel France, ...

3.1 Macroeconomic structure of the sector

Data provided by Urssaf based on NAF code **.**Z illustrate the evolution of the number of establishments in the hotel sector in France between **** and ****. Notable observations include: Overall, the number of hotel establishments has shown a certain stability over the period from **** to ****. Fluctuations are present but concentrated over a short period, varying between a maximum of **,*** establishments in **** and a minimum of **,*** in ****. The year ****, marked by the Covid-** pandemic, saw a notable drop in the number of establishments, reaching the lowest figure for the period at **,***. This decline can be attributed to economic difficulties and temporary or permanent closures caused by health restrictions and the drop in tourism. In ****, a slight recovery was observed, with the number of establishments rising to **,***, demonstrating a certain resilience and an attempt to return the hotel sector to normal. However, this recovery proved insufficient to return to pre-pandemic levels. Subsequently, the number of establishments stabilized at around **,*** in **** and ****, with a slight drop recorded in ****. This trend could indicate a consolidation phase as the sector seeks to adapt to new economic realities and changes in post-pandemic travel habits.

Number of hotel establishments France, ****-****, in units Source: ****

In terms of headcount: In ...

3.2 The main players in France

Different types of players

The French hotel industry is made up oftwo main types of player:

Independent hotels make up a large part of the market, with a diversity of sizes, styles and services, from small family-run inns to boutique hotels. Their strength often lies in their authenticity and local roots. Hotel chains: they offer uniform services in their establishments, whatever the destination. Thanks to their structure, they benefit from greater investment capacity, greater visibility on a global scale and greater power.thanks to their structure, they benefit from greater investment capacity, greater visibility on a global scale, and considerable marketing power, notably through loyalty programs and a presence on reservation platforms.

In France, there has been an acceleration in hotel chain accommodation capacity in recent years.

Lodging capacity by operator profile France, ****-****, in Source: ****

This dynamic can also be seen in the evolution of hotel occupancy rates in France between chain hotels and independent hotels.

Hotel occupancy in France by establishment profile France, ****-****, in Source: ****

Focus on hotel chain structures

We can identify different types of hotel chain contracts:

Franchises: operated by independent entrepreneurs who pay an annual fee to display the chain's brand. Management mandate: associates a ...

3.3 Loads

Let's take a look at the main costs involved in the hotel business.

Below, we can see a sharp rise in the price of energy, i.e. gas and electricity, due in particular to the war in Ukraine and the geopolitical and inflationary context.

energy

Evolution of energy prices sold to French companies France, ****-****, in Source: ****

Furthermore, personnel costs are the second largest expense in the hotel industry. We are seeing an increase in the hourly minimum wage (***), in particular, as a result of higher salaries.

Changes in SMIC per hour France, *****-****, in Source: ****

Weight of personnel costs in the hotel industry France, ****-****, in % Source: ****

4.1 Offer typology

France's hotel offer is highly diverse, meeting the varied needs of tourists and business travelers.

This typology can be segmented into several categories based on the number of rooms offered, comfort and hotel range (***).

Hotels can be classified according to the number of rooms, which often reflects the size of the establishment, its organization, and sometimes even its market positioning, as shown in the graph below.

Breakdown of classified hotels by number of rooms France, ?, in number of hotels Source: ****

The typology of hotels in France is also classified according to the star rating system, which indicates the level of comfort, services and facilities on offer:

*-star hotels: basic services, often located in rural areas, low budget. *-star hotels: affordable price range, more comfort, often families and travelers. *-star hotels: well-equipped, comfortable, extra services, tourists or business travelers looking for good value for money. *-star hotels: top-of-the-range segment, spacious rooms, quality amenities, full service with wellness facilities. *-star hotels: luxury establishments, with an exceptional level of service and comfort. The aim is to provide a unique experience.

Distribution of hotels by star rating France, ****, in number Source: INSEE, URSSAF We can also analyze occupancy rates by hotel category.

Average occupancy ...

4.2. Hotel pricing

Consumer prices in the hotel industry

The rise in consumer prices in the hotel sector is the result of a number of economic factors, including rising inflation in France, the resurgence of tourism following the pandemic, and the seasonal nature of the sector.

Consumer prices in the hotel industry France, ****-****, in Source: ****

Average revenue per room let (***)

Let's take a look at average revenue per room (***) has surged since **** and continues to accelerate. This growth can be explained by various factors, such as price increases since ****, and the rise in the average customer basket. This rise in the average basket can be explained by the increase in rates for all the hotel's ancillary external services, as well as investment efforts on the part of hotels.

Average revenue per room (***) France, ****-****, in euros Source: ****

It is also worth noting that the increase in average revenue has been particularly marked in the luxury sector. This difference can be explained by the fact that more luxury hotels have carried out major works in their establishments, building wellness areas for example, which has enabled them to raise prices much more than their competitors.

Change in average revenue for hotels opening in **** compared with ...

4.3

Moving upmarket

Upmarket hotels are a key trend in the hospitality industry, responding to changing consumer expectations and growing competition. We're seeing anincrease in the quality of services, improved infrastructures and afocus on the customer experience.

Hotels are investing in tailor-made experiences to meet their customers' expectations and deliver a memorable stay with the aim of building loyalty.

In recent years, the number of *- and *-star hotels has exploded .

Growth in the number of *- and *-star hotels France, ****-****, in number of hotels Source: ****

Room personalization - AI

Thanks to AI, hotels can now offer a tailor-made experience to each guest, responding to their specific preferences and needs.

AI makes it possible to collect and analyze data on guests' habits, such as preferences for temperature, lighting, or bedding. By integrating this information into the hotel management system, it becomes possible to create suitable environments even before guests arrive. For example, a room can be pre-heated or air-conditioned according to the visitor's tastes, and mood lighting can be set to create a relaxing or energizing atmosphere.

Setting up additional services

The introduction of additional services has become a key strategy for hotels wishing to enrich the customer experience and stand ...

5.1 Hotel classification

French regulations governing the hotel industry are mainly codified in the Tourism Code. It defines the roles and responsibilities of professionals in ensuring customer protection and safety, and can be accessed at Legifrance.gouv.fr.

Hotels are classified into categories (***)according to their equipment, comfort and services. This classification, although optional, is indicated by red signs when present.

Only classified hotels can be designated as "Hôtels de tourisme". A tourist hotel is a classified commercial establishment offering furnished rooms or apartments for rent to a visiting clientele for daily, weekly or monthly stays, without taking up permanent residence. It may include a catering service and operate all year round or only during certain seasons, in which case it is classified as a "seasonal hotel" if it is open for no more than nine months a year (***). The classification of a tourist hotel is valid for five years.

The regulations also include a "Palace" distinction to recognize hotels with exceptional features, notably in terms of geographical location, historical, aesthetic or heritage interest, as well as the services offered[***].

5.2 Pricing

Hotel prices are free and may vary between establishments of the same category.

Beverage and food prices must be displayed in the dining room or bar. Telephone rates must also be communicated to customers.

Hoteliers must display certain prices at reception and outside the hotel, including [***] :

The price for a night in a double room, which must reflect the rate actually charged for the coming night if booked at reception. The hotelier can also indicate the maximum price for one night in a double room for a period including the next night.

Information on the services offered, such as breakfast availability, Internet access from the room, and whether these services are included in the price of accommodation.

How to access information on the prices of other services on offer.

Tourist tax obligations [***] :

Tourist tax or flat-rate tourist tax may be instituted by communes and their groupings.

The operator must pay the amount of this tax to the local authority.

Price advertising[***]:

The price of a service must be displayed inclusive of all taxes, include the cost of any services essential to the reservation, and indicate the date or period of validity (***).

please note: if a discount is applied for the use ...

5.3 Safety rules for establishments open to the public (ERP)

Hotel owners must comply with ERP safety regulations[***].

ERP are designed to enable the following actions[***]:

rapid and orderly evacuation of all persons, or their sheltering if necessary

Intervention of emergency services

Limit the spread of the fire by using appropriate materials and equipment

For the application of safety regulations, an ERP is classified both by type, according to its activity, and by category, according to its capacity.

Technical rules apply in particular to the following points:

Layout and isolation of premises

Façade (***) bordering a road or open space, to allow evacuation of the public and access by firefighters

Fire-resistant construction and interior materials

Interior layout and compartmentation to limit the spread of fire and smoke

Number and width of exits, safe waiting areas and interior clearances (***)

Smoke extraction

Alarm and warning systems, surveillance service and fire-fighting resources appropriate to risks

No storage, distribution or use of explosive or toxic products or particularly flammable liquids (***)

electrical lighting compulsory

mandatory emergency lighting

Guarantee of safety and proper operation of elevators, electricity, gas, heating and ventilation systems

6.1

The **** ranking of hotel groups in France[***] reflects the market dynamics and varied strategies of the leading players, highlighting differentiated growth and modernization initiatives to meet the challenges of the sector.of the market's leading players, highlighting differentiated growth and modernization initiatives to meet the sector's challenges.

Overall ranking :

Accor maintains its leading position despite a slight *.*% decrease in rooms.

Jin Jiang recorded a *.*% decline, mainly due to hotel closures.

B&B Hotels posted the strongest growth (***), thanks to significant conversions and openings.

Notable performances:

Marriott International recorded a **.*% increase in rooms.

BWH Hotels (***) suffered a slight erosion of *.*%.

Brit Hotel recorded growth of *.*%, boosted by acquisitions.

Hilton Worldwide reported robust growth of **.*%, due in part to flexible partnerships to meet local needs.

• Accor Hotels
• Intercontinental Hotels Group
• Louvre Hôtels Groupe
• B&B Hotels
• Hotels Balladins
• Best Western France
• Fast Hotel
• Booking.com
• Egencia France
• Amadeus
• Cepton - Vintura International
• Ibis hotel (Accor groupe)
• Radisson Hotels
• Marriott
• Logis Hotel
• Relais & Chateau
• The Originals Hotels
• Adagio Aparthotel
• Mercure (Accor groupe)
• Novotel (Accor Groupe)
• Campanile (Louvre Groupe)
• Kyriad (Louvre Groupe)
• Sofitel (Accor)
• Passman
• Appart’City
• Mama Shelter
• Feelingo