To what do we owe the full growth of the French hotel industry?

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After a truly successful summer season, French hoteliers are finding a promising economic climate. This rebound is now felt everywhere and the future looks even brighter for the accommodation sector.

From crisis to boom

French hoteliers had many reasons to rejoice this summer. A feeling generally driven by the evolution of the occupancy rate, which was described as good or very good by three out of four French hoteliers, compared to only a little more than half in the previous barometer carried out this summer.

Anticipation of future growth has seen the most spectacular progress: it went from only 23% of hoteliers considering a positive or very positive future in the fall of 2022 to 49% of hoteliers confident in the summer. 2023, then 63% for the current fall wave.

3 out of 4 French hoteliers describe their occupancy rate as good or very good

For the first time since the inaugural fall 2022 barometer, more French hoteliers consider political decisions beneficial than those thinking the opposite.

65% of French hoteliers consider that offering a local experience will be one of the priorities for their business over the next six months.

Only 8% of hoteliers say they already use AI-based business applications.

Investment stability

With the return to normal activities, French hoteliers seem to have stabilized their rate of investment. Contrasting with the last two barometers where around a third of hoteliers were ready to invest more over the next six months, this time, they mainly prefer to maintain the current pace of investment. Thus, 76% of respondents indicated that they wanted to invest approximately the same amount and only 15% would consider investing more.

Less than one French hotelier in ten said they wanted to reduce their investments over the next six months; However, around one in four of them considered it during previous waves.

Challenges for hoteliers

The role of government is seen with less apprehension

48% of hoteliers believe that government policies are important for their business, compared to only 25% thinking the opposite. This assessment of the role of government has not changed much during the three waves of the barometer. On the other hand, perhaps due to the lesser presence of the pandemic and associated restrictions, the expected impact of government policies evolved favorably in this fall survey. For the first time, French hoteliers mainly believe that political decisions are beneficial for their business (investment in destination marketing, government aid programs, etc.)

EU-wide trends

Over the past six months, occupancy rates and average daily rates (ADR) have increased much more for hotels than for furnished tourist accommodation (15 and 8 percentage points maximum, respectively). Overall, we see a 10-point difference between hotels and short-term rentals in their optimism for the future. Hotels are winning from the resurgence of travel this year.

But within the hotel sector itself, the recovery is not uniform. For years, small independent accommodations in Europe have been losing ground to large chains.

Development opportunities in abundance

Hoteliers in France are increasingly emphasizing local experiences to stand out and improve their businesses, in response to the standardization of travel habits. 65% of them believe this is a key opportunity for the next six months, compared to just 36% previously.

They are also looking to attract more families (61%) and international travelers (64%) now that travel to France is on the rise, compared to 33% in an earlier survey. In terms of profitability, offering food and drinks on site is already a common strategy, appreciated by 2 out of 3 French hoteliers, believing that it improves their profitability.

Artificial intelligence

Artificial intelligence (AI) does not replace reception

Guest hospitality remains primarily focused on human interaction in the European accommodation sector. Survey reveals skepticism about artificial intelligence (AI). In France, only 8% of hoteliers use AI-based applications, and even fewer plan to do so in the next six months (14%, compared to 34% previously).

Finally, as hoteliers ride this wave of tourism recovery, they have access to a wide range of investment opportunities and a diverse set of technology solutions, with AI being just one of many tools digital available.

Overall, the accommodation sector appears to have fully recovered from the post-pandemic blues and the industry is getting back into rhythm

Catherine Mills Avatar