Observatoire 2022 des Palaces

Commercial and operating indicators of French Palaces in 2022
As of 31 July 2023, the Atout France Palace distinction applied to 31 hotels, representing a stock of 3 145 rooms spread across the French Riviera, Paris, the Alps, the South-West, Provence and the Caribbean.

The figures presented are based on the analysis of data collected from a sample of nearly 2 100 rooms, or more than 65% of the Palace-certified stock in 2022. A sub-segmentation by market, based on geographical criteria, was carried out in compliance with statistical confidentiality:

- the Paris panel represents more than 65% of capacity in number of rooms, or approximately 1 200 rooms and suites;

- the Riviera panel accounts for nearly 60% of capacity in number of rooms, or approximately 300 rooms and suites (220 days open in 2022 on average); - the Courchevel panel accounts for more than 75% of capacity in number of rooms, or more than 160 rooms and suites (approximately 115 days open in 2022 on average) - all mountain Palaces being located in Courchevel; - the Other regions panel, which does not include hotels located on the Riviera and in Courchevel, consists of approximately 450 rooms and suites (275 days open in 2022 on average).

?In Saint-Tropez, clienteles are changing, with a surge in South American guests, notably from Brazil and Mexico.?

Christophe Chauvin General Manager & Director of Development, Byblos Saint-Tropez.

2022: RevPAR higher than in 2019 despite occupancy rates that remained down
The overall occupancy rate of French Palaces, all regions combined, increased by 17,9 points between 2021 and 2022, reaching 57%. However, this level remains 3,2 points below that of 2019 (60,2%). This trend varies across regions.

- In Paris, Palace occupancy rates increased by 22,6 points on average between 2021 and 2022, ranging between 50% and 60% for a majority of the hotels in the panel. However, this average level remains 4 points below that of 2019.

In 2022, attendance at Parisian Palaces was driven by the return of international long-haul clienteles, notably from the United States and the Middle East (accounting for nearly 50% of total overnight stays, a level comparable to 2019).

- On the Riviera, the Palace occupancy rate increased by nearly 12 points on average between 2021 and 2022, with a longer average opening period than in 2021 (220 days) and comparable to that of 2019. This attendance level is also nearly 5 points higher than that of 2019.

Guests from the United States, whose overnight stays increased by nearly 25%, accounted for nearly 45% of foreign overnight stays recorded in the panel in 2022, followed by European guests, who represented nearly 30% of foreign overnight stays, a level comparable to 2019.

However, the situation varies across the region. While hotels located in Saint-Tropez continue to benefit from their historic clienteles (European and domestic), which can account for up to 60% of their total overnight stays, new markets are developing.

- After two seasons severely affected by the health crisis, the average occupancy rate of Palaces located in Courchevel grew by more than 5 points compared to 2019, with an average opening period (115 days) 5 days longer than that of 2019. In 2022, attendance was driven by foreign guests, who represented nearly 90% of the panel's total overnight stays, with guests from the Middle East in particular contributing more than 20% of foreign overnight stays, followed by guests from the United Kingdom (14%) and the United States (13%). Following the outbreak of the war in Ukraine, attendance by Russian guests was down compared to 2019 (depending on the hotel, they could represent up to 25% of foreign overnight stays, compared with 12% on average in 2022).

- The occupancy rate of Palaces in the Other regions panel fell by 6 points on average between 2021 and 2022. This level is also 2 points below that of 2019. In 2020 and 2021, hotels in the Other regions panel had benefited from a strong domestic clientele, representing more than 65% of total overnight stays on average in 2021. In 2022, although the domestic clientele remained significant (47% of total overnight stays), its overnight stays were down compared to 2021. The decline was partially offset by a gradual return of guests from the United States, who represented 21% of foreign overnight stays in 2022 versus 11% in 2019 (an increase of approximately 20% in overnight stays by this clientele).

The average price, all regions combined, increased by more than 30% between 2021 and 2022, reaching 1 442? excl. VAT. In 2022, the average price of Palaces thus exceeds the level reached in 2019 (+35,9%), with some hotels posting average prices more than 60% higher than those of 2019.

- In Paris, all hotels in the panel show increases in average prices between 2021 and 2022, with an overall rise of 34% bringing the average price to 1 465? excl. VAT. The average price of Parisian Palaces has thus risen to a level 41% higher than the average price of 2019. It should be noted, however, that average prices of Parisian Palaces vary widely from one hotel to another (a gap of approximately 850 ? excl. VAT between the minimum and maximum observed).

- On the Riviera, the average price reaches 1 932? excl. VAT, an increase of approximately 7% between 2021 and 2022, although this varies by hotel. All hotels also show growth in their average price compared to 2019 (25% on average).

- In Courchevel, the average price reaches 2 848? excl. VAT in 2022, a level up +6% on average compared to 2019.

- The average price of Palaces in the Other regions panel reaches 668? excl. VAT, an increase of approximately 15% between 2021 and 2022, although this varies by hotel. All hotels also show growth in their average prices compared to 2019 (19% on average).

?The summer season looks set to be better than last year, in terms of attendance, but also in terms of average price, which should be higher than that of 2022.?

Vincent Poulingue Director, l'hôtel du Palais Biarritz - The Unbound Collection by Hyatt.

2023: performance supported by the confirmed return of international long-haul clienteles despite continued price increases.
For French Palaces, 2023 looks set to be another dynamic year, with growth prospects compared to 2022, despite the social unrest in the first half of the year that affected Parisian Palaces and hotels dependent on an international clientele.

Despite these favorable dynamics, costs related to raw materials and energy continue to rise in the sector, forcing hoteliers to pass these increases on to rates, for both accommodation and food service, which presents risks for customer satisfaction.

Although Palace guests generally have high purchasing power, value for money remains one of the fundamentals of customer loyalty, particularly for some large-capacity hotels and those that depend more heavily on domestic and business clienteles.

This context of widespread inflation is encouraging most hoteliers to improve their energy efficiency, for both economic and environmental reasons.

?While Paris remains an attractive and dynamic destination, it is important to monitor the current context of rising prices, as some guests could be drawn to more affordable destinations.?

Jean-Claude Wietzel Regional Vice President and General Manager, Four Seasons Hotel George V, Paris.

We estimate that the revenue generated by French Palaces grew by approximately 15% in 2022 compared to 2019. Palaces on the Riviera show the highest revenue growth: +28% between 2019 and 2022. EBITDA reached 29,5% of the total revenue of French Palaces in 2022, i.e. +5 points compared to 2019, reflecting good cost management by hotels despite complex operating conditions (rising costs). The increase in EBITDA is estimated at approximately +7% on average compared to the 2019 value.

Information taken from the study ?L'industrie Hôtelière Française en 2023? carried out by KPMG SA